diff --git a/README.md b/README.md
index 5110daa3..6e18b504 100644
--- a/README.md
+++ b/README.md
@@ -39,7 +39,7 @@ REST Client allows you to send HTTP request and view the response in Visual Stud
       + `{{$datetime rfc1123|iso8601 [offset option]}}`
       + `{{$localDatetime rfc1123|iso8601 [offset option]}}`
       + `{{$processEnv [%]envVarName}}`
-      + `{{$dotenv [%]variableName}}`
+      + `{{$dotenv [%]variableName [filename]}}`
       + `{{$aadToken [new] [public|cn|de|us|ppe] [<domain|tenantId>] [aud:<domain|tenantId>]}}`
       + `{{$oidcAccessToken  [new]  [<clientId:<clientId>] [<callbackPort:<callbackPort>] [authorizeEndpoint:<authorizeEndpoint}] [tokenEndpoint:<tokenEndpoint}] [scopes:<scopes}] [audience:<audience}]}`
     - Easily create/update/delete environments and environment variables in setting file
@@ -659,7 +659,7 @@ For example: Define a shell environment variable in `.bashrc` or similar on wind
 
   `%`: Optional. If specified, treats envVarName as an extension setting environment variable, and uses the value of that for the lookup.
 
-* `{{$dotenv [%]variableName}}`: Returns the environment value stored in the [`.env`](https://github.com/motdotla/dotenv) file which exists in the same directory of your `.http` file.
+* `{{$dotenv [%]variableName [filename]}}`: Returns the environment value stored in the file starts with [`.env`](https://github.com/motdotla/dotenv) which exists in the same (or direct parent) directory of your `.http` file. If no file specified, default filename is `.env`.
 * `{{$randomInt min max}}`: Returns a random integer between min (included) and max (excluded)
 * `{{$timestamp [offset option]}}`: Add UTC timestamp of now. You can even specify any date time based on current time in the format `{{$timestamp number option}}`, e.g., to represent 3 hours ago, simply `{{$timestamp -3 h}}`; to represent the day after tomorrow, simply `{{$timestamp 2 d}}`.
 * `{{$datetime rfc1123|iso8601|"custom format"|'custom format' [offset option]}}`: Add a datetime string in either _ISO8601_, _RFC1123_ or a custom display format. You can even specify a date time relative to the current date similar to `timestamp` like: `{{$datetime iso8601 1 y}}` to represent a year later in _ISO8601_ format. If specifying a custom format, wrap it in single or double quotes like: `{{$datetime "DD-MM-YYYY" 1 y}}`. The date is formatted using Day.js, read [here](https://day.js.org/docs/en/get-set/get#list-of-all-available-units) for information on format strings.
@@ -685,7 +685,7 @@ Content-Type: application/xml
 Date: {{$datetime rfc1123}}
 
 {
-    "user_name": "{{$dotenv USERNAME}}",
+    "user_name": "{{$dotenv USERNAME .env.local}}",
     "request_id": "{{$guid}}",
     "updated_at": "{{$timestamp}}",
     "created_at": "{{$timestamp -1 d}}",
diff --git a/src/models/httpVariableResolveResult.ts b/src/models/httpVariableResolveResult.ts
index 33a61c98..cbfa74df 100644
--- a/src/models/httpVariableResolveResult.ts
+++ b/src/models/httpVariableResolveResult.ts
@@ -27,14 +27,14 @@ export const enum ResolveWarningMessage {
     ResponseBodyNotExist = "Response body of given request doesn't exist",
     IncorrectDateTimeVariableFormat = 'Datetime system variable should follow format "{{$datetime rfc1123|iso8601 [integer y|M|w|d|h|m|s|ms]}}"',
     IncorrectLocalDateTimeVariableFormat = 'Local datetime system variable should follow format "{{$localDatetime rfc1123|iso8601 [integer y|M|w|d|h|m|s|ms]}}"',
-    DotenvFileNotFound = '.env file is not found in the directory where current .http file exists',
+    DotenvFileNotFound = '.env file or specified file which should start with ".env" is not found in the directory where current .http file exists',
     DotenvVariableNotFound = 'Given variable name is not found in .env file',
     IncorrectHeaderName = 'No value is resolved for given header name',
     IncorrectJSONPath = 'No value is resolved for given JSONPath',
     IncorrectRandomIntegerVariableFormat = 'RandomInt system variable should follow format "{{$randomInt minInteger maxInteger}}"',
     IncorrectProcessEnvVariableFormat = 'ProcessEnv system variable should follow format "{{$processEnv envVarName}}"',
     IncorrectTimestampVariableFormat = 'Timestamp system variable should follow format "{{$timestamp [integer y|M|w|d|h|m|s|ms]}}"',
-    IncorrectDotenvVariableFormat = 'Dotenv variable should follow format "{{$dotenv variableName}}"',
+    IncorrectDotenvVariableFormat = 'Dotenv variable should follow format "{{$dotenv variableName [filename]}}"',
     IncorrectXPath = 'No value is resolved for given XPath',
     UnsupportedBodyContentType = 'Only JSON and XML response/request body is supported to query the result',
     InvalidJSONPath = 'Invalid JSONPath query',
diff --git a/src/utils/httpVariableProviders/systemVariableProvider.ts b/src/utils/httpVariableProviders/systemVariableProvider.ts
index bfe380c9..04eb2a5e 100644
--- a/src/utils/httpVariableProviders/systemVariableProvider.ts
+++ b/src/utils/httpVariableProviders/systemVariableProvider.ts
@@ -34,7 +34,7 @@ export class SystemVariableProvider implements HttpVariableProvider {
     private readonly randomIntegerRegex: RegExp = new RegExp(`\\${Constants.RandomIntVariableName}\\s(\\-?\\d+)\\s(\\-?\\d+)`);
     private readonly processEnvRegex: RegExp = new RegExp(`\\${Constants.ProcessEnvVariableName}\\s(\\%)?(\\w+)`);
 
-    private readonly dotenvRegex: RegExp = new RegExp(`\\${Constants.DotenvVariableName}\\s(\\%)?([\\w-.]+)`);
+    private readonly dotenvRegex: RegExp = new RegExp(`\\${Constants.DotenvVariableName}\\s(\\%)?([\\w-.]+)(?:\\s(\\.env[\\w-.]*))?`);
 
     private readonly requestUrlRegex: RegExp = /^(?:[^\s]+\s+)([^:]*:\/\/\/?[^/\s]*\/?)/;
 
@@ -193,10 +193,16 @@ export class SystemVariableProvider implements HttpVariableProvider {
         this.resolveFuncs.set(Constants.DotenvVariableName, async (name, document) => {
             let folderPath = path.dirname(document.fileName);
             const { name : environmentName } = await EnvironmentController.getCurrentEnvironment();
+            const [, refToggle, key, dotEnvFilename] = this.dotenvRegex.exec(name) ?? [];
 
-            let pathsFound = [false, false];
+            if (key === undefined) {
+                return { warning: ResolveWarningMessage.IncorrectDotenvVariableFormat };
+            }
+
+            let pathsFound = [false, false, false];
 
             while ((pathsFound = await Promise.all([
+                !!dotEnvFilename && fs.pathExists(path.join(folderPath, dotEnvFilename)),
                 fs.pathExists(path.join(folderPath, `.env.${environmentName}`)),
                 fs.pathExists(path.join(folderPath, '.env'))
             ])).every(result => result === false)) {
@@ -205,23 +211,19 @@ export class SystemVariableProvider implements HttpVariableProvider {
                     return { warning: ResolveWarningMessage.DotenvFileNotFound };
                 }
             }
-            const absolutePath = path.join(folderPath, pathsFound[0] ? `.env.${environmentName}` : '.env');
-            const groups = this.dotenvRegex.exec(name);
-            if (groups !== null && groups.length === 3) {
-                const parsed = dotenv.parse(await fs.readFile(absolutePath));
-                const [, refToggle, key] = groups;
-                let dotEnvVarName = key;
-                if (refToggle !== undefined) {
-                    dotEnvVarName = await this.resolveSettingsEnvironmentVariable(key);
-                }
-                if (!(dotEnvVarName in parsed)) {
-                    return { warning: ResolveWarningMessage.DotenvVariableNotFound };
-                }
+            const envFilename = dotEnvFilename ?? (pathsFound[1] ? `.env.${environmentName}` : ".env");
 
-                return { value: parsed[dotEnvVarName] };
+            const absolutePath = path.join(folderPath, envFilename);
+            const parsed = dotenv.parse(await fs.readFile(absolutePath));
+            let dotEnvVarName = key;
+            if (refToggle !== undefined) {
+                dotEnvVarName = await this.resolveSettingsEnvironmentVariable(key);
+            }
+            if (!(dotEnvVarName in parsed)) {
+                return { warning: ResolveWarningMessage.DotenvVariableNotFound };
             }
 
-            return { warning: ResolveWarningMessage.IncorrectDotenvVariableFormat };
+            return { value: parsed[dotEnvVarName] };
         });
     }