diff --git a/docs/pex.md b/docs/pex.md
index 92504a3e..590eaadd 100644
--- a/docs/pex.md
+++ b/docs/pex.md
@@ -25,7 +25,8 @@ py_pex_binary(
 ## py_pex_binary
 
 <pre>
-py_pex_binary(<a href="#py_pex_binary-name">name</a>, <a href="#py_pex_binary-binary">binary</a>, <a href="#py_pex_binary-inject_env">inject_env</a>, <a href="#py_pex_binary-python_interpreter_constraints">python_interpreter_constraints</a>, <a href="#py_pex_binary-python_shebang">python_shebang</a>)
+py_pex_binary(<a href="#py_pex_binary-name">name</a>, <a href="#py_pex_binary-binary">binary</a>, <a href="#py_pex_binary-inherit_path">inherit_path</a>, <a href="#py_pex_binary-inject_env">inject_env</a>, <a href="#py_pex_binary-python_interpreter_constraints">python_interpreter_constraints</a>,
+              <a href="#py_pex_binary-python_shebang">python_shebang</a>)
 </pre>
 
 Build a pex executable from a py_binary
@@ -37,6 +38,7 @@ Build a pex executable from a py_binary
 | :------------- | :------------- | :------------- | :------------- | :------------- |
 | <a id="py_pex_binary-name"></a>name |  A unique name for this target.   | <a href="https://bazel.build/concepts/labels#target-names">Name</a> | required |  |
 | <a id="py_pex_binary-binary"></a>binary |  A py_binary target   | <a href="https://bazel.build/concepts/labels">Label</a> | required |  |
+| <a id="py_pex_binary-inherit_path"></a>inherit_path |  Whether to inherit the <code>sys.path</code> (aka PYTHONPATH) of the environment that the binary runs in.<br><br>Use <code>false</code> to not inherit <code>sys.path</code>; use <code>fallback</code> to inherit <code>sys.path</code> after packaged dependencies; and use <code>prefer</code> to inherit <code>sys.path</code> before packaged dependencies.   | String | optional | <code>""</code> |
 | <a id="py_pex_binary-inject_env"></a>inject_env |  Environment variables to set when running the pex binary.   | <a href="https://bazel.build/rules/lib/dict">Dictionary: String -> String</a> | optional | <code>{}</code> |
 | <a id="py_pex_binary-python_interpreter_constraints"></a>python_interpreter_constraints |  Python interpreter versions this PEX binary is compatible with. A list of semver strings.  The placeholder strings <code>{major}</code>, <code>{minor}</code>, <code>{patch}</code> can be used for gathering version  information from the hermetic python toolchain.   | List of strings | optional | <code>["CPython=={major}.{minor}.*"]</code> |
 | <a id="py_pex_binary-python_shebang"></a>python_shebang |  -   | String | optional | <code>"#!/usr/bin/env python3"</code> |
diff --git a/py/private/py_pex_binary.bzl b/py/private/py_pex_binary.bzl
index e3d99609..354cb45c 100644
--- a/py/private/py_pex_binary.bzl
+++ b/py/private/py_pex_binary.bzl
@@ -106,6 +106,9 @@ def _py_python_pex_impl(ctx):
     args.add(ctx.attr.python_shebang, format = "--python-shebang=%s")
     args.add(py_toolchain.python, format = "--python=%s")
 
+    if ctx.attr.inherit_path != "":
+        args.add(ctx.attr.inherit_path, format = "--inherit-path=%s")
+
     py_version = py_toolchain.interpreter_version_info
     args.add_all(
         [
@@ -135,6 +138,15 @@ _attrs = dict({
         doc = "Environment variables to set when running the pex binary.",
         default = {},
     ),
+    "inherit_path": attr.string(
+        doc = """\
+Whether to inherit the `sys.path` (aka PYTHONPATH) of the environment that the binary runs in.
+
+Use `false` to not inherit `sys.path`; use `fallback` to inherit `sys.path` after packaged
+dependencies; and use `prefer` to inherit `sys.path` before packaged dependencies.
+""",
+        values = ["false", "fallback", "prefer"],
+    ),
     "python_shebang": attr.string(default = "#!/usr/bin/env python3"),
     "python_interpreter_constraints": attr.string_list(
         default = ["CPython=={major}.{minor}.*"],
diff --git a/py/tools/pex/main.py b/py/tools/pex/main.py
index e2880e1d..996da25b 100644
--- a/py/tools/pex/main.py
+++ b/py/tools/pex/main.py
@@ -9,6 +9,7 @@
 
 import sys
 from pex.pex_builder import Check,PEXBuilder
+from pex.inherit_path import InheritPath
 from pex.interpreter import PythonInterpreter
 from pex.interpreter_constraints import InterpreterConstraint
 from pex.layout import Layout
@@ -26,6 +27,13 @@ def __call__(self, parser, namespace, value, option_str=None):
             )
         self.default.append(tuple(components))
 
+
+class InheritPathAction(Action):
+    def __call__(self, parser, namespace, value, option_str=None):
+        value = InheritPath.for_value(value)
+        setattr(namespace, self.dest, value)
+
+
 parser = ArgumentParser(fromfile_prefix_chars='@')
 
 parser.add_argument(
@@ -107,6 +115,13 @@ def __call__(self, parser, namespace, value, option_str=None):
     action="append",
 )
 
+parser.add_argument(
+    "--inherit-path",
+    dest="inherit_path",
+    default=None,
+    action=InheritPathAction,
+)
+
 options = parser.parse_args(args = sys.argv[1:])
 
 # Monkey patch bootstrap template to inject some templated environment variables.
@@ -157,6 +172,8 @@ def __call__(self, parser, namespace, value, option_str=None):
     InterpreterConstraint.parse(constraint) 
     for constraint in options.constraints
 ]
+if options.inherit_path is not None:
+    pex_info.inherit_path = options.inherit_path
 
 for dep in options.dependencies:
     dist = Distribution.load(dep)