diff --git a/pydantic_settings/sources/providers/env.py b/pydantic_settings/sources/providers/env.py
index 5a350f1d..0c6e257e 100644
--- a/pydantic_settings/sources/providers/env.py
+++ b/pydantic_settings/sources/providers/env.py
@@ -7,6 +7,7 @@
     Any,
 )
 
+from pydantic import Json, TypeAdapter, ValidationError
 from pydantic._internal._utils import deep_update, is_model_class
 from pydantic.dataclasses import is_pydantic_dataclass
 from pydantic.fields import FieldInfo
@@ -17,6 +18,7 @@
 from ..base import PydanticBaseEnvSettingsSource
 from ..types import EnvNoneType
 from ..utils import (
+    _annotation_contains_types,
     _annotation_enum_name_to_val,
     _get_model_fields,
     _union_is_complex,
@@ -125,7 +127,7 @@ def prepare_field_value(self, field_name: str, field: FieldInfo, value: Any, val
                     return value
         elif value is not None:
             # simplest case, field is not complex, we only need to add the value if it was found
-            return value
+            return self._coerce_env_val_strict(field, value)
 
     def _field_is_complex(self, field: FieldInfo) -> tuple[bool, bool]:
         """
@@ -256,10 +258,31 @@ def explode_env_vars(self, field_name: str, field: FieldInfo, env_vars: Mapping[
                             raise e
             if isinstance(env_var, dict):
                 if last_key not in env_var or not isinstance(env_val, EnvNoneType) or env_var[last_key] == {}:
-                    env_var[last_key] = env_val
-
+                    env_var[last_key] = self._coerce_env_val_strict(target_field, env_val)
         return result
 
+    def _coerce_env_val_strict(self, field: FieldInfo | None, value: Any) -> Any:
+        """
+        Coerce environment string values based on field annotation if model config is `strict=True`.
+
+        Args:
+            field: The field.
+            value: The value to coerce.
+
+        Returns:
+            The coerced value if successful, otherwise the original value.
+        """
+        try:
+            if self.config.get('strict') and isinstance(value, str) and field is not None:
+                if value == self.env_parse_none_str:
+                    return value
+                if not _annotation_contains_types(field.annotation, (Json,), is_instance=True):
+                    return TypeAdapter(field.annotation).validate_python(value)
+        except ValidationError:
+            # Allow validation error to be raised at time of instatiation
+            pass
+        return value
+
     def __repr__(self) -> str:
         return (
             f'{self.__class__.__name__}(env_nested_delimiter={self.env_nested_delimiter!r}, '
diff --git a/pydantic_settings/sources/utils.py b/pydantic_settings/sources/utils.py
index 56bfb3ea..3c004608 100644
--- a/pydantic_settings/sources/utils.py
+++ b/pydantic_settings/sources/utils.py
@@ -92,15 +92,24 @@ def _annotation_contains_types(
     types: tuple[Any, ...],
     is_include_origin: bool = True,
     is_strip_annotated: bool = False,
+    is_instance: bool = False,
 ) -> bool:
     """Check if a type annotation contains any of the specified types."""
     if is_strip_annotated:
         annotation = _strip_annotated(annotation)
-    if is_include_origin is True and get_origin(annotation) in types:
-        return True
+    if is_include_origin is True:
+        origin = get_origin(annotation)
+        if origin in types:
+            return True
+        if is_instance and any(isinstance(origin, type_) for type_ in types):
+            return True
     for type_ in get_args(annotation):
-        if _annotation_contains_types(type_, types, is_include_origin=True, is_strip_annotated=is_strip_annotated):
+        if _annotation_contains_types(
+            type_, types, is_include_origin=True, is_strip_annotated=is_strip_annotated, is_instance=is_instance
+        ):
             return True
+    if is_instance and any(isinstance(annotation, type_) for type_ in types):
+        return True
     return annotation in types
 
 
diff --git a/tests/test_settings.py b/tests/test_settings.py
index 7949eb38..fd5c0154 100644
--- a/tests/test_settings.py
+++ b/tests/test_settings.py
@@ -3200,3 +3200,41 @@ class Settings(BaseSettings):
             f'source to the settings sources via the settings_customise_sources hook.'
         )
         assert warning.message.args[0] == expected_message
+
+
+def test_env_strict_coercion(env):
+    class SubModel(BaseModel):
+        my_str: str
+        my_int: int
+
+    class Settings(BaseSettings, env_nested_delimiter='__'):
+        my_str: str
+        my_int: int
+        sub_model: SubModel
+
+    env.set('MY_STR', '0')
+    env.set('MY_INT', '0')
+    env.set('SUB_MODEL__MY_STR', '1')
+    env.set('SUB_MODEL__MY_INT', '1')
+    Settings().model_dump() == {
+        'my_str': '0',
+        'my_int': 0,
+        'sub_model': {
+            'my_str': '1',
+            'my_int': 1,
+        },
+    }
+
+    class StrictSettings(BaseSettings, env_nested_delimiter='__', strict=True):
+        my_str: str
+        my_int: int
+        sub_model: SubModel
+
+    StrictSettings().model_dump() == {
+        'my_str': '0',
+        'my_int': 0,
+        'sub_model': {
+            'my_str': '1',
+            'my_int': 1,
+        },
+    }