diff --git a/xtask/src/cargo.rs b/xtask/src/cargo.rs
index 3b815508f..cd982332d 100644
--- a/xtask/src/cargo.rs
+++ b/xtask/src/cargo.rs
@@ -216,12 +216,28 @@ fn sanitized_path(orig_path: OsString) -> OsString {
     env::join_paths(sanitized_paths).expect("invalid PATH")
 }
 
-/// Cargo automatically sets some env vars that can prevent the
-/// channel arg (e.g. "+nightly") from working. Unset them in the
-/// child's environment.
-pub fn fix_nested_cargo_env(cmd: &mut Command) {
+/// Update a command env to make nested cargo invocations work correctly.
+///
+/// Cargo automatically sets some env vars that cause problems with nested cargo
+/// invocations. In particular, these env vars can:
+/// * Cause unwanted rebuilds, e.g. running `cargo xtask test` multiple times
+///   will rebuild every time because cached dependencies are marked as stale.
+/// * Prevent channels args (e.g. "+nightly") from working.
+///
+/// Some related issues:
+/// * <https://github.com/rust-lang/cargo/issues/15099>
+/// * <https://github.com/rust-lang/rustup/issues/3031>
+fn fix_nested_cargo_env(cmd: &mut Command) {
     cmd.env_remove("RUSTC");
     cmd.env_remove("RUSTDOC");
+
+    // Clear all vars starting with `CARGO`.
+    for (name, _) in env::vars() {
+        if name.starts_with("CARGO") {
+            cmd.env_remove(name);
+        }
+    }
+
     let orig_path = env::var_os("PATH").unwrap_or_default();
     cmd.env("PATH", sanitized_path(orig_path));
 }
diff --git a/xtask/src/util.rs b/xtask/src/util.rs
index 4b6a970b8..90e02dada 100644
--- a/xtask/src/util.rs
+++ b/xtask/src/util.rs
@@ -8,12 +8,15 @@ use std::process::Command;
 /// Example: "VAR=val program --arg1 arg2".
 pub fn command_to_string(cmd: &Command) -> String {
     // Format env vars as "name=val".
-    let ignore_var = ["PATH", "RUSTC", "RUSTDOC"];
     let mut parts = cmd
         .get_envs()
-        // Filter out some internally-set variables that would just
-        // clutter the output.
-        .filter(|(name, _)| !ignore_var.contains(&name.to_str().unwrap_or_default()))
+        // Filter out variables that are set or cleared by
+        // `fix_nested_cargo_env`, as they would clutter the output.
+        .filter(|(name, val)| {
+            *name != "PATH"
+                // Exclude any variables cleared with `Command::env_remove`.
+                && val.is_some()
+        })
         .map(|(name, val)| {
             format!(
                 "{}={}",
@@ -53,13 +56,10 @@ mod tests {
     #[test]
     fn test_command_to_string() {
         let mut cmd = Command::new("MyCommand");
-        cmd.args(["abc", "123"]).envs([
-            ("VAR1", "val1"),
-            ("VAR2", "val2"),
-            ("PATH", "pathval"),
-            ("RUSTC", "rustcval"),
-            ("RUSTDOC", "rustdocval"),
-        ]);
+        cmd.args(["abc", "123"])
+            .envs([("VAR1", "val1"), ("VAR2", "val2"), ("PATH", "pathval")])
+            .env_remove("RUSTC")
+            .env_remove("CARGO");
         assert_eq!(
             command_to_string(&cmd),
             "VAR1=val1 VAR2=val2 MyCommand abc 123"