diff --git a/.changelog/7644.txt b/.changelog/7644.txt
new file mode 100644
index 00000000000..14a5f44d351
--- /dev/null
+++ b/.changelog/7644.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+provider: fixed an issue where the `USER_PROJECT_OVERRIDE` environment variable was not being read
+```
diff --git a/google/config.go b/google/config.go
index 27f69cdd4f6..249debf3519 100644
--- a/google/config.go
+++ b/google/config.go
@@ -486,54 +486,62 @@ var DefaultClientScopes = []string{
 	"https://www.googleapis.com/auth/userinfo.email",
 }
 
-func HandleSDKDefaults(d *schema.ResourceData) {
+func HandleSDKDefaults(d *schema.ResourceData) error {
 	if d.Get("impersonate_service_account") == "" {
-		d.Set("impersonate_service_account", MultiEnvSearch([]string{
+		d.Set("impersonate_service_account", MultiEnvDefault([]string{
 			"GOOGLE_IMPERSONATE_SERVICE_ACCOUNT",
-		}))
+		}, nil))
 	}
 
 	if d.Get("project") == "" {
-		d.Set("project", MultiEnvSearch([]string{
+		d.Set("project", MultiEnvDefault([]string{
 			"GOOGLE_PROJECT",
 			"GOOGLE_CLOUD_PROJECT",
 			"GCLOUD_PROJECT",
 			"CLOUDSDK_CORE_PROJECT",
-		}))
+		}, nil))
 	}
 
 	if d.Get("billing_project") == "" {
-		d.Set("billing_project", MultiEnvSearch([]string{
+		d.Set("billing_project", MultiEnvDefault([]string{
 			"GOOGLE_BILLING_PROJECT",
-		}))
+		}, nil))
 	}
 
 	if d.Get("region") == "" {
-		d.Set("region", MultiEnvSearch([]string{
+		d.Set("region", MultiEnvDefault([]string{
 			"GOOGLE_REGION",
 			"GCLOUD_REGION",
 			"CLOUDSDK_COMPUTE_REGION",
-		}))
+		}, nil))
 	}
 
 	if d.Get("zone") == "" {
-		d.Set("zone", MultiEnvSearch([]string{
+		d.Set("zone", MultiEnvDefault([]string{
 			"GOOGLE_ZONE",
 			"GCLOUD_ZONE",
 			"CLOUDSDK_COMPUTE_ZONE",
-		}))
+		}, nil))
 	}
 
-	if d.Get("user_project_override") == "" {
-		d.Set("user_project_override", MultiEnvSearch([]string{
+	if _, ok := d.GetOkExists("user_project_override"); !ok {
+		override := MultiEnvDefault([]string{
 			"USER_PROJECT_OVERRIDE",
-		}))
+		}, nil)
+
+		if override != nil {
+			b, err := strconv.ParseBool(override.(string))
+			if err != nil {
+				return err
+			}
+			d.Set("user_project_override", b)
+		}
 	}
 
 	if d.Get("request_reason") == "" {
-		d.Set("request_reason", MultiEnvSearch([]string{
+		d.Set("request_reason", MultiEnvDefault([]string{
 			"CLOUDSDK_CORE_REQUEST_REASON",
-		}))
+		}, nil))
 	}
 
 	// Generated Products
@@ -1033,6 +1041,8 @@ func HandleSDKDefaults(d *schema.ResourceData) {
 			"GOOGLE_CONTAINERAZURE_CUSTOM_ENDPOINT",
 		}, DefaultBasePaths[ContainerAzureBasePathKey]))
 	}
+
+	return nil
 }
 
 func (c *Config) LoadAndValidate(ctx context.Context) error {
diff --git a/google/provider.go b/google/provider.go
index e8b7dd903eb..65b72e02b0a 100644
--- a/google/provider.go
+++ b/google/provider.go
@@ -1321,7 +1321,10 @@ func ResourceMapWithErrors() (map[string]*schema.Resource, error) {
 }
 
 func providerConfigure(ctx context.Context, d *schema.ResourceData, p *schema.Provider) (interface{}, diag.Diagnostics) {
-	HandleSDKDefaults(d)
+	err := HandleSDKDefaults(d)
+	if err != nil {
+		return nil, diag.FromErr(err)
+	}
 	HandleDCLCustomEndpointDefaults(d)
 
 	config := Config{
diff --git a/google/provider_dcl_endpoints.go b/google/provider_dcl_endpoints.go
index d0252391e6c..bd484d798f2 100644
--- a/google/provider_dcl_endpoints.go
+++ b/google/provider_dcl_endpoints.go
@@ -112,54 +112,54 @@ func ConfigureDCLProvider(provider *schema.Provider) {
 
 func HandleDCLCustomEndpointDefaults(d *schema.ResourceData) {
 	if d.Get(ApikeysEndpointEntryKey) == "" {
-		d.Set(ApikeysEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(ApikeysEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_APIKEYS_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(AssuredWorkloadsEndpointEntryKey) == "" {
-		d.Set(AssuredWorkloadsEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(AssuredWorkloadsEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_ASSURED_WORKLOADS_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(CloudBuildWorkerPoolEndpointEntryKey) == "" {
-		d.Set(CloudBuildWorkerPoolEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(CloudBuildWorkerPoolEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_CLOUD_BUILD_WORKER_POOL_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(ClouddeployEndpointEntryKey) == "" {
-		d.Set(ClouddeployEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(ClouddeployEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_CLOUDDEPLOY_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(CloudResourceManagerEndpointEntryKey) == "" {
-		d.Set(CloudResourceManagerEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(CloudResourceManagerEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_CLOUD_RESOURCE_MANAGER_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(EventarcEndpointEntryKey) == "" {
-		d.Set(EventarcEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(EventarcEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_EVENTARC_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(FirebaserulesEndpointEntryKey) == "" {
-		d.Set(FirebaserulesEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(FirebaserulesEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_FIREBASERULES_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(NetworkConnectivityEndpointEntryKey) == "" {
-		d.Set(NetworkConnectivityEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(NetworkConnectivityEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_NETWORK_CONNECTIVITY_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(OrgPolicyEndpointEntryKey) == "" {
-		d.Set(OrgPolicyEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(OrgPolicyEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_ORG_POLICY_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 	if d.Get(RecaptchaEnterpriseEndpointEntryKey) == "" {
-		d.Set(RecaptchaEnterpriseEndpointEntryKey, MultiEnvSearch([]string{
+		d.Set(RecaptchaEnterpriseEndpointEntryKey, MultiEnvDefault([]string{
 			"GOOGLE_RECAPTCHA_ENTERPRISE_CUSTOM_ENDPOINT",
-		}))
+		}, ""))
 	}
 }