diff --git a/.changes/unreleased/Fixes-20240709-172440.yaml b/.changes/unreleased/Fixes-20240709-172440.yaml
new file mode 100644
index 00000000000..4931b2f80f0
--- /dev/null
+++ b/.changes/unreleased/Fixes-20240709-172440.yaml
@@ -0,0 +1,6 @@
+kind: Fixes
+body: CLI flags should take precedence over env var flags
+time: 2024-07-09T17:24:40.918977-04:00
+custom:
+  Author: gshank
+  Issue: "10304"
diff --git a/core/dbt/cli/flags.py b/core/dbt/cli/flags.py
index 33c2e519819..4f1bcc2c4df 100644
--- a/core/dbt/cli/flags.py
+++ b/core/dbt/cli/flags.py
@@ -92,6 +92,8 @@ def __init__(
         # Set the default flags.
         for key, value in FLAGS_DEFAULTS.items():
             object.__setattr__(self, key, value)
+        # Use to handle duplicate params in _assign_params
+        flags_defaults_list = list(FLAGS_DEFAULTS.keys())
 
         if ctx is None:
             ctx = get_current_context()
@@ -173,13 +175,29 @@ def _assign_params(
                         old_name=dep_param.envvar,
                         new_name=new_param.envvar,
                     )
+                # end deprecated_params
 
                 # Set the flag value.
-                is_duplicate = hasattr(self, param_name.upper())
+                is_duplicate = (
+                    hasattr(self, param_name.upper())
+                    and param_name.upper() not in flags_defaults_list
+                )
+                # First time through, set as though FLAGS_DEFAULTS hasn't been set, so not a duplicate.
+                # Subsequent pass (to process "parent" params) should be treated as duplicates.
+                if param_name.upper() in flags_defaults_list:
+                    flags_defaults_list.remove(param_name.upper())
+                # Note: the following determines whether parameter came from click default,
+                # not from FLAGS_DEFAULTS in __init__.
                 is_default = ctx.get_parameter_source(param_name) == ParameterSource.DEFAULT
+                is_envvar = ctx.get_parameter_source(param_name) == ParameterSource.ENVIRONMENT
+
                 flag_name = (new_name or param_name).upper()
 
-                if (is_duplicate and not is_default) or not is_duplicate:
+                # envvar flags are assigned in either parent or child context if there
+                # isn't an overriding cli command flag.
+                # If the flag has been encountered as a child cli flag, we don't
+                # want to overwrite with parent envvar, since the commandline flag takes precedence.
+                if (is_duplicate and not (is_default or is_envvar)) or not is_duplicate:
                     object.__setattr__(self, flag_name, param_value)
 
                 # Track default assigned params.
diff --git a/tests/unit/cli/test_flags.py b/tests/unit/cli/test_flags.py
index da5a8490d84..5169cae048b 100644
--- a/tests/unit/cli/test_flags.py
+++ b/tests/unit/cli/test_flags.py
@@ -380,6 +380,22 @@ def test_global_flag_at_child_context(self):
 
         assert flags_a.USE_COLORS == flags_b.USE_COLORS
 
+    def test_global_flag_with_env_var(self, monkeypatch):
+        # The environment variable is used for whichever parent or child
+        # does not have a cli command.
+        # Test that "child" global flag overrides env var
+        monkeypatch.setenv("DBT_QUIET", "0")
+        parent_context = self.make_dbt_context("parent", ["--no-use-colors"])
+        child_context = self.make_dbt_context("child", ["--quiet"], parent_context)
+        flags = Flags(child_context)
+        assert flags.QUIET is True
+
+        # Test that "parent" global flag overrides env var
+        parent_context = self.make_dbt_context("parent", ["--quiet"])
+        child_context = self.make_dbt_context("child", ["--no-use-colors"], parent_context)
+        flags = Flags(child_context)
+        assert flags.QUIET is True
+
     def test_set_project_only_flags(self, project_flags, run_context):
         flags = Flags(run_context, project_flags)