diff --git a/crates/aiken-lang/src/ast.rs b/crates/aiken-lang/src/ast.rs
index ac297986..885c2576 100644
--- a/crates/aiken-lang/src/ast.rs
+++ b/crates/aiken-lang/src/ast.rs
@@ -28,6 +28,7 @@ pub type UntypedModule = Module<(), UntypedDefinition>;
 pub enum ModuleKind {
     Lib,
     Validator,
+    Env,
 }
 
 impl ModuleKind {
@@ -38,6 +39,10 @@ impl ModuleKind {
     pub fn is_lib(&self) -> bool {
         matches!(self, ModuleKind::Lib)
     }
+
+    pub fn is_env(&self) -> bool {
+        matches!(self, ModuleKind::Env)
+    }
 }
 
 #[derive(Debug, Clone, PartialEq, Eq, serde::Serialize, serde::Deserialize)]
diff --git a/crates/aiken-lang/src/tipo/environment.rs b/crates/aiken-lang/src/tipo/environment.rs
index 81753bf4..564afa19 100644
--- a/crates/aiken-lang/src/tipo/environment.rs
+++ b/crates/aiken-lang/src/tipo/environment.rs
@@ -785,7 +785,9 @@ impl<'a> Environment<'a> {
                         })?;
 
                 if module_info.kind.is_validator()
-                    && (self.current_kind.is_lib() || !self.current_module.starts_with("tests"))
+                    && (self.current_kind.is_lib()
+                        || self.current_kind.is_env()
+                        || !self.current_module.starts_with("tests"))
                 {
                     return Err(Error::ValidatorImported {
                         location: *location,
diff --git a/crates/aiken-project/src/error.rs b/crates/aiken-project/src/error.rs
index e6f890c7..c544eb14 100644
--- a/crates/aiken-project/src/error.rs
+++ b/crates/aiken-project/src/error.rs
@@ -127,6 +127,9 @@ pub enum Error {
 
     #[error("I couldn't find any exportable function named '{name}' in module '{module}'.")]
     ExportNotFound { module: String, name: String },
+
+    #[error("I located conditional modules under 'env', but no default one!")]
+    NoDefaultEnvironment,
 }
 
 impl Error {
@@ -195,6 +198,7 @@ impl ExtraData for Error {
             | Error::NoValidatorNotFound { .. }
             | Error::MoreThanOneValidatorFound { .. }
             | Error::Module { .. }
+            | Error::NoDefaultEnvironment { .. }
             | Error::ExportNotFound { .. } => None,
             Error::Type { error, .. } => error.extra_data(),
         }
@@ -224,6 +228,7 @@ impl GetSource for Error {
             | Error::NoValidatorNotFound { .. }
             | Error::MoreThanOneValidatorFound { .. }
             | Error::ExportNotFound { .. }
+            | Error::NoDefaultEnvironment { .. }
             | Error::Module { .. } => None,
             Error::DuplicateModule { second: path, .. }
             | Error::MissingManifest { path }
@@ -252,6 +257,7 @@ impl GetSource for Error {
             | Error::Json { .. }
             | Error::MalformedStakeAddress { .. }
             | Error::NoValidatorNotFound { .. }
+            | Error::NoDefaultEnvironment { .. }
             | Error::MoreThanOneValidatorFound { .. }
             | Error::ExportNotFound { .. }
             | Error::Module { .. } => None,
@@ -307,6 +313,7 @@ impl Diagnostic for Error {
             Error::NoValidatorNotFound { .. } => None,
             Error::MoreThanOneValidatorFound { .. } => None,
             Error::ExportNotFound { .. } => None,
+            Error::NoDefaultEnvironment { .. } => None,
             Error::Module(e) => e.code().map(boxed),
         }
     }
@@ -330,6 +337,9 @@ impl Diagnostic for Error {
             Error::MissingManifest { .. } => Some(Box::new(
                 "Try running `aiken new <REPOSITORY/PROJECT>` to initialise a project with an example manifest.",
             )),
+            Error::NoDefaultEnvironment { .. } => Some(Box::new(
+                "Environment module names are free, but there must be at least one named 'default.ak'.",
+            )),
             Error::TomlLoading { .. } => None,
             Error::Format { .. } => None,
             Error::TestFailure { .. } => None,
@@ -408,6 +418,7 @@ impl Diagnostic for Error {
             Error::MalformedStakeAddress { .. } => None,
             Error::NoValidatorNotFound { .. } => None,
             Error::MoreThanOneValidatorFound { .. } => None,
+            Error::NoDefaultEnvironment { .. } => None,
             Error::Module(e) => e.labels(),
         }
     }
@@ -419,6 +430,7 @@ impl Diagnostic for Error {
             Error::ImportCycle { .. } => None,
             Error::ExportNotFound { .. } => None,
             Error::Blueprint(e) => e.source_code(),
+            Error::NoDefaultEnvironment { .. } => None,
             Error::Parse { named, .. } => Some(named),
             Error::Type { named, .. } => Some(named),
             Error::StandardIo(_) => None,
@@ -462,6 +474,7 @@ impl Diagnostic for Error {
             Error::MalformedStakeAddress { .. } => None,
             Error::NoValidatorNotFound { .. } => None,
             Error::MoreThanOneValidatorFound { .. } => None,
+            Error::NoDefaultEnvironment { .. } => None,
             Error::Module(e) => e.url(),
         }
     }
@@ -476,6 +489,7 @@ impl Diagnostic for Error {
             Error::Parse { .. } => None,
             Error::Type { error, .. } => error.related(),
             Error::StandardIo(_) => None,
+            Error::NoDefaultEnvironment { .. } => None,
             Error::MissingManifest { .. } => None,
             Error::TomlLoading { .. } => None,
             Error::Format { .. } => None,
diff --git a/crates/aiken-project/src/lib.rs b/crates/aiken-project/src/lib.rs
index f9200e6c..2af5f0eb 100644
--- a/crates/aiken-project/src/lib.rs
+++ b/crates/aiken-project/src/lib.rs
@@ -65,6 +65,8 @@ use uplc::{
     PlutusData,
 };
 
+const DEFAULT_ENV_MODULE: &str = "default";
+
 #[derive(Debug)]
 pub struct Source {
     pub path: PathBuf,
@@ -611,11 +613,13 @@ where
     }
 
     fn read_source_files(&mut self) -> Result<(), Error> {
+        let env = self.root.join("env");
         let lib = self.root.join("lib");
         let validators = self.root.join("validators");
 
         self.aiken_files(&validators, ModuleKind::Validator)?;
         self.aiken_files(&lib, ModuleKind::Lib)?;
+        self.aiken_files(&env, ModuleKind::Env)?;
 
         Ok(())
     }
@@ -879,12 +883,18 @@ where
     }
 
     fn aiken_files(&mut self, dir: &Path, kind: ModuleKind) -> Result<(), Error> {
+        let mut has_default = None;
+
         walkdir::WalkDir::new(dir)
             .follow_links(true)
             .into_iter()
             .filter_map(Result::ok)
             .filter(|e| e.file_type().is_file())
             .try_for_each(|d| {
+                if has_default.is_none() {
+                    has_default = Some(false);
+                }
+
                 let path = d.into_path();
                 let keep = is_aiken_path(&path, dir);
                 let ext = path.extension();
@@ -895,11 +905,20 @@ where
                 }
 
                 if keep {
+                    if self.module_name(dir, &path).as_str() == DEFAULT_ENV_MODULE {
+                        has_default = Some(true);
+                    }
                     self.add_module(path, dir, kind)
                 } else {
                     Ok(())
                 }
-            })
+            })?;
+
+        if kind == ModuleKind::Env && has_default == Some(false) {
+            return Err(Error::NoDefaultEnvironment);
+        }
+
+        Ok(())
     }
 
     fn add_module(&mut self, path: PathBuf, dir: &Path, kind: ModuleKind) -> Result<(), Error> {