diff --git a/CHANGELOG.md b/CHANGELOG.md
index e7c4ec618c..8b501dec20 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,11 @@
 
 # UNRELEASED
 
+### fix: set `CANISTER_CANDID_PATH_<canister name>` properly for remote canisters
+
+In the remote canister declaration it is possible to set a candid file to use when the canister is remote on a specific network.
+`dfx` now correctly sets the `CANISTER_CANDID_PATH_<canister name>` environment variable during the build process on remote networks if the file exists.
+
 ### feat: display schema for dfx metadata json
 
 `dfx schema --for dfx-metadata` to display JSON schema of the "dfx" metadata.
diff --git a/e2e/assets/remote/envvar/dfx.json b/e2e/assets/remote/envvar/dfx.json
index ec52f70e28..5530be1420 100644
--- a/e2e/assets/remote/envvar/dfx.json
+++ b/e2e/assets/remote/envvar/dfx.json
@@ -4,7 +4,7 @@
             "type": "custom",
             "candid": "main.did",
             "wasm": "main.wasm",
-            "build": "bash -c 'echo \"CANISTER_ID_REMOTE: $CANISTER_ID_REMOTE\"'",
+            "build": "bash -c 'echo \"CANISTER_ID_REMOTE: $CANISTER_ID_REMOTE\nCANISTER_CANDID_PATH_REMOTE: $CANISTER_CANDID_PATH_REMOTE\"'",
             "dependencies": [
                 "remote"
             ]
@@ -12,6 +12,7 @@
         "remote": {
             "main": "remote.mo",
             "remote": {
+                "candid": "remotecandid.did",
                 "id": {
                     "actuallylocal": "qoctq-giaaa-aaaaa-aaaea-cai"
                 }
diff --git a/e2e/assets/remote/envvar/remotecandid.did b/e2e/assets/remote/envvar/remotecandid.did
new file mode 100644
index 0000000000..c28255a393
--- /dev/null
+++ b/e2e/assets/remote/envvar/remotecandid.did
@@ -0,0 +1 @@
+service {}
diff --git a/e2e/tests-dfx/remote.bash b/e2e/tests-dfx/remote.bash
index bef462d540..390070157e 100644
--- a/e2e/tests-dfx/remote.bash
+++ b/e2e/tests-dfx/remote.bash
@@ -317,4 +317,5 @@ teardown() {
 
   assert_command dfx deploy --network actuallylocal -vv
   assert_match "CANISTER_ID_REMOTE: qoctq-giaaa-aaaaa-aaaea-cai"
+  assert_contains "CANISTER_CANDID_PATH_REMOTE: $(pwd -P)/remotecandid.did"
 }
diff --git a/src/dfx/src/lib/builders/mod.rs b/src/dfx/src/lib/builders/mod.rs
index 2d889e335f..866f7cd1ff 100644
--- a/src/dfx/src/lib/builders/mod.rs
+++ b/src/dfx/src/lib/builders/mod.rs
@@ -399,7 +399,15 @@ pub fn get_and_write_environment_variables<'a>(
     ];
     for dep in dependencies {
         let canister = pool.get_canister(dep).unwrap();
-        if let Some(output) = canister.get_build_output() {
+        if let Some(candid_path) = canister.get_info().get_remote_candid_if_remote() {
+            vars.push((
+                Owned(format!(
+                    "CANISTER_CANDID_PATH_{}",
+                    canister.get_name().replace('-', "_").to_ascii_uppercase()
+                )),
+                Owned(candid_path.as_os_str().to_owned()),
+            ));
+        } else if let Some(output) = canister.get_build_output() {
             let candid_path = match &output.idl {
                 IdlBuildOutput::File(p) => p.as_os_str(),
             };
diff --git a/src/dfx/src/lib/canister_info.rs b/src/dfx/src/lib/canister_info.rs
index df7e04df57..ada2099d57 100644
--- a/src/dfx/src/lib/canister_info.rs
+++ b/src/dfx/src/lib/canister_info.rs
@@ -9,6 +9,7 @@ use dfx_core::config::model::dfinity::{
     CanisterDeclarationsConfig, CanisterMetadataSection, CanisterTypeProperties, Config, Pullable,
     TechStack, WasmOptLevel,
 };
+use dfx_core::fs::canonicalize;
 use dfx_core::network::provider::get_network_context;
 use dfx_core::util;
 use fn_error_context::context;
@@ -114,11 +115,11 @@ impl CanisterInfo {
             .as_ref()
             .and_then(|remote| remote.id.get(&network_name))
             .copied();
-        let remote_candid = canister_config
-            .remote
-            .as_ref()
-            .and_then(|r| r.candid.as_ref())
-            .cloned();
+        let remote_candid = canister_config.remote.as_ref().and_then(|r| {
+            r.candid
+                .as_ref()
+                .and_then(|candid| canonicalize(candid).ok())
+        });
 
         // Fill the default config values if None provided
         let declarations_config = CanisterDeclarationsConfig {