diff --git a/src/shell/interpreter.zig b/src/shell/interpreter.zig
index 1797b6dcaa..2bd94de5bb 100644
--- a/src/shell/interpreter.zig
+++ b/src/shell/interpreter.zig
@@ -773,7 +773,42 @@ pub const Interpreter = struct {
         cwd_: ?[]const u8,
     ) shell.Result(*ThisInterpreter) {
         const export_env = brk: {
-            if (event_loop == .js) break :brk if (export_env_) |e| e else EnvMap.init(allocator);
+            if (event_loop == .js) {
+                var env_map = if (export_env_) |e| e else env_blk: {
+                    // Initialize with current process environment for Bun.$ when no env provided
+                    var env = EnvMap.init(allocator);
+                    
+                    // Copy current process environment
+                    for (std.os.environ) |env_ptr| {
+                        const env_str = bun.span(env_ptr);
+                        if (bun.strings.indexOfChar(env_str, '=')) |eq_index| {
+                            const key = env_str[0..eq_index];
+                            const value = env_str[eq_index + 1..];
+                            if (key.len > 0) {
+                                const key_envstr = EnvStr.initSlice(key);
+                                const value_envstr = EnvStr.initSlice(value);
+                                env.insert(key_envstr, value_envstr);
+                            }
+                        }
+                    }
+                    
+                    break :env_blk env;
+                };
+                
+                // Always set SHELL environment variable to Bun executable path for Bun.$
+                if (bun.selfExePath()) |self_exe_path| {
+                    const shell_key = EnvStr.initSlice("SHELL");
+                    const shell_value = EnvStr.initSlice(self_exe_path);
+                    env_map.insert(shell_key, shell_value);
+                } else |_| {
+                    // If we can't get the executable path, fall back to a default
+                    const shell_key = EnvStr.initSlice("SHELL");
+                    const shell_value = EnvStr.initSlice("bun");
+                    env_map.insert(shell_key, shell_value);
+                }
+                
+                break :brk env_map;
+            }
 
             var env_loader: *bun.DotEnv.Loader = env_loader: {
                 if (event_loop == .js) {
@@ -794,6 +829,18 @@ pub const Interpreter = struct {
                 export_env.insert(key, value);
             }
 
+            // Set SHELL environment variable to Bun executable path
+            if (bun.selfExePath()) |self_exe_path| {
+                const shell_key = EnvStr.initSlice("SHELL");
+                const shell_value = EnvStr.initSlice(self_exe_path);
+                export_env.insert(shell_key, shell_value);
+            } else |_| {
+                // If we can't get the executable path, fall back to a default
+                const shell_key = EnvStr.initSlice("SHELL");
+                const shell_value = EnvStr.initSlice("bun");
+                export_env.insert(shell_key, shell_value);
+            }
+
             break :brk export_env;
         };
 
diff --git a/test/js/bun/shell/bunshell.test.ts b/test/js/bun/shell/bunshell.test.ts
index e4f04cdd5c..d932c61042 100644
--- a/test/js/bun/shell/bunshell.test.ts
+++ b/test/js/bun/shell/bunshell.test.ts
@@ -444,6 +444,39 @@ describe("bunshell", () => {
     });
   });
 
+  describe("SHELL environment variable", () => {
+    test("should be set to Bun executable path", async () => {
+      const { stdout } = await $`echo $SHELL`;
+      const shellPath = stdout.toString().trim();
+      
+      // Should contain "bun" in the path
+      expect(shellPath).toContain("bun");
+      
+      // Should be an absolute path
+      expect(shellPath).toMatch(/^\/|^[A-Z]:\\/);
+    });
+
+    test("should be set in shell scripts", async () => {
+      const tempdir = tmpdirSync();
+      const scriptPath = join(tempdir, "test_shell.sh");
+      
+      // Create a shell script that prints SHELL
+      await Bun.write(scriptPath, 'echo "SHELL: $SHELL"');
+      
+      const result = await $`bun ${scriptPath}`.text();
+      
+      expect(result).toContain("SHELL:");
+      expect(result).toContain("bun");
+    });
+
+    TestBuilder.command`echo $SHELL`
+      .stdout(stdout => {
+        expect(stdout.trim()).toContain("bun");
+        expect(stdout.trim()).toMatch(/^\/|^[A-Z]:\\/);
+      })
+      .runAsTest("SHELL via TestBuilder");
+  });
+
   // Ported from GNU bash "quote.tests"
   // https://github.com/bminor/bash/blob/f3b6bd19457e260b65d11f2712ec3da56cef463f/tests/quote.tests#L1
   // Some backtick tests are skipped, because of insane behavior: