diff --git a/litellm/proxy/proxy_server.py b/litellm/proxy/proxy_server.py
index 920e7989d14..80d9868ff0e 100644
--- a/litellm/proxy/proxy_server.py
+++ b/litellm/proxy/proxy_server.py
@@ -4944,14 +4944,7 @@ class ProxyConfig:
                 await prisma_client.insert_data(data=unmanaged_config, table_name="config")
 
             environment_variables: Final = new_config.get("environment_variables")
-            if (
-                include_env_vars
-                and environment_variables is not None
-                and (
-                    "environment_variables" not in baseline
-                    or baseline["environment_variables"] != environment_variables
-                )
-            ):
+            if include_env_vars and environment_variables is not None:
                 encrypted_environment_variables: Final = (
                     self._encrypt_env_variables_for_db(environment_variables=environment_variables)
                     if isinstance(environment_variables, dict) and environment_variables
diff --git a/tests/test_litellm/proxy/proxy_server/test_proxy_config.py b/tests/test_litellm/proxy/proxy_server/test_proxy_config.py
index 1693c0385af..9ba881ac30b 100644
--- a/tests/test_litellm/proxy/proxy_server/test_proxy_config.py
+++ b/tests/test_litellm/proxy/proxy_server/test_proxy_config.py
@@ -1245,6 +1245,25 @@ async def test_ProxyConfig_save_config_db_persists_environment_variables_when_op
     assert table.upserted_param_names == ["environment_variables"]
 
 
+@pytest.mark.asyncio
+async def test_ProxyConfig_save_config_persists_unchanged_environment_variables_when_opted_in(monkeypatch):
+    proxy_config, table = _db_backed_proxy_config(monkeypatch, {})
+    config: Final = {
+        "litellm_settings": {},
+        "environment_variables": {"OPENAI_API_KEY": "sk-explicit"},
+    }
+
+    await proxy_config.save_config(config)
+
+    assert table.rows == {}
+    assert table.upserted_param_names == []
+
+    await proxy_config.save_config(config, include_env_vars=True)
+
+    assert set(table.rows["environment_variables"]) == {"OPENAI_API_KEY"}
+    assert table.upserted_param_names == ["environment_variables"]
+
+
 def _install_fake_config_repo(monkeypatch, existing_row):
     """Route ProxyConfig's ConfigRepository through an in-memory fake that
     records the value written to the environment_variables row."""