diff --git a/REFERENCE.md b/REFERENCE.md
index ca10ff34..61b839eb 100644
--- a/REFERENCE.md
+++ b/REFERENCE.md
@@ -29,6 +29,7 @@
 * [`peadm::file_or_content`](#peadm--file_or_content)
 * [`peadm::flatten_compact`](#peadm--flatten_compact)
 * [`peadm::generate_pe_conf`](#peadm--generate_pe_conf): Generate a pe.conf file in JSON format
+* [`peadm::get_node_group_environment`](#peadm--get_node_group_environment): check if a custom PE environment is set in pe.conf
 * [`peadm::get_pe_conf`](#peadm--get_pe_conf)
 * [`peadm::get_targets`](#peadm--get_targets): Accept undef or a SingleTargetSpec, and return an Array[Target, 1, 0]. This differs from get_target() in that:   - It returns an Array[Target
 * [`peadm::migration_opts_default`](#peadm--migration_opts_default)
@@ -109,7 +110,6 @@ Supported use cases:
 * `peadm::misc::divert_code_manager`: This plan exists to account for a scenario where a PE XL
 * `peadm::modify_cert_extensions`
 * `peadm::subplans::component_install`: Install a new PEADM component
-* `peadm::subplans::configure`: Configure first-time classification and DR setup
 * `peadm::subplans::db_populate`: Destructively (re)populates a new or existing database with the contents or a known good source
 * `peadm::subplans::install`: Perform initial installation of Puppet Enterprise Extra Large
 * `peadm::subplans::modify_certificate`
@@ -715,6 +715,24 @@ Data type: `Hash`
 A hash of settings to set in the config file. Any keys that are set to
 undef will not be included in the config file.
 
+### <a name="peadm--get_node_group_environment"></a>`peadm::get_node_group_environment`
+
+Type: Puppet Language
+
+check if a custom PE environment is set in pe.conf
+
+#### `peadm::get_node_group_environment(Target $primary)`
+
+The peadm::get_node_group_environment function.
+
+Returns: `Any`
+
+##### `primary`
+
+Data type: `Target`
+
+the FQDN for the primary, here we will read the pe.conf from
+
 ### <a name="peadm--get_pe_conf"></a>`peadm::get_pe_conf`
 
 Type: Puppet Language
@@ -1563,10 +1581,16 @@ The peadm::add_database class.
 
 The following parameters are available in the `peadm::add_database` plan:
 
+* [`node_group_environment`](#-peadm--add_database--node_group_environment)
 * [`targets`](#-peadm--add_database--targets)
 * [`primary_host`](#-peadm--add_database--primary_host)
 * [`mode`](#-peadm--add_database--mode)
 * [`begin_at_step`](#-peadm--add_database--begin_at_step)
+* [`environment_node_group`](#-peadm--add_database--environment_node_group)
+
+##### <a name="-peadm--add_database--node_group_environment"></a>`node_group_environment`
+
+environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
 
 ##### <a name="-peadm--add_database--targets"></a>`targets`
 
@@ -1606,6 +1630,14 @@ Optional[Enum[
 
 Default value: `undef`
 
+##### <a name="-peadm--add_database--environment_node_group"></a>`environment_node_group`
+
+Data type: `String[1]`
+
+
+
+Default value: `peadm::get_node_group_environment($primary_host)`
+
 ### <a name="peadm--backup"></a>`peadm::backup`
 
 Backup puppet primary configuration
@@ -1692,6 +1724,7 @@ management using PEAdm.
 
 The following parameters are available in the `peadm::convert` plan:
 
+* [`node_group_environment`](#-peadm--convert--node_group_environment)
 * [`primary_host`](#-peadm--convert--primary_host)
 * [`replica_host`](#-peadm--convert--replica_host)
 * [`compiler_hosts`](#-peadm--convert--compiler_hosts)
@@ -1702,6 +1735,11 @@ The following parameters are available in the `peadm::convert` plan:
 * [`internal_compiler_b_pool_address`](#-peadm--convert--internal_compiler_b_pool_address)
 * [`dns_alt_names`](#-peadm--convert--dns_alt_names)
 * [`begin_at_step`](#-peadm--convert--begin_at_step)
+* [`environment_node_group`](#-peadm--convert--environment_node_group)
+
+##### <a name="-peadm--convert--node_group_environment"></a>`node_group_environment`
+
+environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
 
 ##### <a name="-peadm--convert--primary_host"></a>`primary_host`
 
@@ -1789,6 +1827,14 @@ Optional[Enum[
 
 Default value: `undef`
 
+##### <a name="-peadm--convert--environment_node_group"></a>`environment_node_group`
+
+Data type: `String[1]`
+
+
+
+Default value: `peadm::get_node_group_environment($primary_host)`
+
 ### <a name="peadm--install"></a>`peadm::install`
 
 Install a new PE cluster
@@ -1805,6 +1851,7 @@ The following parameters are available in the `peadm::install` plan:
 * [`final_agent_state`](#-peadm--install--final_agent_state)
 * [`stagingdir`](#-peadm--install--stagingdir)
 * [`uploaddir`](#-peadm--install--uploaddir)
+* [`node_group_environment`](#-peadm--install--node_group_environment)
 * [`primary_host`](#-peadm--install--primary_host)
 * [`replica_host`](#-peadm--install--replica_host)
 * [`compiler_hosts`](#-peadm--install--compiler_hosts)
@@ -1825,6 +1872,7 @@ The following parameters are available in the `peadm::install` plan:
 * [`download_mode`](#-peadm--install--download_mode)
 * [`permit_unsafe_versions`](#-peadm--install--permit_unsafe_versions)
 * [`token_lifetime`](#-peadm--install--token_lifetime)
+* [`environment_node_group`](#-peadm--install--environment_node_group)
 
 ##### <a name="-peadm--install--compiler_pool_address"></a>`compiler_pool_address`
 
@@ -1904,6 +1952,10 @@ for offline usage.
 
 Default value: `undef`
 
+##### <a name="-peadm--install--node_group_environment"></a>`node_group_environment`
+
+environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+
 ##### <a name="-peadm--install--primary_host"></a>`primary_host`
 
 Data type: `Peadm::SingleTargetSpec`
@@ -2060,6 +2112,14 @@ Data type: `String`
 
 Default value: `'1y'`
 
+##### <a name="-peadm--install--environment_node_group"></a>`environment_node_group`
+
+Data type: `String[1]`
+
+
+
+Default value: `peadm::get_node_group_environment($primary_host)`
+
 ### <a name="peadm--modify_certificate"></a>`peadm::modify_certificate`
 
 Certificates can be modified by adding extensions, removing extensions, or
@@ -2277,6 +2337,7 @@ The following parameters are available in the `peadm::upgrade` plan:
 * [`r10k_known_hosts`](#-peadm--upgrade--r10k_known_hosts)
 * [`stagingdir`](#-peadm--upgrade--stagingdir)
 * [`uploaddir`](#-peadm--upgrade--uploaddir)
+* [`node_group_environment`](#-peadm--upgrade--node_group_environment)
 * [`primary_host`](#-peadm--upgrade--primary_host)
 * [`replica_host`](#-peadm--upgrade--replica_host)
 * [`compiler_hosts`](#-peadm--upgrade--compiler_hosts)
@@ -2287,6 +2348,7 @@ The following parameters are available in the `peadm::upgrade` plan:
 * [`download_mode`](#-peadm--upgrade--download_mode)
 * [`permit_unsafe_versions`](#-peadm--upgrade--permit_unsafe_versions)
 * [`begin_at_step`](#-peadm--upgrade--begin_at_step)
+* [`environment_node_group`](#-peadm--upgrade--environment_node_group)
 
 ##### <a name="-peadm--upgrade--compiler_pool_address"></a>`compiler_pool_address`
 
@@ -2366,6 +2428,10 @@ for offline usage.
 
 Default value: `'/tmp'`
 
+##### <a name="-peadm--upgrade--node_group_environment"></a>`node_group_environment`
+
+environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+
 ##### <a name="-peadm--upgrade--primary_host"></a>`primary_host`
 
 Data type: `Peadm::SingleTargetSpec`
@@ -2454,6 +2520,14 @@ Optional[Enum[
 
 Default value: `undef`
 
+##### <a name="-peadm--upgrade--environment_node_group"></a>`environment_node_group`
+
+Data type: `String[1]`
+
+
+
+Default value: `peadm::get_node_group_environment($primary_host)`
+
 ### <a name="peadm--util--init_db_server"></a>`peadm::util::init_db_server`
 
 The peadm::util::init_db_server class.
diff --git a/functions/get_node_group_environment.pp b/functions/get_node_group_environment.pp
new file mode 100644
index 00000000..daa2a8dd
--- /dev/null
+++ b/functions/get_node_group_environment.pp
@@ -0,0 +1,31 @@
+#
+# @summary check if a custom PE environment is set in pe.conf
+#
+# @param primary the FQDN for the primary, here we will read the pe.conf from
+#
+# @see https://www.puppet.com/docs/pe/latest/upgrade_pe#update_environment
+#
+# @author Tim Meusel <tim@bastelfreak.de>
+#
+function peadm::get_node_group_environment(Target $primary) {
+  $peconf = peadm::get_pe_conf($primary)
+  # if both are set, they need to be set to the same value
+  # if they are not set, we assume that the user runs their infra in production
+  $pe_install = $peconf['pe_install::install::classification::pe_node_group_environment']
+  $puppet_enterprise = $peconf['puppet_enterprise::master::recover_configuration::pe_environment']
+
+  # check if both are equal
+  # This also evaluates to true if both are undef
+  if $pe_install == $puppet_enterprise {
+    # check if the option isn't undef
+    # ToDo: A proper regex for allowed characters in an environment would be nice
+    # https://github.com/puppetlabs/puppet-docs/issues/1158
+    if $pe_install =~ String[1] {
+      return $pe_install
+    } else {
+      return 'production'
+    }
+  } else {
+    fail("pe_install::install::classification::pe_node_group_environment and puppet_enterprise::master::recover_configuration::pe_environment need to be set to the same value, not '${pe_install}' and ${puppet_enterprise}")
+  }
+}
diff --git a/manifests/setup/node_manager.pp b/manifests/setup/node_manager.pp
index 65c69044..d2fcdbe4 100644
--- a/manifests/setup/node_manager.pp
+++ b/manifests/setup/node_manager.pp
@@ -23,6 +23,7 @@
 #   A load balancer address directing traffic to any of the "B" pool
 #   compilers. This is used for DR configuration in large and extra large
 #   architectures.
+# @param node_group_environment the environment that will be assigned to all the PE Infra node groups
 #
 class peadm::setup::node_manager (
   String[1] $primary_host,
@@ -36,6 +37,7 @@
   Optional[String[1]] $compiler_pool_address            = undef,
   Optional[String[1]] $internal_compiler_a_pool_address = $server_a_host,
   Optional[String[1]] $internal_compiler_b_pool_address = $server_b_host,
+  String[1]           $node_group_environment           = 'production',
 ) {
   # "Not-configured" placeholder string. This will be used in places where we
   # cannot set an explicit null, and need to supply some kind of value.
@@ -46,6 +48,7 @@
   # else.
   Node_group {
     purge_behavior => none,
+    environment    => $node_group_environment,
   }
 
   ##################################################
diff --git a/plans/add_database.pp b/plans/add_database.pp
index 6219bde8..01b0aee0 100644
--- a/plans/add_database.pp
+++ b/plans/add_database.pp
@@ -1,3 +1,6 @@
+#
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 plan peadm::add_database(
   Peadm::SingleTargetSpec $targets,
   Peadm::SingleTargetSpec $primary_host,
@@ -9,6 +12,7 @@
       'update-db-settings',
       'cleanup-db',
   'finalize']] $begin_at_step = undef,
+  String[1] $environment_node_group = peadm::get_node_group_environment($primary_host),
 ) {
   $primary_target = peadm::get_targets($primary_host, 1)
   $postgresql_target = peadm::get_targets($targets, 1)
@@ -91,13 +95,13 @@
     run_plan('peadm::subplans::component_install', $postgresql_target,
       primary_host       => $primary_target,
       avail_group_letter => $avail_group_letter,
-      role               => 'puppet/puppetdb-database'
+      role               => 'puppet/puppetdb-database',
     )
   }
 
   # Stop Puppet to ensure catalogs are not being compiled for PE infrastructure nodes
   run_command('systemctl stop puppet.service', peadm::flatten_compact([
-        $postgresql_target,
+       $postgresql_target,
         $compilers,
         $primary_target,
         $replica_target,
@@ -128,15 +132,17 @@
       $host = pick($a_host, $b_host)
       out::verbose("In transitive state, setting classification to ${host}")
       run_plan('peadm::util::update_classification', $primary_target,
-        postgresql_a_host => $host,
-        postgresql_b_host => $host,
-        peadm_config      => $peadm_config
+        postgresql_a_host      => $host,
+        postgresql_b_host      => $host,
+        peadm_config           => $peadm_config,
+        environment_node_group => $environment_node_group,
       )
     } else {
       run_plan('peadm::util::update_classification', $primary_target,
-        postgresql_a_host => $avail_group_letter ? { 'A' => $postgresql_host, default => undef },
-        postgresql_b_host => $avail_group_letter ? { 'B' => $postgresql_host, default => undef },
-        peadm_config      => $peadm_config
+        postgresql_a_host      => $avail_group_letter ? { 'A' => $postgresql_host, default => undef },
+        postgresql_b_host      => $avail_group_letter ? { 'B' => $postgresql_host, default => undef },
+        peadm_config           => $peadm_config,
+        environment_node_group => $environment_node_group,
       )
     }
   }
diff --git a/plans/add_replica.pp b/plans/add_replica.pp
index 95bfb5e1..2395b6d3 100644
--- a/plans/add_replica.pp
+++ b/plans/add_replica.pp
@@ -9,7 +9,9 @@
 # @param replica_host - The hostname and certname of the replica VM
 # @param replica_postgresql_host - The hostname and certname of the host with the replica PE-PosgreSQL database.
 # @param token_file - (optional) the token file in a different location than the default.
-# 
+#
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 #   Can be a separate host in an XL architecture, or undef in Standard or Large.
 plan peadm::add_replica(
   # Standard or Large
@@ -21,6 +23,7 @@
 
   # Common Configuration
   Optional[String] $token_file = undef,
+  String[1] $environment_node_group = peadm::get_node_group_environment($primary_host),
 ) {
   $primary_target             = peadm::get_targets($primary_host, 1)
   $replica_target             = peadm::get_targets($replica_host, 1)
@@ -94,7 +97,8 @@
     server_b_host                    => $replica_avail_group_letter ? { 'B' => $replica_host, default => undef },
     internal_compiler_a_pool_address => $replica_avail_group_letter ? { 'A' => $replica_host, default => undef },
     internal_compiler_b_pool_address => $replica_avail_group_letter ? { 'B' => $replica_host, default => undef },
-    peadm_config                     => $peadm_config
+    peadm_config                     => $peadm_config,
+    environment_node_group           => $environment_node_group,
   )
 
   # Source list of files on Primary and synchronize to new Replica
diff --git a/plans/convert.pp b/plans/convert.pp
index 1995a0b0..6c40ac35 100644
--- a/plans/convert.pp
+++ b/plans/convert.pp
@@ -3,6 +3,9 @@
 # This plan sets required certificate extensions on PE nodes, and configures
 # the required PE node groups to make an existing cluster compatible with
 # management using PEAdm.
+#
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 plan peadm::convert (
   # Standard
   Peadm::SingleTargetSpec           $primary_host,
@@ -26,6 +29,8 @@
       'modify-infra-certs',
       'convert-node-groups',
   'finalize']] $begin_at_step = undef,
+
+  String[1] $environment_node_group = peadm::get_node_group_environment($primary_host),
 ) {
   peadm::assert_supported_bolt_version()
 
@@ -223,6 +228,7 @@
           compiler_pool_address            => $compiler_pool_address,
           internal_compiler_a_pool_address => $internal_compiler_a_pool_address,
           internal_compiler_b_pool_address => $internal_compiler_b_pool_address,
+          node_group_environment           => $node_group_environment,
           require                          => Class['peadm::setup::node_manager_yaml'],
         }
 
diff --git a/plans/install.pp b/plans/install.pp
index 4e7c9ab2..39a3e1f3 100644
--- a/plans/install.pp
+++ b/plans/install.pp
@@ -31,6 +31,8 @@
 #   Directory the installer tarball will be uploaded to or expected to be in
 #   for offline usage.
 #
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 plan peadm::install (
   # Standard
   Peadm::SingleTargetSpec           $primary_host,
@@ -73,6 +75,7 @@
   Enum['direct', 'bolthost'] $download_mode          = 'bolthost',
   Boolean                    $permit_unsafe_versions = false,
   String                     $token_lifetime         = '1y',
+  String[1] $environment_node_group = peadm::get_node_group_environment($primary_host),
 ) {
   peadm::assert_supported_bolt_version()
 
@@ -134,6 +137,7 @@
     internal_compiler_b_pool_address => $internal_compiler_b_pool_address,
     deploy_environment               => $deploy_environment,
     ldap_config                      => $ldap_config,
+    environment_node_group           => $environment_node_group,
 
     # Other
     stagingdir                       => $stagingdir,
diff --git a/plans/subplans/configure.pp b/plans/subplans/configure.pp
index bccc0503..4e9bd503 100644
--- a/plans/subplans/configure.pp
+++ b/plans/subplans/configure.pp
@@ -20,6 +20,8 @@
 #   Configures the state the puppet agent should be in on infrastructure nodes
 #   after PE is configured successfully.
 #
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 plan peadm::subplans::configure (
   # Standard
   Peadm::SingleTargetSpec           $primary_host,
@@ -43,6 +45,7 @@
   # Other
   String           $stagingdir                   = '/tmp',
   Enum['running', 'stopped'] $final_agent_state  = 'running'
+  String[1] $environment_node_group = peadm::get_node_group_environment($primary_host),
 ) {
   # TODO: get and validate PE version
 
@@ -102,6 +105,7 @@
       compiler_pool_address            => $compiler_pool_address,
       internal_compiler_a_pool_address => $internal_compiler_a_pool_address,
       internal_compiler_b_pool_address => $internal_compiler_b_pool_address,
+      environment_node_group           => $environment_node_group,
       require                          => Class['peadm::setup::node_manager_yaml'],
     }
   }
diff --git a/plans/upgrade.pp b/plans/upgrade.pp
index b9adcd38..456e98fa 100644
--- a/plans/upgrade.pp
+++ b/plans/upgrade.pp
@@ -31,6 +31,8 @@
 #   Directory the installer tarball will be uploaded to or expected to be in
 #   for offline usage.
 #
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 plan peadm::upgrade (
   # Standard
   Peadm::SingleTargetSpec           $primary_host,
@@ -66,6 +68,7 @@
       'upgrade-replica',
       'upgrade-replica-compilers',
   'finalize']] $begin_at_step = undef,
+  String[1] $environment_node_group = peadm::get_node_group_environment($primary_host),
 ) {
   # Ensure input valid for a supported architecture
   $arch = peadm::assert_supported_architecture(
@@ -326,6 +329,7 @@
         compiler_pool_address            => $compiler_pool_address,
         internal_compiler_a_pool_address => $internal_compiler_a_pool_address,
         internal_compiler_b_pool_address => $internal_compiler_b_pool_address,
+        environment_node_group           => $environment_node_group,
         require                          => Class['peadm::setup::node_manager_yaml'],
       }
     }
diff --git a/plans/util/update_classification.pp b/plans/util/update_classification.pp
index 247a9632..a59bf04d 100644
--- a/plans/util/update_classification.pp
+++ b/plans/util/update_classification.pp
@@ -2,9 +2,12 @@
 #
 # @summary Configure classification
 #
+# @param node_group_environment environment for the PEADM specific node groups, if not set it will be gathered from pe.conf or production
+#
 plan peadm::util::update_classification (
   # Standard
   Peadm::SingleTargetSpec           $targets,
+  String[1]                         $environment_node_group,
   Optional[Hash]                    $peadm_config = undef,
   Optional[Peadm::SingleTargetSpec] $server_a_host = undef,
   Optional[Peadm::SingleTargetSpec] $server_b_host = undef,
@@ -76,6 +79,7 @@
       compiler_pool_address            => $new['params']['compiler_pool_address'],
       internal_compiler_a_pool_address => $new['params']['internal_compiler_a_pool_address'],
       internal_compiler_b_pool_address => $new['params']['internal_compiler_b_pool_address'],
+      environment_node_group           => $environment_node_group,
       require                          => Class['peadm::setup::node_manager_yaml'],
     }
   }
diff --git a/spec/plans/convert_spec.rb b/spec/plans/convert_spec.rb
index 7140d598..23c8572f 100644
--- a/spec/plans/convert_spec.rb
+++ b/spec/plans/convert_spec.rb
@@ -19,7 +19,8 @@
     allow_apply
 
     expect_task('peadm::cert_data').return_for_targets('primary' => trustedjson)
-    expect_task('peadm::read_file').always_return({ 'content' => '2021.7.8' })
+    expect_task('peadm::read_file').with_params('path' => '/opt/puppetlabs/server/pe_build').always_return({ 'content' => '2021.7.8' })
+    expect_task('peadm::read_file').with_params('path' => '/etc/puppetlabs/enterprise/conf.d/pe.conf').always_return({ 'content' => {} })
 
     # For some reason, expect_plan() was not working??
     allow_plan('peadm::modify_certificate').always_return({})