diff --git a/.kiro/specs/controller-peers-env-fallback/tasks.md b/.kiro/specs/controller-peers-env-fallback/tasks.md
index c441354f..7dd7f4b5 100644
--- a/.kiro/specs/controller-peers-env-fallback/tasks.md
+++ b/.kiro/specs/controller-peers-env-fallback/tasks.md
@@ -1,7 +1,7 @@
 # Implementation Plan
 
 - [ ] 1. Foundation: shared libxce primitives and the regression script
-- [ ] 1.1 Add the environment-variable reader for the default candidate list
+- [x] 1.1 Add the environment-variable reader for the default candidate list
   - Write the failing libxce unit tests first: variable unset gives no value, set to an empty string gives no value, set to a non-empty string returns it unchanged
   - Add the reader to the shared cluster module and declare it next to the existing peers parser, so every C daemon and the harness can call it with no new build dependency
   - Each test restores the variable to unset afterwards, so later libxce tests are unaffected
diff --git a/src/include/xce/cluster.h b/src/include/xce/cluster.h
index a0e6565c..c41585e5 100644
--- a/src/include/xce/cluster.h
+++ b/src/include/xce/cluster.h
@@ -137,6 +137,17 @@ void xce_reconnect_fini(xce_reconnect_ctx_t* rctx);
  */
 int xce_parse_peers(const char* peers_str, xce_cluster_config_t* cfg);
 
+/**
+ * xce_controller_peers_env() — default controller candidate list from the
+ * XCE_CONTROLLER_PEERS environment variable.
+ *
+ * Returns the variable's value unchanged (same format as --peers, not parsed
+ * here) when it is set and non-empty; NULL when it is unset or empty, so an
+ * empty value behaves exactly like an unset one.  The returned pointer is
+ * owned by the process environment; do not free or modify it.
+ */
+const char* xce_controller_peers_env(void);
+
 /* Test seam: set to non-NULL to override the real connect (unit tests only) */
 typedef void* (*xce_connect_fn_t)(const char* host, int port);
 void xce_cluster_set_connect_fn(xce_connect_fn_t fn);
diff --git a/src/lib/cluster.c b/src/lib/cluster.c
index 9568eee7..0d54e66b 100644
--- a/src/lib/cluster.c
+++ b/src/lib/cluster.c
@@ -59,6 +59,12 @@ int xce_parse_peers(const char* peers_str, xce_cluster_config_t* cfg)
     return cfg->candidates_count > 0 ? 0 : -1;
 }
 
+const char* xce_controller_peers_env(void)
+{
+    const char* v = getenv("XCE_CONTROLLER_PEERS");
+    return (v && v[0] != '\0') ? v : NULL;
+}
+
 /* ── Test seam ─────────────────────────────────────────────────── */
 
 static xce_connect_fn_t s_connect_fn = NULL;
diff --git a/src/lib/testsuite/test_cluster.c b/src/lib/testsuite/test_cluster.c
index 15985685..edbc77ad 100644
--- a/src/lib/testsuite/test_cluster.c
+++ b/src/lib/testsuite/test_cluster.c
@@ -1,5 +1,6 @@
 #include <errno.h>
 #include <stdio.h>
+#include <stdlib.h>
 #include <string.h>
 #include <unity/unity.h>
 
@@ -290,6 +291,41 @@ static void test_convert_does_not_set_identity_fields(void)
     printf("test_convert_does_not_set_identity_fields: PASS\n");
 }
 
+/* ── xce_controller_peers_env() ─────────────────────────────────── */
+
+/* Req 1.2/1.3: an unset variable supplies no candidate list. */
+static void test_peers_env_unset_returns_null(void)
+{
+    unsetenv("XCE_CONTROLLER_PEERS");
+    TEST_ASSERT_NULL(xce_controller_peers_env());
+    printf("test_peers_env_unset_returns_null: PASS\n");
+}
+
+/* Req 1.3/1.7: an empty variable is treated exactly like an unset one. */
+static void test_peers_env_empty_returns_null(void)
+{
+    TEST_ASSERT_EQUAL_INT(0, setenv("XCE_CONTROLLER_PEERS", "", 1));
+    const char* v = xce_controller_peers_env();
+    unsetenv("XCE_CONTROLLER_PEERS");
+    TEST_ASSERT_NULL(v);
+    printf("test_peers_env_empty_returns_null: PASS\n");
+}
+
+/* Req 1.2: a non-empty variable is returned unchanged (no parsing here). */
+static void test_peers_env_nonempty_returned_unchanged(void)
+{
+    const char* val = "c1=host1:9991,host2:9992";
+    TEST_ASSERT_EQUAL_INT(0, setenv("XCE_CONTROLLER_PEERS", val, 1));
+    const char* v    = xce_controller_peers_env();
+    char        copy[64] = "";
+    if (v)
+        snprintf(copy, sizeof(copy), "%s", v);
+    unsetenv("XCE_CONTROLLER_PEERS");
+    TEST_ASSERT_NOT_NULL(v);
+    TEST_ASSERT_EQUAL_STRING(val, copy);
+    printf("test_peers_env_nonempty_returned_unchanged: PASS\n");
+}
+
 /* ── Test group entry point ─────────────────────────────────────── */
 void test_cluster(void)
 {
@@ -310,4 +346,7 @@ void test_cluster(void)
     RUN_TEST(test_convert_rejects_zero_candidates);
     RUN_TEST(test_convert_truncates_over_max_candidates);
     RUN_TEST(test_convert_does_not_set_identity_fields);
+    RUN_TEST(test_peers_env_unset_returns_null);
+    RUN_TEST(test_peers_env_empty_returns_null);
+    RUN_TEST(test_peers_env_nonempty_returned_unchanged);
 }