diff --git a/.envrc b/.envrc
index 1639dfc..1bb3edd 100644
--- a/.envrc
+++ b/.envrc
@@ -6,4 +6,7 @@ watch_file direnvrc
 # shellcheck disable=SC2046
 watch_file $(find . -name "*.nix")
 
+# This is not in shell.nix because accessing the working path requires impure eval
+export DIRENVRC="$PWD/direnvrc"
+
 use flake
diff --git a/README.md b/README.md
index 13f805f..655b436 100644
--- a/README.md
+++ b/README.md
@@ -250,7 +250,20 @@ This leads to some limitations in what we can reasonably parse.
 Currently, all single-word arguments and some well-known double arguments will
 be interpreted or passed along.
 
-#### Manual reload of the nix environment
+#### Fine-grained behavior control
+
+##### Disabling devShell fallback
+
+By default, nix-direnv will reload a previously working devShell if it discovers
+that a new verison does not evaluate. This can be disabled by calling
+`nix_direnv_disallow_fallback` in `.envrc`, like so:
+
+```shell
+nix_direnv_disallow_fallback
+use nix # or use flake
+```
+
+##### Manual reload of the nix environment
 
 To avoid delays and time consuming rebuilds at unexpected times, you can use
 nix-direnv in the "manual reload" mode. nix-direnv will then tell you when the
diff --git a/direnvrc b/direnvrc
index cad58f7..c68edf6 100644
--- a/direnvrc
+++ b/direnvrc
@@ -244,6 +244,12 @@ nix_direnv_manual_reload() {
   _nix_direnv_manual_reload=1
 }
 
+: "${_nix_direnv_allow_fallback:=1}"
+nix_direnv_disallow_fallback() {
+  _nix_direnv_info "Fallback disallowed"
+  _nix_direnv_allow_fallback=0
+}
+
 _nix_direnv_warn_manual_reload() {
   if [[ -e $1 ]]; then
     _nix_direnv_warning 'cache is out of date. use "nix-direnv-reload" to reload'
@@ -336,8 +342,12 @@ use_flake() {
         # but there is already a prior profile_rc,
         # which is probably more useful than nothing.
         # Fallback to use that (which means just leaving profile_rc alone!)
-        _nix_direnv_warning "Evaluating current devShell failed. Falling back to previous environment!"
-        export NIX_DIRENV_DID_FALLBACK=1
+        if [[ $_nix_direnv_allow_fallback -eq 1 ]]; then
+          _nix_direnv_warning "Evaluating current devShell failed. Falling back to previous environment!"
+          export NIX_DIRENV_DID_FALLBACK=1
+        else
+          return 1
+        fi
       fi
     fi
   else
@@ -493,8 +503,13 @@ use_nix() {
         rm -f "$tmp_profile" "$tmp_profile"*
         _nix_direnv_info "Renewed cache"
       else
-        _nix_direnv_warning "Evaluating current nix shell failed. Falling back to previous environment!"
-        export NIX_DIRENV_DID_FALLBACK=1
+        if [[ $_nix_direnv_allow_fallback -eq 1 ]]; then
+          _nix_direnv_warning "Evaluating current nix shell failed. Falling back to previous environment!"
+          export NIX_DIRENV_DID_FALLBACK=1
+        else
+          unset IN_NIX_SHELL
+          return 1
+        fi
       fi
     fi
   else
@@ -502,6 +517,7 @@ use_nix() {
       _nix_direnv_info "Using cached dev shell"
     else
       _nix_direnv_error "use_nix failed - Is your nix shell working?"
+      unset IN_NIX_SHELL
       return 1
     fi
   fi
diff --git a/shell.nix b/shell.nix
index 409fd63..1c7f3f8 100644
--- a/shell.nix
+++ b/shell.nix
@@ -9,7 +9,6 @@ let
 in
 pkgs.mkShell {
   DIRENV_STDLIB = "${test_pkgs.direnv-stdlib}";
-  DIRENVRC = "${nix-direnv}/share/nix-direnv/direnvrc";
   BATS_LIB_PATH = lib.strings.makeSearchPath "" (
     with test_pkgs;
     [
diff --git a/tests/default.nix b/tests/default.nix
index 77a7607..91e7830 100644
--- a/tests/default.nix
+++ b/tests/default.nix
@@ -7,6 +7,7 @@
   fetchurl,
   findutils,
   gnugrep,
+  gnused,
   lib,
   nix-direnv,
   nixVersions,
@@ -31,6 +32,7 @@ let
           coreutils
           findutils
           gnugrep
+          gnused
         ]
       }
       export DIRENV_STDLIB=${direnv-stdlib}
diff --git a/tests/test_fallback.bats b/tests/test_fallback.bats
new file mode 100644
index 0000000..29372b9
--- /dev/null
+++ b/tests/test_fallback.bats
@@ -0,0 +1,32 @@
+# -*- mode: bash-ts -*-
+
+function setup {
+  load "util"
+
+  _common_setup
+}
+
+function teardown {
+  _common_teardown
+}
+
+function test_fallback_allowed() { # @test
+  write_envrc "strict_env\nwatch_file shell.nix\nuse flake"
+  run_in_direnv 'hello'
+
+  sed -i.bk 's|inherit shellHook|inherit doesntExist|' "$TESTDIR/shell.nix"
+
+  run --separate-stderr direnv exec "$TESTDIR" "hello"
+  assert_stderr -p "Falling back to previous environment"
+
+}
+
+function test_fallback_disallowed() { # @test
+  write_envrc "strict_env\nwatch_file shell.nix\nnix_direnv_disallow_fallback\nuse flake"
+  run_in_direnv 'hello'
+
+  sed -i.bk 's|inherit shellHook|inherit doesntExist|' "$TESTDIR/shell.nix"
+
+  run --separate-stderr direnv exec "$TESTDIR" "hello"
+  refute_stderr -p "Falling back to previous environment"
+}