diff --git a/CHANGELOG.md b/CHANGELOG.md
index 00f08f58..02bad5aa 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,6 +10,7 @@ project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 ### Fixed
 
 - An unquoted empty value followed by an inline comment (e.g. `KEY= # comment`) is now parsed as an empty string instead of the comment text by [@Noethix55555] in [#663]
+- `dotenv run --no-override` now expands variable references with the same precedence as `load_dotenv(override=False)`, so a value like `${BASE}/suffix` uses the existing `BASE` from the environment instead of the one from the `.env` file by [@ROTl24] in [#698]
 
 ## [1.2.3] - 2026-08-16
 
@@ -448,6 +449,7 @@ os.PathLike]` instead of just `os.PathLike` (#347 by [@bbc2]).
 [#640]: https://github.com/theskumar/python-dotenv/pull/640
 [#663]: https://github.com/theskumar/python-dotenv/pull/663
 [#680]: https://github.com/theskumar/python-dotenv/pull/680
+[#698]: https://github.com/theskumar/python-dotenv/pull/698
 [790c5c0]: https://github.com/theskumar/python-dotenv/commit/790c5c02991100aa1bf41ee5330aca75edc51311
 
 <!-- contributors -->
@@ -459,6 +461,7 @@ os.PathLike]` instead of just `os.PathLike` (#347 by [@bbc2]).
 [@Nougat-Waffle]: https://github.com/Nougat-Waffle
 [@Qwerty-133]: https://github.com/Qwerty-133
 [@ReinerBRO]: https://github.com/ReinerBRO
+[@ROTl24]: https://github.com/ROTl24
 [@alanjds]: https://github.com/alanjds
 [@altendky]: https://github.com/altendky
 [@andrewsmith]: https://github.com/andrewsmith
diff --git a/src/dotenv/cli.py b/src/dotenv/cli.py
index 79613e28..72c81816 100644
--- a/src/dotenv/cli.py
+++ b/src/dotenv/cli.py
@@ -17,7 +17,7 @@
     )
     sys.exit(1)
 
-from .main import dotenv_values, set_key, unset_key
+from .main import DotEnv, dotenv_values, set_key, unset_key
 from .version import __version__
 
 
@@ -190,7 +190,7 @@ def run(ctx: click.Context, override: bool, commandline: tuple[str, ...]) -> Non
         )
     dotenv_as_dict = {
         k: v
-        for (k, v) in dotenv_values(file).items()
+        for (k, v) in DotEnv(file, override=override, encoding="utf-8").dict().items()
         if v is not None and (override or k not in os.environ)
     }
 
diff --git a/tests/test_cli.py b/tests/test_cli.py
index d4e3ad4d..1a71db41 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -1,4 +1,5 @@
 import os
+import sys
 from pathlib import Path
 from typing import Optional
 
@@ -211,6 +212,40 @@ def test_run_with_existing_variable_not_overridden(tmp_path):
     check_process(result, exit_code=0, stdout="C\n")
 
 
+@pytest.mark.parametrize(
+    "option,existing_value,expected",
+    [
+        ("--override", "environment", "file\nfile/suffix\n"),
+        ("--no-override", "environment", "environment\nenvironment/suffix\n"),
+        ("--no-override", "", "\n/suffix\n"),
+    ],
+)
+def test_run_interpolation_respects_override(
+    tmp_path, option, existing_value, expected
+):
+    (tmp_path / ".env").write_text(
+        "DOTENV_TEST_BASE=file\nDOTENV_TEST_DERIVED=${DOTENV_TEST_BASE}/suffix\n"
+    )
+    env = dict(os.environ)
+    env.pop("DOTENV_TEST_DERIVED", None)
+    env["DOTENV_TEST_BASE"] = existing_value
+
+    result = run_dotenv(
+        [
+            "run",
+            option,
+            sys.executable,
+            "-c",
+            "import os; print(os.environ['DOTENV_TEST_BASE']); "
+            "print(os.environ['DOTENV_TEST_DERIVED'])",
+        ],
+        cwd=tmp_path,
+        env=env,
+    )
+
+    check_process(result, exit_code=0, stdout=expected)
+
+
 def test_run_with_none_value(tmp_path):
     (tmp_path / ".env").write_text("A=x\nc")