diff --git a/cmd/podman/images/build.go b/cmd/podman/images/build.go
index 739e1c265453..beb994f1054e 100644
--- a/cmd/podman/images/build.go
+++ b/cmd/podman/images/build.go
@@ -115,6 +115,7 @@ func buildFlags(cmd *cobra.Command) {
 	// --layers flag
 	flag = layerFlags.Lookup("layers")
 	useLayersVal := useLayers()
+	buildOpts.Layers = useLayersVal == "true"
 	if err := flag.Value.Set(useLayersVal); err != nil {
 		logrus.Errorf("unable to set --layers to %v: %v", useLayersVal, err)
 	}
@@ -274,11 +275,7 @@ func buildFlagsWrapperToOptions(c *cobra.Command, contextDir string, flags *buil
 			}
 		}
 	}
-	// Check to see if the BUILDAH_LAYERS environment variable is set and
-	// override command-line.
-	if _, ok := os.LookupEnv("BUILDAH_LAYERS"); ok {
-		flags.Layers = true
-	}
+	flags.Layers = buildOpts.Layers
 
 	// `buildah bud --layers=false` acts like `docker build --squash` does.
 	// That is all of the new layers created during the build process are
diff --git a/test/system/070-build.bats b/test/system/070-build.bats
index 59da503a6e00..8e9a2d613445 100644
--- a/test/system/070-build.bats
+++ b/test/system/070-build.bats
@@ -381,6 +381,48 @@ a${random3}z"
     run_podman rmi -f build_test
 }
 
+@test "podman build --layers test" {
+    rand_content=$(random_string 50)
+    tmpdir=$PODMAN_TMPDIR/build-test
+    run mkdir -p $tmpdir
+    containerfile=$tmpdir/Containerfile
+    cat >$containerfile <<EOF
+FROM $IMAGE
+RUN echo $rand_content
+EOF
+
+    # Build twice to make sure second time uses cache
+    run_podman build -t build_test $tmpdir
+    if [[ "$output" =~ "Using cache" ]]; then
+        is "$output" "[no instance of 'Using cache']" "no cache used"
+    fi
+
+    run_podman build -t build_test $tmpdir
+    is "$output" ".*cache" "used cache"
+
+    run_podman build -t build_test --layers=true $tmpdir
+    is "$output" ".*cache" "used cache"
+
+    run_podman build -t build_test --layers=false $tmpdir
+    if [[ "$output" =~ "Using cache" ]]; then
+        is "$output" "[no instance of 'Using cache']" "no cache used"
+    fi
+
+    BUILDAH_LAYERS=false run_podman build -t build_test $tmpdir
+    if [[ "$output" =~ "Using cache" ]]; then
+        is "$output" "[no instance of 'Using cache']" "no cache used"
+    fi
+
+    BUILDAH_LAYERS=false run_podman build -t build_test --layers=1 $tmpdir
+    is "$output" ".*cache" "used cache"
+
+    BUILDAH_LAYERS=1 run_podman build -t build_test --layers=false $tmpdir
+    if [[ "$output" =~ "Using cache" ]]; then
+        is "$output" "[no instance of 'Using cache']" "no cache used"
+    fi
+
+    run_podman rmi -a --force
+}
 
 function teardown() {
     # A timeout or other error in 'build' can leave behind stale images