diff --git a/doc/api/cli.md b/doc/api/cli.md
index e979ec95c4259d..8fe177a2cf0437 100644
--- a/doc/api/cli.md
+++ b/doc/api/cli.md
@@ -3903,6 +3903,25 @@ added: v7.1.0
 When set to `1`, instructs the module loader to preserve symbolic links when
 resolving and caching modules.
 
+### `NODE_PROXY_TUNNEL`
+
+<!-- YAML
+added: REPLACEME
+-->
+
+> Stability: 1.1 - Active Development
+
+When `NODE_USE_ENV_PROXY=1` or `--use-env-proxy` is enabled, controls whether
+proxy connections use the HTTP CONNECT tunneling method.
+
+When set to `true` or `1` (the default), undici uses CONNECT tunneling to establish
+a proxy connection. When set to `false` or `0`, undici uses direct HTTP forwarding
+instead, which may be required for proxies that do not support the CONNECT method.
+
+Valid values: `true`, `1`, `false`, `0`.
+
+See also [`NODE_USE_ENV_PROXY=1`][].
+
 ### `NODE_REDIRECT_WARNINGS=file`
 
 <!-- YAML
@@ -3978,7 +3997,8 @@ added:
 
 When enabled, Node.js parses the `HTTP_PROXY`, `HTTPS_PROXY` and `NO_PROXY`
 environment variables during startup, and tunnels requests over the
-specified proxy.
+specified proxy. Use [`NODE_PROXY_TUNNEL`][] to disable CONNECT tunneling
+for proxies that do not support it.
 
 This can also be enabled using the [`--use-env-proxy`][] command-line flag.
 When both are set, `--use-env-proxy` takes precedence.
@@ -4338,6 +4358,7 @@ node --stack-trace-limit=12 -p -e "Error.stackTraceLimit" # prints 12
 [`ERR_INVALID_TYPESCRIPT_SYNTAX`]: errors.md#err_invalid_typescript_syntax
 [`ERR_UNSUPPORTED_TYPESCRIPT_SYNTAX`]: errors.md#err_unsupported_typescript_syntax
 [`NODE_OPTIONS`]: #node_optionsoptions
+[`NODE_PROXY_TUNNEL`]: #node_proxy_tunnel
 [`NODE_USE_ENV_PROXY=1`]: #node_use_env_proxy1
 [`NO_COLOR`]: https://no-color.org
 [`Web Storage`]: https://developer.mozilla.org/en-US/docs/Web/API/Web_Storage_API
diff --git a/doc/api/http.md b/doc/api/http.md
index 8ac1ed166103b0..a22570a757e4bf 100644
--- a/doc/api/http.md
+++ b/doc/api/http.md
@@ -4515,6 +4515,13 @@ Or the `--use-env-proxy` flag.
 HTTP_PROXY=http://proxy.example.com:8080 NO_PROXY=localhost,127.0.0.1 node --use-env-proxy client.js
 ```
 
+If the proxy does not support the HTTP CONNECT method, set `NODE_PROXY_TUNNEL=false`
+to use direct HTTP forwarding instead:
+
+```console
+NODE_USE_ENV_PROXY=1 NODE_PROXY_TUNNEL=false HTTP_PROXY=http://proxy.example.com:8080 node client.js
+```
+
 To enable proxy support dynamically and globally with `process.env` (the default option of `http.setGlobalProxyFromEnv()`):
 
 ```cjs
diff --git a/doc/node.1 b/doc/node.1
index 2b1ee8d5f31679..72fe67ba20093e 100644
--- a/doc/node.1
+++ b/doc/node.1
@@ -2232,6 +2232,16 @@ for connections. This setting applies to Windows only.
 When set to \fB1\fR, instructs the module loader to preserve symbolic links when
 resolving and caching modules.
 .
+.It Ev NODE_PROXY_TUNNEL
+When \fBNODE_USE_ENV_PROXY=1\fR or \fB--use-env-proxy\fR is enabled, controls whether
+proxy connections use the HTTP CONNECT tunneling method.
+
+When set to \fBtrue\fR or \fB1\fR (the default), undici uses CONNECT tunneling to establish
+a proxy connection. When set to \fBfalse\fR or \fB0\fR, undici uses direct HTTP forwarding
+instead, which may be required for proxies that do not support the CONNECT method.
+
+Valid values: \fBtrue\fR, \fB1\fR, \fBfalse\fR, \fB0\fR.
+.
 .It Ev NODE_REDIRECT_WARNINGS Ar file
 When set, process warnings will be emitted to the given file instead of
 printing to stderr. The file will be created if it does not exist, and will be
diff --git a/lib/internal/process/pre_execution.js b/lib/internal/process/pre_execution.js
index 16a80c2d4f410f..da844539e3f634 100644
--- a/lib/internal/process/pre_execution.js
+++ b/lib/internal/process/pre_execution.js
@@ -206,7 +206,12 @@ function setupHttpProxy() {
   }
 
   const { setGlobalDispatcher, EnvHttpProxyAgent } = require('internal/deps/undici/undici');
-  const envHttpProxyAgent = new EnvHttpProxyAgent();
+  const envProxyTunnel = process.env.NODE_PROXY_TUNNEL;
+  let proxyTunnel;
+  if (envProxyTunnel !== undefined) {
+    proxyTunnel = envProxyTunnel === 'true' || envProxyTunnel === '1';
+  }
+  const envHttpProxyAgent = new EnvHttpProxyAgent({ proxyTunnel });
   setGlobalDispatcher(envHttpProxyAgent);
   // For fetch, we need to set the global dispatcher from here.
   // For http/https agents, we'll configure the global agent when they are
diff --git a/test/client-proxy/test-node-proxy-tunnel.mjs b/test/client-proxy/test-node-proxy-tunnel.mjs
new file mode 100644
index 00000000000000..c9d4a16933ca4f
--- /dev/null
+++ b/test/client-proxy/test-node-proxy-tunnel.mjs
@@ -0,0 +1,72 @@
+// Tests that NODE_PROXY_TUNNEL=false disables CONNECT tunneling
+// and uses direct HTTP forwarding instead.
+
+import * as common from '../common/index.mjs';
+import assert from 'node:assert';
+import http from 'node:http';
+import { once } from 'events';
+import { createProxyServer, checkProxiedFetch } from '../common/proxy-server.js';
+
+// Start a minimal proxy server.
+const { proxy, logs } = createProxyServer();
+proxy.listen(0);
+await once(proxy, 'listening');
+
+delete process.env.NODE_USE_ENV_PROXY; // Ensure the environment variable is not set.
+
+// Start a HTTP server to process the final request.
+const server = http.createServer(common.mustCall((req, res) => {
+  res.end('Hello world');
+}, 2));
+server.on('error', common.mustNotCall((err) => { console.error('Server error', err); }));
+server.listen(0);
+await once(server, 'listening');
+
+const serverHost = `localhost:${server.address().port}`;
+const requestUrl = `http://${serverHost}/test`;
+
+// Test: with NODE_PROXY_TUNNEL=false, fetch should NOT use CONNECT tunneling
+// but instead use direct HTTP forwarding.
+{
+  await checkProxiedFetch({
+    FETCH_URL: requestUrl,
+    HTTP_PROXY: `http://localhost:${proxy.address().port}`,
+    NODE_USE_ENV_PROXY: '1',
+    NODE_PROXY_TUNNEL: 'false',
+  }, {
+    stdout: 'Hello world',
+  });
+
+  // With proxyTunnel: false, undici uses Http1ProxyWrapper which rewrites
+  // the request path to include the origin (e.g. "localhost:PORT/test")
+  // and sends it as a normal GET request instead of CONNECT.
+  assert.strictEqual(logs[0].method, 'GET');
+  assert.strictEqual(logs[0].url, requestUrl);
+  assert.strictEqual(logs[0].headers.host, serverHost);
+}
+
+// Test: without NODE_PROXY_TUNNEL (default), fetch still uses CONNECT tunneling.
+{
+  logs.splice(0, logs.length);
+  await checkProxiedFetch({
+    FETCH_URL: requestUrl,
+    HTTP_PROXY: `http://localhost:${proxy.address().port}`,
+    NODE_USE_ENV_PROXY: '1',
+  }, {
+    stdout: 'Hello world',
+  });
+
+  // Without NODE_PROXY_TUNNEL set, CONNECT tunneling is used by default.
+  assert.deepStrictEqual(logs, [{
+    method: 'CONNECT',
+    url: serverHost,
+    headers: {
+      'connection': 'close',
+      'proxy-connection': 'keep-alive',
+      'host': serverHost,
+    },
+  }]);
+}
+
+server.close();
+proxy.close();