diff --git a/packages/cli/src/cli.ts b/packages/cli/src/cli.ts
index 04dec58..b33a219 100644
--- a/packages/cli/src/cli.ts
+++ b/packages/cli/src/cli.ts
@@ -23,6 +23,7 @@ import {
   writeJsonError,
   writeJsonSuccess,
 } from "./shell/output";
+import { canonicalizeWindowsPathKey } from "./shell/path-env";
 import { disposePromptState } from "./shell/prompt";
 import {
   type CliRuntime,
@@ -37,6 +38,10 @@ export interface RunCliOptions extends Partial<CliRuntime> {
 }
 
 export async function runCli(options: RunCliOptions = {}): Promise<number> {
+  // Normalize the Windows `Path` key before any command spawns a subprocess
+  // off process.env (see canonicalizeWindowsPathKey).
+  canonicalizeWindowsPathKey(process.env);
+
   const runtime = resolveRuntime(options);
   const program = createProgram(runtime);
   process.exitCode = 0;
diff --git a/packages/cli/src/shell/path-env.ts b/packages/cli/src/shell/path-env.ts
new file mode 100644
index 0000000..9a1e313
--- /dev/null
+++ b/packages/cli/src/shell/path-env.ts
@@ -0,0 +1,40 @@
+/**
+ * Collapses case-variant spellings of `PATH` into the canonical `PATH` key, in
+ * place. No-op outside Windows.
+ *
+ * Windows stores the variable as `Path` and resolves env lookups
+ * case-insensitively, so `process.env.PATH` reads it fine — but spreading
+ * `process.env` into a plain object drops that case-insensitivity. The compute
+ * SDK does exactly that to prepend `node_modules/.bin` for a local build, so
+ * its `PATH` read misses the inherited `Path`, truncating it until the spawned
+ * build can no longer resolve `bun`/`next`. Normalizing up front keeps the
+ * spread correct; the rename is invisible because Windows ignores the casing.
+ */
+export function canonicalizeWindowsPathKey(
+  env: NodeJS.ProcessEnv,
+  platform: NodeJS.Platform = process.platform,
+): void {
+  if (platform !== "win32") {
+    return;
+  }
+
+  const variants = Object.keys(env).filter(
+    (key) => key.toUpperCase() === "PATH" && key !== "PATH",
+  );
+  if (variants.length === 0) {
+    return;
+  }
+
+  // `env.PATH` resolves the canonical key and, on the real process.env, `Path`
+  // too; sort the remaining variants so the fallback never depends on key
+  // insertion order.
+  const value = env.PATH ?? env[[...variants].sort()[0]];
+  for (const variant of variants) {
+    delete env[variant];
+  }
+  // The deletes above also clear the case-insensitive `PATH` on the real
+  // process.env, so write the canonical key back.
+  if (value !== undefined) {
+    env.PATH = value;
+  }
+}
diff --git a/packages/cli/tests/path-env.integration.test.ts b/packages/cli/tests/path-env.integration.test.ts
new file mode 100644
index 0000000..1ff2e1c
--- /dev/null
+++ b/packages/cli/tests/path-env.integration.test.ts
@@ -0,0 +1,106 @@
+import { spawn } from "node:child_process";
+import { chmod, mkdir, mkdtemp, rm, writeFile } from "node:fs/promises";
+import os from "node:os";
+import path from "node:path";
+
+import { afterEach, beforeEach, describe, expect, it } from "vitest";
+
+import { canonicalizeWindowsPathKey } from "../src/shell/path-env";
+
+// Guards the whole chain the fix protects: process.env -> spread -> PATH
+// rewrite -> spawned child. The compute SDK builds its local-build subprocess
+// this way, so on Windows the truncated PATH left the spawned build unable to
+// find `bun`; here a real child must still resolve a binary on the inherited
+// path.
+
+const isWindows = process.platform === "win32";
+
+// Mirrors the compute SDK's `buildCommandEnv`: spread the inherited env, then
+// rebuild PATH with bin dirs prepended — the step that silently truncated PATH
+// when the inherited key was the Windows-native `Path`.
+function buildCommandEnvLikeSdk(
+  baseEnv: NodeJS.ProcessEnv,
+  binDirs: string[],
+): NodeJS.ProcessEnv {
+  const spread = { ...baseEnv };
+  return {
+    ...spread,
+    PATH: [...binDirs, spread.PATH].filter(Boolean).join(path.delimiter),
+  };
+}
+
+function runCommandInShell(
+  command: string,
+  env: NodeJS.ProcessEnv,
+  cwd: string,
+): Promise<{ code: number | null; stdout: string; stderr: string }> {
+  return new Promise((resolve, reject) => {
+    const child = spawn(command, [], { cwd, env, shell: true });
+    let stdout = "";
+    let stderr = "";
+    child.stdout.setEncoding("utf8");
+    child.stderr.setEncoding("utf8");
+    child.stdout.on("data", (chunk) => {
+      stdout += chunk;
+    });
+    child.stderr.on("data", (chunk) => {
+      stderr += chunk;
+    });
+    child.on("error", reject);
+    child.on("close", (code) => resolve({ code, stdout, stderr }));
+  });
+}
+
+describe("local build env resolves binaries (integration)", () => {
+  let workdir: string;
+  let binDir: string;
+  const binaryName = "faux-bun";
+
+  beforeEach(async () => {
+    workdir = await mkdtemp(path.join(os.tmpdir(), "prisma-path-env-"));
+    binDir = path.join(workdir, "tools");
+    await mkdir(binDir, { recursive: true });
+
+    if (isWindows) {
+      // A .cmd shim, as a real installer drops on Windows.
+      await writeFile(
+        path.join(binDir, `${binaryName}.cmd`),
+        "@echo faux-bun-ran\r\n",
+      );
+    } else {
+      const script = path.join(binDir, binaryName);
+      await writeFile(script, "#!/bin/sh\necho faux-bun-ran\n");
+      await chmod(script, 0o755);
+    }
+  });
+
+  afterEach(async () => {
+    await rm(workdir, { recursive: true, force: true });
+  });
+
+  it("spawns a child that finds a binary on the inherited path after the SDK-style rewrite", async () => {
+    // Put the binary dir on PATH under the OS-native key: `Path` on Windows
+    // (where the bug lives), canonical `PATH` elsewhere.
+    const baseEnv: NodeJS.ProcessEnv = { ...process.env };
+    const pathKey = isWindows ? "Path" : "PATH";
+    const existingPath = process.env.PATH ?? "";
+    delete baseEnv.PATH;
+    delete baseEnv.Path;
+    baseEnv[pathKey] = [binDir, existingPath]
+      .filter(Boolean)
+      .join(path.delimiter);
+
+    canonicalizeWindowsPathKey(baseEnv);
+
+    // Prepend an (empty) node_modules/.bin as the SDK does, forcing the PATH
+    // rewrite that dropped inherited entries in the reported failure.
+    const childEnv = buildCommandEnvLikeSdk(baseEnv, [
+      path.join(workdir, "node_modules", ".bin"),
+    ]);
+
+    const result = await runCommandInShell(binaryName, childEnv, workdir);
+
+    expect(result.stdout.trim()).toBe("faux-bun-ran");
+    expect(result.code).toBe(0);
+  });
+});
diff --git a/packages/cli/tests/path-env.test.ts b/packages/cli/tests/path-env.test.ts
new file mode 100644
index 0000000..fd3119f
--- /dev/null
+++ b/packages/cli/tests/path-env.test.ts
@@ -0,0 +1,85 @@
+import { describe, expect, it } from "vitest";
+
+import { canonicalizeWindowsPathKey } from "../src/shell/path-env";
+
+describe("canonicalizeWindowsPathKey", () => {
+  it("renames the Windows registry-cased Path key to PATH", () => {
+    const env: NodeJS.ProcessEnv = {
+      Path: "C:\\Windows\\System32;C:\\Users\\flo\\.bun\\bin",
+      ComSpec: "C:\\Windows\\System32\\cmd.exe",
+    };
+
+    canonicalizeWindowsPathKey(env, "win32");
+
+    expect(Object.keys(env).sort()).toEqual(["ComSpec", "PATH"]);
+    expect(env.PATH).toBe("C:\\Windows\\System32;C:\\Users\\flo\\.bun\\bin");
+  });
+
+  it("keeps a spread of the env readable and rewritable via env.PATH", () => {
+    // The reported failure mode: the compute SDK spreads process.env into a
+    // plain object and rebuilds PATH from `baseEnv.PATH`. With the Windows
+    // `Path` casing that read is undefined, so the rebuilt PATH loses every
+    // inherited entry and the spawned `bun run build` cannot find bun.
+    const env: NodeJS.ProcessEnv = { Path: "C:\\Users\\flo\\.bun\\bin" };
+
+    canonicalizeWindowsPathKey(env, "win32");
+    const spread = { ...env };
+
+    expect(spread.PATH).toBe("C:\\Users\\flo\\.bun\\bin");
+    expect(
+      Object.keys(spread).filter((key) => key.toUpperCase() === "PATH"),
+    ).toEqual(["PATH"]);
+  });
+
+  it("collapses multiple case variants without dropping the value", () => {
+    const env: NodeJS.ProcessEnv = {
+      path: "ignored",
+      PATH: "C:\\kept",
+    };
+
+    canonicalizeWindowsPathKey(env, "win32");
+
+    expect(env).toEqual({ PATH: "C:\\kept" });
+  });
+
+  it("picks the same variant regardless of insertion order", () => {
+    // Several non-canonical spellings and no `PATH`: the sorted fallback must
+    // pick deterministically rather than following Object.keys order. "PaTH"
+    // sorts before "path" (uppercase precedes lowercase), so it wins both ways.
+    const first: NodeJS.ProcessEnv = { path: "C:\\other", PaTH: "C:\\kept" };
+    const second: NodeJS.ProcessEnv = { PaTH: "C:\\kept", path: "C:\\other" };
+
+    canonicalizeWindowsPathKey(first, "win32");
+    canonicalizeWindowsPathKey(second, "win32");
+
+    expect(first).toEqual({ PATH: "C:\\kept" });
+    expect(second).toEqual({ PATH: "C:\\kept" });
+  });
+
+  it("leaves a canonical PATH untouched", () => {
+    const env: NodeJS.ProcessEnv = { PATH: "C:\\Windows\\System32" };
+
+    canonicalizeWindowsPathKey(env, "win32");
+
+    expect(env).toEqual({ PATH: "C:\\Windows\\System32" });
+  });
+
+  it("does nothing when no path variable exists", () => {
+    const env: NodeJS.ProcessEnv = { HOME: "C:\\Users\\flo" };
+
+    canonicalizeWindowsPathKey(env, "win32");
+
+    expect(env).toEqual({ HOME: "C:\\Users\\flo" });
+  });
+
+  it("is a no-op outside Windows, where casing is significant", () => {
+    const env: NodeJS.ProcessEnv = {
+      Path: "/opt/custom",
+      PATH: "/usr/bin:/bin",
+    };
+
+    canonicalizeWindowsPathKey(env, "linux");
+
+    expect(env).toEqual({ Path: "/opt/custom", PATH: "/usr/bin:/bin" });
+  });
+});