diff --git a/bake/bake.go b/bake/bake.go
index 423d074c..db03e05e 100644
--- a/bake/bake.go
+++ b/bake/bake.go
@@ -559,24 +559,24 @@ type Target struct {
 	Attest   []string `json:"attest,omitempty" hcl:"attest,optional" cty:"attest"`
 	Inherits []string `json:"inherits,omitempty" hcl:"inherits,optional" cty:"inherits"`
 
-	Context          *string           `json:"context,omitempty" hcl:"context,optional" cty:"context"`
-	Contexts         map[string]string `json:"contexts,omitempty" hcl:"contexts,optional" cty:"contexts"`
-	Dockerfile       *string           `json:"dockerfile,omitempty" hcl:"dockerfile,optional" cty:"dockerfile"`
-	DockerfileInline *string           `json:"dockerfile-inline,omitempty" hcl:"dockerfile-inline,optional" cty:"dockerfile-inline"`
-	Args             map[string]string `json:"args,omitempty" hcl:"args,optional" cty:"args"`
-	Labels           map[string]string `json:"labels,omitempty" hcl:"labels,optional" cty:"labels"`
-	Tags             []string          `json:"tags,omitempty" hcl:"tags,optional" cty:"tags"`
-	CacheFrom        []string          `json:"cache-from,omitempty"  hcl:"cache-from,optional" cty:"cache-from"`
-	CacheTo          []string          `json:"cache-to,omitempty"  hcl:"cache-to,optional" cty:"cache-to"`
-	Target           *string           `json:"target,omitempty" hcl:"target,optional" cty:"target"`
-	Secrets          []string          `json:"secret,omitempty" hcl:"secret,optional" cty:"secret"`
-	SSH              []string          `json:"ssh,omitempty" hcl:"ssh,optional" cty:"ssh"`
-	Platforms        []string          `json:"platforms,omitempty" hcl:"platforms,optional" cty:"platforms"`
-	Outputs          []string          `json:"output,omitempty" hcl:"output,optional" cty:"output"`
-	Pull             *bool             `json:"pull,omitempty" hcl:"pull,optional" cty:"pull"`
-	NoCache          *bool             `json:"no-cache,omitempty" hcl:"no-cache,optional" cty:"no-cache"`
-	NetworkMode      *string           `json:"-" hcl:"-" cty:"-"`
-	NoCacheFilter    []string          `json:"no-cache-filter,omitempty" hcl:"no-cache-filter,optional" cty:"no-cache-filter"`
+	Context          *string            `json:"context,omitempty" hcl:"context,optional" cty:"context"`
+	Contexts         map[string]string  `json:"contexts,omitempty" hcl:"contexts,optional" cty:"contexts"`
+	Dockerfile       *string            `json:"dockerfile,omitempty" hcl:"dockerfile,optional" cty:"dockerfile"`
+	DockerfileInline *string            `json:"dockerfile-inline,omitempty" hcl:"dockerfile-inline,optional" cty:"dockerfile-inline"`
+	Args             map[string]*string `json:"args,omitempty" hcl:"args,optional" cty:"args"`
+	Labels           map[string]string  `json:"labels,omitempty" hcl:"labels,optional" cty:"labels"`
+	Tags             []string           `json:"tags,omitempty" hcl:"tags,optional" cty:"tags"`
+	CacheFrom        []string           `json:"cache-from,omitempty"  hcl:"cache-from,optional" cty:"cache-from"`
+	CacheTo          []string           `json:"cache-to,omitempty"  hcl:"cache-to,optional" cty:"cache-to"`
+	Target           *string            `json:"target,omitempty" hcl:"target,optional" cty:"target"`
+	Secrets          []string           `json:"secret,omitempty" hcl:"secret,optional" cty:"secret"`
+	SSH              []string           `json:"ssh,omitempty" hcl:"ssh,optional" cty:"ssh"`
+	Platforms        []string           `json:"platforms,omitempty" hcl:"platforms,optional" cty:"platforms"`
+	Outputs          []string           `json:"output,omitempty" hcl:"output,optional" cty:"output"`
+	Pull             *bool              `json:"pull,omitempty" hcl:"pull,optional" cty:"pull"`
+	NoCache          *bool              `json:"no-cache,omitempty" hcl:"no-cache,optional" cty:"no-cache"`
+	NetworkMode      *string            `json:"-" hcl:"-" cty:"-"`
+	NoCacheFilter    []string           `json:"no-cache-filter,omitempty" hcl:"no-cache-filter,optional" cty:"no-cache-filter"`
 	// IMPORTANT: if you add more fields here, do not forget to update newOverrides and docs/manuals/bake/file-definition.md.
 
 	// linked is a private field to mark a target used as a linked one
@@ -615,8 +615,11 @@ func (t *Target) Merge(t2 *Target) {
 		t.DockerfileInline = t2.DockerfileInline
 	}
 	for k, v := range t2.Args {
+		if v == nil {
+			continue
+		}
 		if t.Args == nil {
-			t.Args = map[string]string{}
+			t.Args = map[string]*string{}
 		}
 		t.Args[k] = v
 	}
@@ -688,9 +691,9 @@ func (t *Target) AddOverrides(overrides map[string]Override) error {
 				return errors.Errorf("args require name")
 			}
 			if t.Args == nil {
-				t.Args = map[string]string{}
+				t.Args = map[string]*string{}
 			}
-			t.Args[keys[1]] = value
+			t.Args[keys[1]] = &value
 		case "contexts":
 			if len(keys) != 2 {
 				return errors.Errorf("contexts require name")
@@ -882,6 +885,14 @@ func toBuildOpt(t *Target, inp *Input) (*build.Options, error) {
 		dockerfilePath = path.Join(contextPath, dockerfilePath)
 	}
 
+	args := map[string]string{}
+	for k, v := range t.Args {
+		if v == nil {
+			continue
+		}
+		args[k] = *v
+	}
+
 	noCache := false
 	if t.NoCache != nil {
 		noCache = *t.NoCache
@@ -922,7 +933,7 @@ func toBuildOpt(t *Target, inp *Input) (*build.Options, error) {
 	bo := &build.Options{
 		Inputs:        bi,
 		Tags:          t.Tags,
-		BuildArgs:     t.Args,
+		BuildArgs:     args,
 		Labels:        t.Labels,
 		NoCache:       noCache,
 		NoCacheFilter: t.NoCacheFilter,
diff --git a/bake/bake_test.go b/bake/bake_test.go
index be9052a6..50950814 100644
--- a/bake/bake_test.go
+++ b/bake/bake_test.go
@@ -2,7 +2,6 @@ package bake
 
 import (
 	"context"
-	"os"
 	"sort"
 	"strings"
 	"testing"
@@ -42,7 +41,7 @@ target "webapp" {
 
 		require.Equal(t, "Dockerfile.webapp", *m["webapp"].Dockerfile)
 		require.Equal(t, ".", *m["webapp"].Context)
-		require.Equal(t, "webDEP", m["webapp"].Args["VAR_INHERITED"])
+		require.Equal(t, ptrstr("webDEP"), m["webapp"].Args["VAR_INHERITED"])
 		require.Equal(t, true, *m["webapp"].NoCache)
 		require.Nil(t, m["webapp"].Pull)
 
@@ -58,8 +57,7 @@ target "webapp" {
 
 	t.Run("ArgsOverrides", func(t *testing.T) {
 		t.Run("leaf", func(t *testing.T) {
-			os.Setenv("VAR_FROMENV"+t.Name(), "fromEnv")
-			defer os.Unsetenv("VAR_FROM_ENV" + t.Name())
+			t.Setenv("VAR_FROMENV"+t.Name(), "fromEnv")
 
 			m, g, err := ReadTargets(ctx, []File{fp}, []string{"webapp"}, []string{
 				"webapp.args.VAR_UNSET",
@@ -80,12 +78,12 @@ target "webapp" {
 			_, isSet = m["webapp"].Args["VAR_EMPTY"]
 			require.True(t, isSet, m["webapp"].Args["VAR_EMPTY"])
 
-			require.Equal(t, m["webapp"].Args["VAR_SET"], "bananas")
+			require.Equal(t, ptrstr("bananas"), m["webapp"].Args["VAR_SET"])
 
-			require.Equal(t, m["webapp"].Args["VAR_FROMENV"+t.Name()], "fromEnv")
+			require.Equal(t, ptrstr("fromEnv"), m["webapp"].Args["VAR_FROMENV"+t.Name()])
 
-			require.Equal(t, m["webapp"].Args["VAR_BOTH"], "webapp")
-			require.Equal(t, m["webapp"].Args["VAR_INHERITED"], "override")
+			require.Equal(t, ptrstr("webapp"), m["webapp"].Args["VAR_BOTH"])
+			require.Equal(t, ptrstr("override"), m["webapp"].Args["VAR_INHERITED"])
 
 			require.Equal(t, 1, len(g))
 			require.Equal(t, []string{"webapp"}, g["default"].Targets)
@@ -99,8 +97,8 @@ target "webapp" {
 			}, nil)
 
 			require.NoError(t, err)
-			require.Equal(t, m["webapp"].Args["VAR_INHERITED"], "override")
-			require.Equal(t, m["webapp"].Args["VAR_BOTH"], "webapp")
+			require.Equal(t, ptrstr("override"), m["webapp"].Args["VAR_INHERITED"])
+			require.Equal(t, ptrstr("webapp"), m["webapp"].Args["VAR_BOTH"])
 			require.Equal(t, 1, len(g))
 			require.Equal(t, []string{"webapp"}, g["default"].Targets)
 		})
@@ -139,9 +137,9 @@ target "webapp" {
 			require.NoError(t, err)
 			require.Equal(t, 2, len(m))
 			require.Equal(t, "foo", *m["webapp"].Dockerfile)
-			require.Equal(t, "webDEP", m["webapp"].Args["VAR_INHERITED"])
+			require.Equal(t, ptrstr("webDEP"), m["webapp"].Args["VAR_INHERITED"])
 			require.Equal(t, "foo", *m["webDEP"].Dockerfile)
-			require.Equal(t, "webDEP", m["webDEP"].Args["VAR_INHERITED"])
+			require.Equal(t, ptrstr("webDEP"), m["webDEP"].Args["VAR_INHERITED"])
 			require.Equal(t, 1, len(g))
 			sort.Strings(g["default"].Targets)
 			require.Equal(t, []string{"webDEP", "webapp"}, g["default"].Targets)
@@ -173,7 +171,7 @@ target "webapp" {
 					require.NoError(t, err)
 					require.Equal(t, 1, len(m))
 					require.Equal(t, "foo", *m["webapp"].Dockerfile)
-					require.Equal(t, "webDEP", m["webapp"].Args["VAR_INHERITED"])
+					require.Equal(t, ptrstr("webDEP"), m["webapp"].Args["VAR_INHERITED"])
 					require.Equal(t, 1, len(g))
 					require.Equal(t, []string{"webapp"}, g["default"].Targets)
 				},
@@ -300,8 +298,8 @@ services:
 	require.True(t, ok)
 	require.Equal(t, "Dockerfile.webapp", *m["webapp"].Dockerfile)
 	require.Equal(t, ".", *m["webapp"].Context)
-	require.Equal(t, "1", m["webapp"].Args["buildno"])
-	require.Equal(t, "12", m["webapp"].Args["buildno2"])
+	require.Equal(t, ptrstr("1"), m["webapp"].Args["buildno"])
+	require.Equal(t, ptrstr("12"), m["webapp"].Args["buildno2"])
 
 	require.Equal(t, 1, len(g))
 	sort.Strings(g["default"].Targets)
@@ -344,7 +342,7 @@ services:
 	_, ok := m["web_app"]
 	require.True(t, ok)
 	require.Equal(t, "Dockerfile.webapp", *m["web_app"].Dockerfile)
-	require.Equal(t, "1", m["web_app"].Args["buildno"])
+	require.Equal(t, ptrstr("1"), m["web_app"].Args["buildno"])
 
 	m, _, err = ReadTargets(ctx, []File{fp2}, []string{"web_app"}, nil, nil)
 	require.NoError(t, err)
@@ -352,7 +350,7 @@ services:
 	_, ok = m["web_app"]
 	require.True(t, ok)
 	require.Equal(t, "Dockerfile", *m["web_app"].Dockerfile)
-	require.Equal(t, "12", m["web_app"].Args["buildno2"])
+	require.Equal(t, ptrstr("12"), m["web_app"].Args["buildno2"])
 
 	m, g, err := ReadTargets(ctx, []File{fp, fp2}, []string{"default"}, nil, nil)
 	require.NoError(t, err)
@@ -361,8 +359,8 @@ services:
 	require.True(t, ok)
 	require.Equal(t, "Dockerfile.webapp", *m["web_app"].Dockerfile)
 	require.Equal(t, ".", *m["web_app"].Context)
-	require.Equal(t, "1", m["web_app"].Args["buildno"])
-	require.Equal(t, "12", m["web_app"].Args["buildno2"])
+	require.Equal(t, ptrstr("1"), m["web_app"].Args["buildno"])
+	require.Equal(t, ptrstr("12"), m["web_app"].Args["buildno2"])
 
 	require.Equal(t, 1, len(g))
 	sort.Strings(g["default"].Targets)
@@ -999,22 +997,22 @@ target "d" {
 	cases := []struct {
 		name      string
 		overrides []string
-		want      map[string]string
+		want      map[string]*string
 	}{
 		{
 			name:      "nested simple",
 			overrides: nil,
-			want:      map[string]string{"bar": "234", "baz": "890", "foo": "123"},
+			want:      map[string]*string{"bar": ptrstr("234"), "baz": ptrstr("890"), "foo": ptrstr("123")},
 		},
 		{
 			name:      "nested with overrides first",
 			overrides: []string{"a.args.foo=321", "b.args.bar=432"},
-			want:      map[string]string{"bar": "234", "baz": "890", "foo": "321"},
+			want:      map[string]*string{"bar": ptrstr("234"), "baz": ptrstr("890"), "foo": ptrstr("321")},
 		},
 		{
 			name:      "nested with overrides last",
 			overrides: []string{"a.args.foo=321", "c.args.bar=432"},
-			want:      map[string]string{"bar": "432", "baz": "890", "foo": "321"},
+			want:      map[string]*string{"bar": ptrstr("432"), "baz": ptrstr("890"), "foo": ptrstr("321")},
 		},
 	}
 	for _, tt := range cases {
@@ -1067,26 +1065,26 @@ group "default" {
 	cases := []struct {
 		name      string
 		overrides []string
-		wantch1   map[string]string
-		wantch2   map[string]string
+		wantch1   map[string]*string
+		wantch2   map[string]*string
 	}{
 		{
 			name:      "nested simple",
 			overrides: nil,
-			wantch1:   map[string]string{"BAR": "fuu", "FOO": "bar"},
-			wantch2:   map[string]string{"BAR": "fuu", "FOO": "bar", "FOO2": "bar2"},
+			wantch1:   map[string]*string{"BAR": ptrstr("fuu"), "FOO": ptrstr("bar")},
+			wantch2:   map[string]*string{"BAR": ptrstr("fuu"), "FOO": ptrstr("bar"), "FOO2": ptrstr("bar2")},
 		},
 		{
 			name:      "nested with overrides first",
 			overrides: []string{"grandparent.args.BAR=fii", "child1.args.FOO=baaar"},
-			wantch1:   map[string]string{"BAR": "fii", "FOO": "baaar"},
-			wantch2:   map[string]string{"BAR": "fii", "FOO": "bar", "FOO2": "bar2"},
+			wantch1:   map[string]*string{"BAR": ptrstr("fii"), "FOO": ptrstr("baaar")},
+			wantch2:   map[string]*string{"BAR": ptrstr("fii"), "FOO": ptrstr("bar"), "FOO2": ptrstr("bar2")},
 		},
 		{
 			name:      "nested with overrides last",
 			overrides: []string{"grandparent.args.BAR=fii", "child2.args.FOO=baaar"},
-			wantch1:   map[string]string{"BAR": "fii", "FOO": "bar"},
-			wantch2:   map[string]string{"BAR": "fii", "FOO": "baaar", "FOO2": "bar2"},
+			wantch1:   map[string]*string{"BAR": ptrstr("fii"), "FOO": ptrstr("bar")},
+			wantch2:   map[string]*string{"BAR": ptrstr("fii"), "FOO": ptrstr("baaar"), "FOO2": ptrstr("bar2")},
 		},
 	}
 	for _, tt := range cases {
@@ -1285,8 +1283,70 @@ services:
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, "app", c.Targets[0].Name)
-	require.Equal(t, "foo", c.Targets[0].Args["v1"])
-	require.Equal(t, "bar", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("foo"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("bar"), c.Targets[0].Args["v2"])
 	require.Equal(t, "dir", *c.Targets[0].Context)
 	require.Equal(t, "Dockerfile-alternate", *c.Targets[0].Dockerfile)
 }
+
+func TestHCLNullVars(t *testing.T) {
+	fp := File{
+		Name: "docker-bake.hcl",
+		Data: []byte(
+			`variable "FOO" {
+				default = null
+			}
+			target "default" {
+				args = {
+					foo = FOO
+					bar = "baz"
+				}
+			}`),
+	}
+
+	ctx := context.TODO()
+	m, _, err := ReadTargets(ctx, []File{fp}, []string{"default"}, nil, nil)
+	require.NoError(t, err)
+
+	require.Equal(t, 1, len(m))
+	_, ok := m["default"]
+	require.True(t, ok)
+
+	_, err = TargetsToBuildOpt(m, &Input{})
+	require.NoError(t, err)
+	require.Equal(t, map[string]*string{"bar": ptrstr("baz")}, m["default"].Args)
+}
+
+func TestJSONNullVars(t *testing.T) {
+	fp := File{
+		Name: "docker-bake.json",
+		Data: []byte(
+			`{
+				"variable": {
+					"FOO": {
+						"default": null
+					}
+				},
+				"target": {
+					"default": {
+						"args": {
+							"foo": "${FOO}",
+							"bar": "baz"
+						}
+					}
+				}
+			}`),
+	}
+
+	ctx := context.TODO()
+	m, _, err := ReadTargets(ctx, []File{fp}, []string{"default"}, nil, nil)
+	require.NoError(t, err)
+
+	require.Equal(t, 1, len(m))
+	_, ok := m["default"]
+	require.True(t, ok)
+
+	_, err = TargetsToBuildOpt(m, &Input{})
+	require.NoError(t, err)
+	require.Equal(t, map[string]*string{"bar": ptrstr("baz")}, m["default"].Args)
+}
diff --git a/bake/compose.go b/bake/compose.go
index 341f4e97..ea8eab65 100644
--- a/bake/compose.go
+++ b/bake/compose.go
@@ -193,16 +193,16 @@ func loadDotEnv(curenv map[string]string, workingDir string) (map[string]string,
 	return curenv, nil
 }
 
-func flatten(in compose.MappingWithEquals) compose.Mapping {
+func flatten(in compose.MappingWithEquals) map[string]*string {
 	if len(in) == 0 {
 		return nil
 	}
-	out := compose.Mapping{}
+	out := map[string]*string{}
 	for k, v := range in {
 		if v == nil {
 			continue
 		}
-		out[k] = *v
+		out[k] = v
 	}
 	return out
 }
diff --git a/bake/compose_test.go b/bake/compose_test.go
index d62f14a7..537065a5 100644
--- a/bake/compose_test.go
+++ b/bake/compose_test.go
@@ -60,7 +60,7 @@ secrets:
 	require.Equal(t, "./dir", *c.Targets[1].Context)
 	require.Equal(t, "Dockerfile-alternate", *c.Targets[1].Dockerfile)
 	require.Equal(t, 1, len(c.Targets[1].Args))
-	require.Equal(t, "123", c.Targets[1].Args["buildno"])
+	require.Equal(t, ptrstr("123"), c.Targets[1].Args["buildno"])
 	require.Equal(t, []string{"type=local,src=path/to/cache"}, c.Targets[1].CacheFrom)
 	require.Equal(t, []string{"type=local,dest=path/to/cache"}, c.Targets[1].CacheTo)
 	require.Equal(t, "none", *c.Targets[1].NetworkMode)
@@ -149,18 +149,15 @@ services:
         BRB: FOO
 `)
 
-	os.Setenv("FOO", "bar")
-	defer os.Unsetenv("FOO")
-	os.Setenv("BAR", "foo")
-	defer os.Unsetenv("BAR")
-	os.Setenv("ZZZ_BAR", "zzz_foo")
-	defer os.Unsetenv("ZZZ_BAR")
+	t.Setenv("FOO", "bar")
+	t.Setenv("BAR", "foo")
+	t.Setenv("ZZZ_BAR", "zzz_foo")
 
 	c, err := ParseCompose([]compose.ConfigFile{{Content: dt}}, sliceToMap(os.Environ()))
 	require.NoError(t, err)
-	require.Equal(t, "bar", c.Targets[0].Args["FOO"])
-	require.Equal(t, "zzz_foo", c.Targets[0].Args["BAR"])
-	require.Equal(t, "FOO", c.Targets[0].Args["BRB"])
+	require.Equal(t, ptrstr("bar"), c.Targets[0].Args["FOO"])
+	require.Equal(t, ptrstr("zzz_foo"), c.Targets[0].Args["BAR"])
+	require.Equal(t, ptrstr("FOO"), c.Targets[0].Args["BRB"])
 }
 
 func TestInconsistentComposeFile(t *testing.T) {
@@ -308,7 +305,7 @@ services:
 	sort.Slice(c.Targets, func(i, j int) bool {
 		return c.Targets[i].Name < c.Targets[j].Name
 	})
-	require.Equal(t, map[string]string{"CT_ECR": "foo", "CT_TAG": "bar"}, c.Targets[0].Args)
+	require.Equal(t, map[string]*string{"CT_ECR": ptrstr("foo"), "CT_TAG": ptrstr("bar")}, c.Targets[0].Args)
 	require.Equal(t, []string{"ct-addon:baz", "ct-addon:foo", "ct-addon:alp"}, c.Targets[0].Tags)
 	require.Equal(t, []string{"linux/amd64", "linux/arm64"}, c.Targets[0].Platforms)
 	require.Equal(t, []string{"user/app:cache", "type=local,src=path/to/cache"}, c.Targets[0].CacheFrom)
@@ -381,7 +378,7 @@ services:
 
 	c, err := ParseCompose([]compose.ConfigFile{{Content: dt}}, nil)
 	require.NoError(t, err)
-	require.Equal(t, map[string]string{"CT_ECR": "foo", "FOO": "bsdf -csdf", "NODE_ENV": "test"}, c.Targets[0].Args)
+	require.Equal(t, map[string]*string{"CT_ECR": ptrstr("foo"), "FOO": ptrstr("bsdf -csdf"), "NODE_ENV": ptrstr("test")}, c.Targets[0].Args)
 }
 
 func TestDotEnv(t *testing.T) {
@@ -405,7 +402,7 @@ services:
 		Data: dt,
 	}})
 	require.NoError(t, err)
-	require.Equal(t, map[string]string{"FOO": "bar"}, c.Targets[0].Args)
+	require.Equal(t, map[string]*string{"FOO": ptrstr("bar")}, c.Targets[0].Args)
 }
 
 func TestPorts(t *testing.T) {
@@ -629,6 +626,22 @@ target "default" {
 	}
 }
 
+func TestComposeNullArgs(t *testing.T) {
+	var dt = []byte(`
+services:
+  scratch:
+    build:
+     context: .
+     args:
+        FOO: null
+        bar: "baz"
+`)
+
+	c, err := ParseCompose([]compose.ConfigFile{{Content: dt}}, nil)
+	require.NoError(t, err)
+	require.Equal(t, map[string]*string{"bar": ptrstr("baz")}, c.Targets[0].Args)
+}
+
 // chdir changes the current working directory to the named directory,
 // and then restore the original working directory at the end of the test.
 func chdir(t *testing.T, dir string) {
diff --git a/bake/hcl_test.go b/bake/hcl_test.go
index 74c212d8..6d6fda0e 100644
--- a/bake/hcl_test.go
+++ b/bake/hcl_test.go
@@ -1,7 +1,7 @@
 package bake
 
 import (
-	"os"
+	"reflect"
 	"testing"
 
 	"github.com/stretchr/testify/require"
@@ -54,7 +54,7 @@ func TestHCLBasic(t *testing.T) {
 
 	require.Equal(t, c.Targets[1].Name, "webapp")
 	require.Equal(t, 1, len(c.Targets[1].Args))
-	require.Equal(t, "123", c.Targets[1].Args["buildno"])
+	require.Equal(t, ptrstr("123"), c.Targets[1].Args["buildno"])
 
 	require.Equal(t, c.Targets[2].Name, "cross")
 	require.Equal(t, 2, len(c.Targets[2].Platforms))
@@ -62,7 +62,7 @@ func TestHCLBasic(t *testing.T) {
 
 	require.Equal(t, c.Targets[3].Name, "webapp-plus")
 	require.Equal(t, 1, len(c.Targets[3].Args))
-	require.Equal(t, map[string]string{"IAMCROSS": "true"}, c.Targets[3].Args)
+	require.Equal(t, map[string]*string{"IAMCROSS": ptrstr("true")}, c.Targets[3].Args)
 }
 
 func TestHCLBasicInJSON(t *testing.T) {
@@ -114,7 +114,7 @@ func TestHCLBasicInJSON(t *testing.T) {
 
 	require.Equal(t, c.Targets[1].Name, "webapp")
 	require.Equal(t, 1, len(c.Targets[1].Args))
-	require.Equal(t, "123", c.Targets[1].Args["buildno"])
+	require.Equal(t, ptrstr("123"), c.Targets[1].Args["buildno"])
 
 	require.Equal(t, c.Targets[2].Name, "cross")
 	require.Equal(t, 2, len(c.Targets[2].Platforms))
@@ -122,7 +122,7 @@ func TestHCLBasicInJSON(t *testing.T) {
 
 	require.Equal(t, c.Targets[3].Name, "webapp-plus")
 	require.Equal(t, 1, len(c.Targets[3].Args))
-	require.Equal(t, map[string]string{"IAMCROSS": "true"}, c.Targets[3].Args)
+	require.Equal(t, map[string]*string{"IAMCROSS": ptrstr("true")}, c.Targets[3].Args)
 }
 
 func TestHCLWithFunctions(t *testing.T) {
@@ -147,7 +147,7 @@ func TestHCLWithFunctions(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "webapp")
-	require.Equal(t, "124", c.Targets[0].Args["buildno"])
+	require.Equal(t, ptrstr("124"), c.Targets[0].Args["buildno"])
 }
 
 func TestHCLWithUserDefinedFunctions(t *testing.T) {
@@ -177,7 +177,7 @@ func TestHCLWithUserDefinedFunctions(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "webapp")
-	require.Equal(t, "124", c.Targets[0].Args["buildno"])
+	require.Equal(t, ptrstr("124"), c.Targets[0].Args["buildno"])
 }
 
 func TestHCLWithVariables(t *testing.T) {
@@ -206,9 +206,9 @@ func TestHCLWithVariables(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "webapp")
-	require.Equal(t, "123", c.Targets[0].Args["buildno"])
+	require.Equal(t, ptrstr("123"), c.Targets[0].Args["buildno"])
 
-	os.Setenv("BUILD_NUMBER", "456")
+	t.Setenv("BUILD_NUMBER", "456")
 
 	c, err = ParseFile(dt, "docker-bake.hcl")
 	require.NoError(t, err)
@@ -219,7 +219,7 @@ func TestHCLWithVariables(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "webapp")
-	require.Equal(t, "456", c.Targets[0].Args["buildno"])
+	require.Equal(t, ptrstr("456"), c.Targets[0].Args["buildno"])
 }
 
 func TestHCLWithVariablesInFunctions(t *testing.T) {
@@ -244,7 +244,7 @@ func TestHCLWithVariablesInFunctions(t *testing.T) {
 	require.Equal(t, c.Targets[0].Name, "webapp")
 	require.Equal(t, []string{"user/repo:v1"}, c.Targets[0].Tags)
 
-	os.Setenv("REPO", "docker/buildx")
+	t.Setenv("REPO", "docker/buildx")
 
 	c, err = ParseFile(dt, "docker-bake.hcl")
 	require.NoError(t, err)
@@ -280,10 +280,10 @@ func TestHCLMultiFileSharedVariables(t *testing.T) {
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre-abc", c.Targets[0].Args["v1"])
-	require.Equal(t, "abc-post", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("pre-abc"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("abc-post"), c.Targets[0].Args["v2"])
 
-	os.Setenv("FOO", "def")
+	t.Setenv("FOO", "def")
 
 	c, err = ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
@@ -293,12 +293,11 @@ func TestHCLMultiFileSharedVariables(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre-def", c.Targets[0].Args["v1"])
-	require.Equal(t, "def-post", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("pre-def"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("def-post"), c.Targets[0].Args["v2"])
 }
 
 func TestHCLVarsWithVars(t *testing.T) {
-	os.Unsetenv("FOO")
 	dt := []byte(`
 		variable "FOO" {
 			default = upper("${BASE}def")
@@ -330,10 +329,10 @@ func TestHCLVarsWithVars(t *testing.T) {
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre--ABCDEF-", c.Targets[0].Args["v1"])
-	require.Equal(t, "ABCDEF-post", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("pre--ABCDEF-"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("ABCDEF-post"), c.Targets[0].Args["v2"])
 
-	os.Setenv("BASE", "new")
+	t.Setenv("BASE", "new")
 
 	c, err = ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
@@ -343,12 +342,11 @@ func TestHCLVarsWithVars(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre--NEWDEF-", c.Targets[0].Args["v1"])
-	require.Equal(t, "NEWDEF-post", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("pre--NEWDEF-"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("NEWDEF-post"), c.Targets[0].Args["v2"])
 }
 
 func TestHCLTypedVariables(t *testing.T) {
-	os.Unsetenv("FOO")
 	dt := []byte(`
 		variable "FOO" {
 			default = 3
@@ -369,33 +367,80 @@ func TestHCLTypedVariables(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "lower", c.Targets[0].Args["v1"])
-	require.Equal(t, "yes", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("lower"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("yes"), c.Targets[0].Args["v2"])
 
-	os.Setenv("FOO", "5.1")
-	os.Setenv("IS_FOO", "0")
+	t.Setenv("FOO", "5.1")
+	t.Setenv("IS_FOO", "0")
 
 	c, err = ParseFile(dt, "docker-bake.hcl")
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "higher", c.Targets[0].Args["v1"])
-	require.Equal(t, "no", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("higher"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("no"), c.Targets[0].Args["v2"])
 
-	os.Setenv("FOO", "NaN")
+	t.Setenv("FOO", "NaN")
 	_, err = ParseFile(dt, "docker-bake.hcl")
 	require.Error(t, err)
 	require.Contains(t, err.Error(), "failed to parse FOO as number")
 
-	os.Setenv("FOO", "0")
-	os.Setenv("IS_FOO", "maybe")
+	t.Setenv("FOO", "0")
+	t.Setenv("IS_FOO", "maybe")
 
 	_, err = ParseFile(dt, "docker-bake.hcl")
 	require.Error(t, err)
 	require.Contains(t, err.Error(), "failed to parse IS_FOO as bool")
 }
 
+func TestHCLNullVariables(t *testing.T) {
+	dt := []byte(`
+		variable "FOO" {
+			default = null
+		}
+		target "default" {
+			args = {
+				foo = FOO
+			}
+		}`)
+
+	c, err := ParseFile(dt, "docker-bake.hcl")
+	require.NoError(t, err)
+	require.Equal(t, ptrstr(nil), c.Targets[0].Args["foo"])
+
+	t.Setenv("FOO", "bar")
+	c, err = ParseFile(dt, "docker-bake.hcl")
+	require.NoError(t, err)
+	require.Equal(t, ptrstr("bar"), c.Targets[0].Args["foo"])
+}
+
+func TestJSONNullVariables(t *testing.T) {
+	dt := []byte(`{
+		"variable": {
+			"FOO": {
+				"default": null
+			}
+		},
+		"target": {
+			"default": {
+				"args": {
+					"foo": "${FOO}"
+				}
+			}
+		}
+	}`)
+
+	c, err := ParseFile(dt, "docker-bake.json")
+	require.NoError(t, err)
+	require.Equal(t, ptrstr(nil), c.Targets[0].Args["foo"])
+
+	t.Setenv("FOO", "bar")
+	c, err = ParseFile(dt, "docker-bake.json")
+	require.NoError(t, err)
+	require.Equal(t, ptrstr("bar"), c.Targets[0].Args["foo"])
+}
+
 func TestHCLVariableCycle(t *testing.T) {
 	dt := []byte(`
 		variable "FOO" {
@@ -431,16 +476,16 @@ func TestHCLAttrs(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "attr-abcdef", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("attr-abcdef"), c.Targets[0].Args["v1"])
 
 	// env does not apply if no variable
-	os.Setenv("FOO", "bar")
+	t.Setenv("FOO", "bar")
 	c, err = ParseFile(dt, "docker-bake.hcl")
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "attr-abcdef", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("attr-abcdef"), c.Targets[0].Args["v1"])
 	// attr-multifile
 }
 
@@ -549,11 +594,10 @@ func TestHCLAttrsCustomType(t *testing.T) {
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
 	require.Equal(t, []string{"linux/arm64", "linux/amd64"}, c.Targets[0].Platforms)
-	require.Equal(t, "linux/arm64", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("linux/arm64"), c.Targets[0].Args["v1"])
 }
 
 func TestHCLMultiFileAttrs(t *testing.T) {
-	os.Unsetenv("FOO")
 	dt := []byte(`
 		variable "FOO" {
 			default = "abc"
@@ -575,9 +619,9 @@ func TestHCLMultiFileAttrs(t *testing.T) {
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre-def", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("pre-def"), c.Targets[0].Args["v1"])
 
-	os.Setenv("FOO", "ghi")
+	t.Setenv("FOO", "ghi")
 
 	c, err = ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
@@ -587,7 +631,7 @@ func TestHCLMultiFileAttrs(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre-ghi", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("pre-ghi"), c.Targets[0].Args["v1"])
 }
 
 func TestJSONAttributes(t *testing.T) {
@@ -598,7 +642,7 @@ func TestJSONAttributes(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre-abc-def", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("pre-abc-def"), c.Targets[0].Args["v1"])
 }
 
 func TestJSONFunctions(t *testing.T) {
@@ -623,7 +667,7 @@ func TestJSONFunctions(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "pre-<FOO-abc>", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("pre-<FOO-abc>"), c.Targets[0].Args["v1"])
 }
 
 func TestHCLFunctionInAttr(t *testing.T) {
@@ -651,7 +695,7 @@ func TestHCLFunctionInAttr(t *testing.T) {
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "FOO <> [baz]", c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("FOO <> [baz]"), c.Targets[0].Args["v1"])
 }
 
 func TestHCLCombineCompose(t *testing.T) {
@@ -682,8 +726,8 @@ services:
 
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, c.Targets[0].Name, "app")
-	require.Equal(t, "foo", c.Targets[0].Args["v1"])
-	require.Equal(t, "bar", c.Targets[0].Args["v2"])
+	require.Equal(t, ptrstr("foo"), c.Targets[0].Args["v1"])
+	require.Equal(t, ptrstr("bar"), c.Targets[0].Args["v2"])
 	require.Equal(t, "dir", *c.Targets[0].Context)
 	require.Equal(t, "Dockerfile-alternate", *c.Targets[0].Dockerfile)
 }
@@ -828,10 +872,10 @@ target "two" {
 	require.Equal(t, 2, len(c.Targets))
 
 	require.Equal(t, c.Targets[0].Name, "one")
-	require.Equal(t, map[string]string{"a": "pre-ghi-jkl"}, c.Targets[0].Args)
+	require.Equal(t, map[string]*string{"a": ptrstr("pre-ghi-jkl")}, c.Targets[0].Args)
 
 	require.Equal(t, c.Targets[1].Name, "two")
-	require.Equal(t, map[string]string{"b": "pre-jkl"}, c.Targets[1].Args)
+	require.Equal(t, map[string]*string{"b": ptrstr("pre-jkl")}, c.Targets[1].Args)
 }
 
 func TestEmptyVariableJSON(t *testing.T) {
@@ -882,3 +926,12 @@ func TestVarUnsupportedType(t *testing.T) {
 	_, err := ParseFile(dt, "docker-bake.hcl")
 	require.Error(t, err)
 }
+
+func ptrstr(s interface{}) *string {
+	var n *string = nil
+	if reflect.ValueOf(s).Kind() == reflect.String {
+		ss := s.(string)
+		n = &ss
+	}
+	return n
+}
diff --git a/bake/hclparser/expr.go b/bake/hclparser/expr.go
index f8a5e765..23a99f54 100644
--- a/bake/hclparser/expr.go
+++ b/bake/hclparser/expr.go
@@ -83,7 +83,7 @@ func appendJSONFuncCalls(exp hcl.Expression, m map[string]struct{}) error {
 
 	// hcl/v2/json/ast#stringVal
 	val := src.FieldByName("Value")
-	if val.IsZero() {
+	if !val.IsValid() || val.IsZero() {
 		return nil
 	}
 	rng := src.FieldByName("SrcRange")
diff --git a/bake/hclparser/hclparser.go b/bake/hclparser/hclparser.go
index ac1f248e..6a8a7926 100644
--- a/bake/hclparser/hclparser.go
+++ b/bake/hclparser/hclparser.go
@@ -281,19 +281,16 @@ func (p *parser) resolveValue(name string) (err error) {
 	_, isVar := p.vars[name]
 
 	if envv, ok := p.opt.LookupVar(name); ok && isVar {
-		if vv.Type().Equals(cty.Bool) {
+		switch {
+		case vv.Type().Equals(cty.Bool):
 			b, err := strconv.ParseBool(envv)
 			if err != nil {
 				return errors.Wrapf(err, "failed to parse %s as bool", name)
 			}
-			vv := cty.BoolVal(b)
-			v = &vv
-			return nil
-		} else if vv.Type().Equals(cty.String) {
-			vv := cty.StringVal(envv)
-			v = &vv
-			return nil
-		} else if vv.Type().Equals(cty.Number) {
+			vv = cty.BoolVal(b)
+		case vv.Type().Equals(cty.String), vv.Type().Equals(cty.DynamicPseudoType):
+			vv = cty.StringVal(envv)
+		case vv.Type().Equals(cty.Number):
 			n, err := strconv.ParseFloat(envv, 64)
 			if err == nil && (math.IsNaN(n) || math.IsInf(n, 0)) {
 				err = errors.Errorf("invalid number value")
@@ -301,10 +298,8 @@ func (p *parser) resolveValue(name string) (err error) {
 			if err != nil {
 				return errors.Wrapf(err, "failed to parse %s as number", name)
 			}
-			vv := cty.NumberVal(big.NewFloat(n))
-			v = &vv
-			return nil
-		} else {
+			vv = cty.NumberVal(big.NewFloat(n))
+		default:
 			// TODO: support lists with csv values
 			return errors.Errorf("unsupported type %s for variable %s", vv.Type().FriendlyName(), name)
 		}