diff --git a/tools/mkenvimage.c b/tools/mkenvimage.c
index 6971b91314..8eee72e257 100644
--- a/tools/mkenvimage.c
+++ b/tools/mkenvimage.c
@@ -214,14 +214,10 @@ int main(int argc, char **argv)
 		}
 		ret = close(txt_fd);
 	}
-	/* The +1 is for the additionnal ending \0. See below. */
-	if (filesize + 1 > envsize) {
-		fprintf(stderr, "The input file is larger than the environment partition size\n");
-		return EXIT_FAILURE;
-	}
 
-	/* Replace newlines separating variables with \0 */
-	for (fp = 0, ep = 0 ; fp < filesize ; fp++) {
+	/* Parse a byte at time until reaching the file OR until the environment fills
+	 * up. Check ep against envsize - 1 to allow for extra trailing '\0'. */
+	for (fp = 0, ep = 0 ; fp < filesize && ep < envsize - 1; fp++) {
 		if (filebuf[fp] == '\n') {
 			if (fp == 0 || filebuf[fp-1] == '\n') {
 				/*
@@ -249,6 +245,25 @@ int main(int argc, char **argv)
 			envptr[ep++] = filebuf[fp];
 		}
 	}
+	/* If there are more bytes in the file still, it means the env filled up
+	 * before parsing the whole file.  Eat comments & whitespace here to see if
+	 * there was anything meaning full left in the file, and if so, throw a error
+	 * and exit. */
+	for( ; fp < filesize; fp++ )
+	{
+		if (filebuf[fp] == '\n') {
+			if (fp == 0 || filebuf[fp-1] == '\n') {
+				/* Ignore blank lines */
+				continue;
+			}
+		} else if ((fp == 0 || filebuf[fp-1] == '\n') && filebuf[fp] == '#') {
+			while (++fp < filesize && filebuf[fp] != '\n')
+			continue;
+		} else {
+			fprintf(stderr, "The environment file is too large for the target environment storage\n");
+			return EXIT_FAILURE;
+		}
+	}
 	/*
 	 * Make sure there is a final '\0'
 	 * And do it again on the next byte to mark the end of the environment.