diff --git a/src/cli-options.ts b/src/cli-options.ts
index b12645f4b..97d8fb46f 100644
--- a/src/cli-options.ts
+++ b/src/cli-options.ts
@@ -276,9 +276,15 @@ function getArgvOptions(
       //
       // npm 8.11.0
       //   - Like npm 6, except there is no "npm_config_argv" environment variable.
+      //
+      // npm 12 (https://github.com/npm/cli/pull/8071)
+      //   - "npm run build --watch" is rejected as an unrecognized npm argument
+      //     instead of being silently turned into "npm_config_watch", so we also
+      //     accept WIREIT_WATCH=1 as an escape hatch (see #1346).
       return {
         watch:
-          process.env['npm_config_watch'] !== undefined
+          process.env['npm_config_watch'] !== undefined ||
+          process.env['WIREIT_WATCH'] !== undefined
             ? readWatchConfigFromEnv()
             : false,
         extraArgs: process.argv.slice(2),
@@ -446,6 +452,11 @@ function parseRemainingArgs(
         `e.g. "npm run build -- --extra".`,
     );
   }
+  // Also accept WIREIT_WATCH as an escape hatch (matches the npm branch behaviour,
+  // useful for yarn/pnpm/node --run wrappers that scrub --watch from argv).
+  if (!watch && process.env['WIREIT_WATCH'] !== undefined) {
+    watch = readWatchConfigFromEnv();
+  }
   return {
     watch,
     extraArgs,
diff --git a/src/test/cli-options.test.ts b/src/test/cli-options.test.ts
index 48520ad4e..60278d96a 100644
--- a/src/test/cli-options.test.ts
+++ b/src/test/cli-options.test.ts
@@ -247,6 +247,30 @@ for (const {agent, runCmd, testCmd, startCmd, needsExtraDashes} of commands) {
     }),
   );
 
+  // https://github.com/google/wireit/issues/1346
+  // npm 12 no longer forwards `--watch` as `npm_config_watch`, so we accept
+  // WIREIT_WATCH=1 as an alternative trigger. Should work on every agent.
+  void test(
+    `${agent} WIREIT_WATCH=1 run`,
+    rigTest(async ({rig}) => {
+      await assertOptions(
+        rig,
+        `${runCmd} main`,
+        {
+          agent,
+          script: {
+            packageDir: rig.temp,
+            name: 'main',
+          },
+          watch: {strategy: 'event'},
+        },
+        {
+          WIREIT_WATCH: '1',
+        },
+      );
+    }),
+  );
+
   // Doesn't work with yarn 1.x due to
   // https://github.com/yarnpkg/yarn/issues/8905. Anything before a "--" is not
   // included on argv, and the npm_config_argv variable does not let us