diff --git a/sdk/identity/azure-identity/CHANGELOG.md b/sdk/identity/azure-identity/CHANGELOG.md
index bd3a14d3805d..8d039fd5c7c3 100644
--- a/sdk/identity/azure-identity/CHANGELOG.md
+++ b/sdk/identity/azure-identity/CHANGELOG.md
@@ -1,6 +1,9 @@
 # Release History
 
 ## 1.4.0b6 (Unreleased)
+- `AzureCliCredential` no longer raises an exception due to unexpected output
+  from the CLI when run by PyCharm (thanks @NVolcz)
+  ([#11362](https://github.com/Azure/azure-sdk-for-python/pull/11362))
 - Upgraded minimum `msal` version to 1.3.0
 - The async `AzureCliCredential` correctly invokes `/bin/sh`
   ([#12048](https://github.com/Azure/azure-sdk-for-python/issues/12048))
diff --git a/sdk/identity/azure-identity/azure/identity/_credentials/azure_cli.py b/sdk/identity/azure-identity/azure/identity/_credentials/azure_cli.py
index 07687f8d32c1..c5fe99a1119c 100644
--- a/sdk/identity/azure-identity/azure/identity/_credentials/azure_cli.py
+++ b/sdk/identity/azure-identity/azure/identity/_credentials/azure_cli.py
@@ -104,7 +104,12 @@ def _run_command(command):
     try:
         working_directory = get_safe_working_dir()
 
-        kwargs = {"stderr": subprocess.STDOUT, "cwd": working_directory, "universal_newlines": True}
+        kwargs = {
+            "stderr": subprocess.STDOUT,
+            "cwd": working_directory,
+            "universal_newlines": True,
+            "env": dict(os.environ, AZURE_CORE_NO_COLOR="true"),
+        }
         if platform.python_version() >= "3.3":
             kwargs["timeout"] = 10
 
diff --git a/sdk/identity/azure-identity/azure/identity/aio/_credentials/azure_cli.py b/sdk/identity/azure-identity/azure/identity/aio/_credentials/azure_cli.py
index a562a7831b9f..56c025680db3 100644
--- a/sdk/identity/azure-identity/azure/identity/aio/_credentials/azure_cli.py
+++ b/sdk/identity/azure-identity/azure/identity/aio/_credentials/azure_cli.py
@@ -4,6 +4,7 @@
 # ------------------------------------
 import asyncio
 import sys
+import os
 
 from azure.core.exceptions import ClientAuthenticationError
 from .._credentials.base import AsyncCredentialBase
@@ -68,7 +69,11 @@ async def _run_command(command):
 
     try:
         proc = await asyncio.create_subprocess_exec(
-            *args, stdout=asyncio.subprocess.PIPE, stderr=asyncio.subprocess.STDOUT, cwd=working_directory
+            *args,
+            stdout=asyncio.subprocess.PIPE,
+            stderr=asyncio.subprocess.STDOUT,
+            cwd=working_directory,
+            env=dict(os.environ, AZURE_CORE_NO_COLOR="true")
         )
     except OSError as ex:
         # failed to execute 'cmd' or '/bin/sh'; CLI may or may not be installed