diff --git a/instack_undercloud/tests/test_undercloud.py b/instack_undercloud/tests/test_undercloud.py
index 77ec8ef00..b15fffd05 100644
--- a/instack_undercloud/tests/test_undercloud.py
+++ b/instack_undercloud/tests/test_undercloud.py
@@ -278,6 +278,12 @@ class TestGenerateEnvironment(BaseTestCase):
         env = undercloud._generate_environment('.')
         self.assertEqual('', env['UNDERCLOUD_SERVICE_CERTIFICATE'])
 
+    def test_remove_dib_yum_repo_conf(self):
+        self.useFixture(fixtures.EnvironmentVariable('DIB_YUM_REPO_CONF',
+                                                     'rum_yepo.conf'))
+        env = undercloud._generate_environment('.')
+        self.assertNotIn(env, 'DIB_YUM_REPO_CONF')
+
 
 class TestWritePasswordFile(BaseTestCase):
     def test_normal(self):
diff --git a/instack_undercloud/undercloud.py b/instack_undercloud/undercloud.py
index a50a16937..b1926e78a 100644
--- a/instack_undercloud/undercloud.py
+++ b/instack_undercloud/undercloud.py
@@ -645,6 +645,10 @@ def _generate_environment(instack_root):
     if instack_env['UNDERCLOUD_SERVICE_CERTIFICATE']:
         instack_env['UNDERCLOUD_SERVICE_CERTIFICATE'] = os.path.abspath(
             instack_env['UNDERCLOUD_SERVICE_CERTIFICATE'])
+    # We're not in a chroot so this doesn't make sense, and it causes weird
+    # errors if it's set.
+    if instack_env.get('DIB_YUM_REPO_CONF'):
+        del instack_env['DIB_YUM_REPO_CONF']
 
     _generate_endpoints(instack_env)