diff --git a/ansible/kolla-ansible.yml b/ansible/kolla-ansible.yml
index cae7c38c5..723459df1 100644
--- a/ansible/kolla-ansible.yml
+++ b/ansible/kolla-ansible.yml
@@ -91,7 +91,9 @@
         kolla_external_fqdn_cert: "{{ kolla_config_path }}/certificates/haproxy.pem"
         kolla_internal_fqdn_cert: "{{ kolla_config_path }}/certificates/haproxy-internal.pem"
         kolla_ansible_passwords_path: "{{ kayobe_env_config_path }}/kolla/passwords.yml"
-        kolla_overcloud_group_vars_path: "{{ kayobe_env_config_path }}/kolla/inventory/group_vars"
+        kolla_overcloud_inventory_search_paths:
+          - "{{ kayobe_config_path }}"
+          - "{{ kayobe_env_config_path }}"
         kolla_ansible_certificates_path: "{{ kayobe_env_config_path }}/kolla/certificates"
         # NOTE: This differs from the default SELinux mode in kolla ansible,
         # which is permissive. The justification for using this mode is twofold:
diff --git a/ansible/roles/kolla-ansible/defaults/main.yml b/ansible/roles/kolla-ansible/defaults/main.yml
index f2cb56f28..bf2b371e7 100644
--- a/ansible/roles/kolla-ansible/defaults/main.yml
+++ b/ansible/roles/kolla-ansible/defaults/main.yml
@@ -79,8 +79,12 @@ kolla_ansible_become: false
 # Full custom seed inventory contents.
 kolla_seed_inventory_custom:
 
-# Directory containing custom Kolla-Ansible group vars.
-kolla_overcloud_group_vars_path:
+# Directories in kayobe config to search for kolla inventories. The inventory
+# is assumed to be in a directory, 'kolla/inventory', relative to the search path.
+# Any inventories discovered are passed through to kolla-ansible in the order
+# in which they are discovered i.e search paths placed later in the list have
+# precedence over the earlier ones.
+kolla_overcloud_inventory_search_paths: []
 
 # Custom overcloud inventory containing a mapping from top level groups to
 # hosts.
diff --git a/ansible/roles/kolla-ansible/tasks/config.yml b/ansible/roles/kolla-ansible/tasks/config.yml
index 3e9028073..9c8f8904f 100644
--- a/ansible/roles/kolla-ansible/tasks/config.yml
+++ b/ansible/roles/kolla-ansible/tasks/config.yml
@@ -37,7 +37,7 @@
   with_items:
     - "{{ kolla_config_path }}"
     - "{{ kolla_seed_inventory_path }}"
-    - "{{ kolla_overcloud_inventory_path }}/group_vars"
+    - "{{ kolla_overcloud_inventory_path }}"
     - "{{ kolla_node_custom_config_path }}"
 
 - name: Write environment file into Kolla configuration path
@@ -65,16 +65,52 @@
     dest: "{{ kolla_overcloud_inventory_path }}/hosts"
     mode: 0640
 
-- name: Look for custom Kolla overcloud group vars
-  stat:
-    path: "{{ kolla_overcloud_group_vars_path }}"
-  register: kolla_ansible_custom_overcloud_group_vars
+- name: Make sure extra-inventories directory exists
+  file:
+    path: "{{ kolla_extra_inventories_path }}"
+    mode: "0750"
+    state: directory
 
-- name: Copy over custom Kolla overcloud group vars
-  copy:
-    src: "{{ kolla_overcloud_group_vars_path }}"
-    dest: "{{ kolla_overcloud_inventory_path }}/"
-  when: kolla_ansible_custom_overcloud_group_vars.stat.exists
+- name: Copying custom inventory
+  vars:
+    # This will be the environment name in the case of a kayobe environment
+    inventory_name: "{{ (item  ~ '/../..') | realpath | basename }}"
+  synchronize:
+    dest: "{{ kolla_extra_inventories_path }}/{{ inventory_name }}"
+    recursive: true
+    delete: true
+    src: "{{ item }}/"
+    rsync_opts:
+      - --exclude=kayobe_blank_hosts
+      - --exclude=*.j2
+  loop: "{{ kolla_overcloud_inventory_search_paths | product(['/kolla/inventory']) | map('join') | select('exists') | unique | list }}"
+  loop_control:
+    label: "{{ inventory_name }}"
+
+- name: Create blank hosts file to prevent ansible warning
+  # Silence a benign warning: Unable to parse
+  # <kolla-config-path>/extra-inventories/level2/inventory as an inventory source
+  # When no hosts are defined. This occurs when you only define group_vars.
+  vars:
+    inventory_name: "{{ (item  ~ '/../..') | realpath | basename }}"
+  file:
+    path: "{{ kolla_extra_inventories_path }}/{{ inventory_name }}/kayobe_blank_hosts"
+    state: touch
+    modification_time: preserve
+    access_time: preserve
+  loop: "{{ kolla_overcloud_inventory_search_paths | product(['/kolla/inventory']) | map('join') | select('exists') | unique | list }}"
+  loop_control:
+    label: "{{ inventory_name }}"
+
+- name: Clean up inventories that no longer exist
+  vars:
+    inventory_name: "{{ (item  ~ '/../..') | realpath | basename }}"
+  file:
+    path: "{{ kolla_extra_inventories_path }}/{{ inventory_name }}"
+    state: absent
+  loop: "{{ kolla_overcloud_inventory_search_paths | product(['/kolla/inventory']) | map('join') | reject('exists') | unique | list }}"
+  loop_control:
+    label: "{{ inventory_name }}"
 
 - name: Ensure the Kolla passwords file exists
   vars:
diff --git a/ansible/roles/kolla-ansible/tests/test-defaults.yml b/ansible/roles/kolla-ansible/tests/test-defaults.yml
index 6bb6f2803..fe5fbda7a 100644
--- a/ansible/roles/kolla-ansible/tests/test-defaults.yml
+++ b/ansible/roles/kolla-ansible/tests/test-defaults.yml
@@ -22,7 +22,8 @@
             kolla_node_custom_config_path: "{{ temp_path }}/etc/kolla/config"
             # Purposely does not exist to simulate the case when no group vars
             # are provided
-            kolla_overcloud_group_vars_path: "{{ temp_path }}/etc/kayobe/kolla/inventory/group_vars"
+            kolla_overcloud_inventory_search_paths:
+              - "{{ temp_path }}/etc/kayobe/"
             kolla_ansible_passwords_path: "{{ temp_path }}/passwords.yml"
             # Required config.
             kolla_base_distro: "fake-distro"
@@ -128,27 +129,17 @@
           with_items:
             - seed
             - overcloud
-            - overcloud/group_vars
           register: inventory_stat
 
-        - name: Validate inventory files
-          assert:
-            that:
-              - item.stat.exists
-              - item.stat.size > 0
-            msg: >
-              Inventory file {{ item.item }} was not found.
-          with_items: "{{ inventory_stat.results }}"
-
-        - name: Look for custom overcloud group vars
+        - name: Look for inventory overrides
           find:
-            paths: "{{ temp_path ~ '/etc/kolla/inventory/group_vars' }}"
-          register: kolla_ansible_overcloud_group_vars
+            paths: "{{ temp_path ~ '/etc/kolla/extra-inventories/' }}"
+          register: kolla_ansible_overcloud_inventory_overrides
 
-        - name: Check that no overcloud group vars are set
+        - name: Check that no inventory overrides are configured
           assert:
             that:
-              - kolla_ansible_overcloud_group_vars.matched == 0
+              -  kolla_ansible_overcloud_inventory_overrides.matched == 0
             msg: >
               Overcloud group vars were found when they should not be set.
 
diff --git a/ansible/roles/kolla-ansible/tests/test-extras.yml b/ansible/roles/kolla-ansible/tests/test-extras.yml
index e3d1d6a96..32d5660d0 100644
--- a/ansible/roles/kolla-ansible/tests/test-extras.yml
+++ b/ansible/roles/kolla-ansible/tests/test-extras.yml
@@ -50,6 +50,19 @@
           ---
           bar_port: "4567"
 
+    - name: Create directory for extra group vars
+      file:
+        path: "{{ tempfile_result.path ~ '/etc/kayobe/environments/example/kolla/inventory/group_vars' }}"
+        recurse: true
+        state: directory
+
+    - name: Create custom extra group vars
+      copy:
+        dest: "{{ tempfile_result.path ~ '/etc/kayobe/environments/example/kolla/inventory/group_vars/baz_group' }}"
+        content: |
+          ---
+          baz_port: "8910"
+
     - name: Create directory for custom CA certificates
       file:
         path: "{{ tempfile_result.path }}/etc/kayobe/kolla/certificates/ca"
@@ -79,7 +92,9 @@
             kolla_ansible_venv: "{{ temp_path }}/venv"
             kolla_ansible_vault_password: "fake-password"
             kolla_config_path: "{{ temp_path }}/etc/kolla"
-            kolla_overcloud_group_vars_path: "{{ temp_path }}/etc/kayobe/kolla/inventory/group_vars"
+            kolla_overcloud_inventory_search_paths:
+              - "{{ temp_path }}/etc/kayobe/"
+              - "{{ temp_path }}/etc/kayobe/environments/example/"
             kolla_node_custom_config_path: "{{ temp_path }}/etc/kolla/config"
             kolla_ansible_passwords_path: "{{ temp_path }}/passwords.yml"
             # Config.
@@ -417,14 +432,21 @@
             - test-controller
             - test-compute
 
-        - name: Check whether inventory group vars files exist
+        - name: Check whether inventory group vars from base config exist
           stat:
-            path: "{{ temp_path ~ '/etc/kolla/inventory/overcloud/group_vars/' ~ item }}"
+            path: "{{ temp_path ~ '/etc/kolla/extra-inventories/kayobe/group_vars/' ~ item }}"
           with_items:
             - foo_group/all
             - bar_group
           register: group_vars_stat
 
+        - name: Check whether inventory group vars from environment exist
+          stat:
+            path: "{{ temp_path ~ '/etc/kolla/extra-inventories/example/group_vars/' ~ item }}"
+          with_items:
+            - baz_group
+          register: group_vars_environment_stat
+
         - name: Validate inventory group vars files
           assert:
             that:
@@ -432,7 +454,7 @@
               - item.stat.size > 0
             msg: >
               Inventory file {{ item.item }} was not found.
-          with_items: "{{ group_vars_stat.results }}"
+          with_items: "{{ group_vars_stat.results + group_vars_environment_stat.results }}"
 
         - name: Read inventory group vars files
           slurp:
@@ -440,6 +462,12 @@
           with_items: "{{ group_vars_stat.results }}"
           register: group_vars_slurp
 
+        - name: Read inventory environment group vars files
+          slurp:
+            src: "{{ item.stat.path }}"
+          with_items: "{{ group_vars_environment_stat.results }}"
+          register: group_vars_environment_slurp
+
         - name: Validate inventory group vars file contents
           assert:
             that:
@@ -458,6 +486,21 @@
                 ---
                 bar_port: "4567"
 
+        - name: Validate environment inventory group vars file contents
+          assert:
+            that:
+              - group_vars_content is defined
+              - group_vars_content == item.1
+          with_together:
+            - "{{ group_vars_environment_slurp.results }}"
+            - "{{ expected_contents }}"
+          vars:
+            group_vars_content: "{{ item.0.content | b64decode }}"
+            expected_contents:
+              - |
+                ---
+                baz_port: "8910"
+
         - name: Check whether API certificate files exist
           stat:
             path: "{{ temp_path ~ '/etc/kolla/certificates/' ~ item }}"
diff --git a/ansible/roles/kolla-ansible/vars/Debian.yml b/ansible/roles/kolla-ansible/vars/Debian.yml
index b9b871a4d..b6a90cd8e 100644
--- a/ansible/roles/kolla-ansible/vars/Debian.yml
+++ b/ansible/roles/kolla-ansible/vars/Debian.yml
@@ -7,3 +7,4 @@ kolla_ansible_package_dependencies:
   - python3-dev
   - python3-pip
   - python3-venv
+  - rsync
diff --git a/ansible/roles/kolla-ansible/vars/RedHat.yml b/ansible/roles/kolla-ansible/vars/RedHat.yml
index 6568ed9d1..239dcfd85 100644
--- a/ansible/roles/kolla-ansible/vars/RedHat.yml
+++ b/ansible/roles/kolla-ansible/vars/RedHat.yml
@@ -6,3 +6,4 @@ kolla_ansible_package_dependencies:
   - openssl-devel
   - python3-devel
   - python3-pip
+  - rsync
diff --git a/ansible/roles/kolla-ansible/vars/main.yml b/ansible/roles/kolla-ansible/vars/main.yml
index d7fcd6b84..9ba194659 100644
--- a/ansible/roles/kolla-ansible/vars/main.yml
+++ b/ansible/roles/kolla-ansible/vars/main.yml
@@ -66,6 +66,10 @@ kolla_seed_inventory_path: "{{ kolla_config_path }}/inventory/seed"
 # Path to the kolla ansible overcloud inventory directory.
 kolla_overcloud_inventory_path: "{{ kolla_config_path }}/inventory/overcloud"
 
+# Path to pass-through inventories. These are layered on top of kayobe
+# generated one.
+kolla_extra_inventories_path: "{{ kolla_config_path }}/extra-inventories"
+
 ###############################################################################
 # Feature configuration.
 
diff --git a/doc/source/configuration/reference/kolla-ansible.rst b/doc/source/configuration/reference/kolla-ansible.rst
index 27f9f638f..97f55c70e 100644
--- a/doc/source/configuration/reference/kolla-ansible.rst
+++ b/doc/source/configuration/reference/kolla-ansible.rst
@@ -540,9 +540,26 @@ In case the variable requires a different name in Kolla Ansible, use
    kolla_overcloud_inventory_pass_through_host_vars_map_extra:
      my_kayobe_var: my_kolla_ansible_var
 
-Custom Group Variables
+.. _custom_kolla_inventory:
+
+Custom Kolla Inventory
 ----------------------
 
+When running Kolla Ansible playbooks, kayobe will check for any customised
+inventories in the following locations:
+
+* ``${KAYOBE_CONFIG_PATH}/kolla/inventory/``
+* ``${KAYOBE_CONFIG_PATH}/environments/<environment>/kolla/inventory/``
+    * Only used with the :ref:`multiple environments feature <multiple-environments>`
+
+These are copied when kayobe generates the Kolla Ansible configuration. The
+copy is passed to Ansible as an additional inventory when running any
+Kolla Ansible playbooks. No templating or additional preprocessing is
+performed. For this reason, this directory must be a valid Ansible inventory,
+with the exception that ``*.j2`` files are ignored to keep compatibility with
+:ref:`custom Kolla Ansible inventory templates
+<custom-kolla-inventory-templates>`.
+
 Group variables can be used to set configuration for all hosts in a group. They
 can be set in Kolla Ansible by placing files in
 ``${KAYOBE_CONFIG_PATH}/kolla/inventory/group_vars/*``. Since this
diff --git a/doc/source/control-plane-service-placement.rst b/doc/source/control-plane-service-placement.rst
index 401c5adb9..c0f653bc2 100644
--- a/doc/source/control-plane-service-placement.rst
+++ b/doc/source/control-plane-service-placement.rst
@@ -210,6 +210,8 @@ providing the necessary variables for a control plane host.
 Here we are using the controller-specific values for some of these variables,
 but they could equally be different.
 
+.. _custom-kolla-inventory-templates:
+
 Example 2: Overriding the Kolla-ansible Inventory
 -------------------------------------------------
 
diff --git a/doc/source/multiple-environments.rst b/doc/source/multiple-environments.rst
index fa086eb60..bf2097d98 100644
--- a/doc/source/multiple-environments.rst
+++ b/doc/source/multiple-environments.rst
@@ -1,3 +1,5 @@
+.. _multiple-environments:
+
 =====================
 Multiple Environments
 =====================
@@ -64,6 +66,12 @@ Kayobe configuration.
            ├── networks.yml
            └── overcloud.yml
 
+Naming
+------
+
+The environment name ``kayobe`` is reserved for internal use. The name should
+be a valid directory name, otherwise there are no other restrictions.
+
 Ansible Inventories
 -------------------
 
@@ -91,6 +99,22 @@ files) shows an example of multiple inventories.
        ├── groups
        └── group_vars/
 
+Custom Kolla Ansible inventories
+--------------------------------
+
+Kayobe has a :ref:`feature <custom_kolla_inventory>` to pass through
+additional inventories to Kolla Ansible. When using multiple environments,
+these are passed though as additional inventories to Ansible. The ordering is
+such that the inventory in the base layer of kayobe config overrides the
+internal kayobe inventory, and inventory in the environment overrides inventory
+in the base layer:
+
+.. code-block:: bash
+
+   ansible-playbook -i <internal kayobe inventory> -i <inventory from base layer> -i <inventory from environment>
+
+See :ref:`custom_kolla_inventory` for more details.
+
 Shared Extra Variables Files
 ----------------------------
 
diff --git a/kayobe/ansible.py b/kayobe/ansible.py
index 67df462e7..f0e4e8473 100644
--- a/kayobe/ansible.py
+++ b/kayobe/ansible.py
@@ -124,6 +124,11 @@ def _validate_args(parsed_args, playbooks):
                   parsed_args.config_path, result["message"])
         sys.exit(1)
 
+    if parsed_args.environment and parsed_args.environment == "kayobe":
+        LOG.error("The environment name 'kayobe' is reserved for internal "
+                  "use.")
+        sys.exit(1)
+
     env_path = _get_kayobe_environment_path(parsed_args)
     if env_path:
         result = utils.is_readable_dir(env_path)
diff --git a/kayobe/kolla_ansible.py b/kayobe/kolla_ansible.py
index 8ea1b830b..6af29f6fd 100644
--- a/kayobe/kolla_ansible.py
+++ b/kayobe/kolla_ansible.py
@@ -52,7 +52,8 @@ def add_args(parser):
                         help="specify inventory host path "
                              "(default=$%s/inventory or %s/inventory) for "
                              "Kolla Ansible" %
-                             (CONFIG_PATH_ENV, DEFAULT_CONFIG_PATH))
+                             (CONFIG_PATH_ENV, DEFAULT_CONFIG_PATH),
+                        action='append')
     parser.add_argument("-kl", "--kolla-limit", metavar="SUBSET",
                         help="further limit selected hosts to an additional "
                              "pattern")
@@ -70,13 +71,30 @@ def add_args(parser):
                              (VENV_PATH_ENV, DEFAULT_VENV_PATH))
 
 
-def _get_inventory_path(parsed_args, inventory_filename):
+def _get_inventory_paths(parsed_args, inventory_filename):
     """Return the path to the Kolla inventory."""
     if parsed_args.kolla_inventory:
         return parsed_args.kolla_inventory
     else:
-        return os.path.join(parsed_args.kolla_config_path, "inventory",
-                            inventory_filename)
+        paths = [os.path.join(parsed_args.kolla_config_path, "inventory",
+                              inventory_filename)]
+
+        def append_path(directory):
+            candidate_path = os.path.join(
+                parsed_args.kolla_config_path, "extra-inventories",
+                directory)
+            if utils.is_readable_dir(candidate_path)["result"]:
+                paths.append(candidate_path)
+
+        # Inventory in the base layer is placed in the "kayobe"
+        # directory. This means that you can't have an environment
+        # called kayobe as it would conflict.
+        append_path("kayobe")
+
+        if parsed_args.environment:
+            append_path(parsed_args.environment)
+
+        return paths
 
 
 def _validate_args(parsed_args, inventory_filename):
@@ -88,17 +106,18 @@ def _validate_args(parsed_args, inventory_filename):
                   parsed_args.kolla_config_path, result["message"])
         sys.exit(1)
 
-    inventory = _get_inventory_path(parsed_args, inventory_filename)
-    result = utils.is_readable_dir(inventory)
-    if not result["result"]:
-        # NOTE(mgoddard): Previously the inventory was a file, now it is a
-        # directory to allow us to support inventory host_vars. Support both
-        # formats for now.
-        result_f = utils.is_readable_file(inventory)
-        if not result_f["result"]:
-            LOG.error("Kolla inventory %s is invalid: %s",
-                      inventory, result["message"])
-            sys.exit(1)
+    inventories = _get_inventory_paths(parsed_args, inventory_filename)
+    for inventory in inventories:
+        result = utils.is_readable_dir(inventory)
+        if not result["result"]:
+            # NOTE(mgoddard): Previously the inventory was a file, now it is a
+            # directory to allow us to support inventory host_vars. Support
+            # both formats for now.
+            result_f = utils.is_readable_file(inventory)
+            if not result_f["result"]:
+                LOG.error("Kolla inventory %s is invalid: %s",
+                          inventory, result["message"])
+                sys.exit(1)
 
     result = utils.is_readable_dir(parsed_args.kolla_venv)
     if not result["result"]:
@@ -125,8 +144,9 @@ def build_args(parsed_args, command, inventory_filename, extra_vars=None,
     if parsed_args.kolla_playbook:
         cmd += ["--playbook", parsed_args.kolla_playbook]
     cmd += vault.build_args(parsed_args, "--key")
-    inventory = _get_inventory_path(parsed_args, inventory_filename)
-    cmd += ["--inventory", inventory]
+    inventories = _get_inventory_paths(parsed_args, inventory_filename)
+    for inventory in inventories:
+        cmd += ["--inventory", inventory]
     if parsed_args.kolla_config_path != DEFAULT_CONFIG_PATH:
         cmd += ["--configdir", parsed_args.kolla_config_path]
         cmd += ["--passwords",
diff --git a/kayobe/tests/unit/test_ansible.py b/kayobe/tests/unit/test_ansible.py
index 49487c096..4b34cd3c3 100644
--- a/kayobe/tests/unit/test_ansible.py
+++ b/kayobe/tests/unit/test_ansible.py
@@ -14,6 +14,7 @@
 
 import argparse
 import errno
+import logging
 import os
 import os.path
 import shutil
@@ -92,6 +93,53 @@ class TestCase(unittest.TestCase):
                                          quiet=False, env=expected_env)
         mock_vars.assert_called_once_with(["/etc/kayobe"])
 
+    @mock.patch.object(ansible, "_get_vars_files")
+    @mock.patch.object(utils, "is_readable_dir")
+    @mock.patch.object(utils, "is_readable_file")
+    @mock.patch.object(utils, "run_command")
+    def test_reserved_environment(
+            self, mock_run, mock_readable,
+            mock_readable_file, mock_vars):
+        mock_readable_file.return_value = {"result": True}
+        mock_readable.return_value = {"result": True}
+        mock_vars.return_value = ["/path/to/config/vars-file1.yml",
+                                  "/path/to/config/vars-file2.yaml"]
+        parser = argparse.ArgumentParser()
+        ansible.add_args(parser)
+        vault.add_args(parser)
+        args = [
+            "--environment", "kayobe",
+        ]
+        parsed_args = parser.parse_args(args)
+        with self.assertLogs(level=logging.ERROR) as ctx:
+            self.assertRaises(
+                SystemExit, ansible.run_playbooks, parsed_args,
+                ["playbook1.yml"]
+            )
+            exp = "The environment name 'kayobe' is reserved for internal use."
+            log_found = any(exp in t for t in ctx.output)
+            assert(log_found)
+
+    @mock.patch.object(ansible, "_get_vars_files")
+    @mock.patch.object(utils, "is_readable_dir")
+    @mock.patch.object(utils, "is_readable_file")
+    @mock.patch.object(utils, "run_command")
+    def test_reserved_environment_negative(
+            self, mock_run, mock_readable,
+            mock_readable_file, mock_vars):
+        mock_readable_file.return_value = {"result": True}
+        mock_readable.return_value = {"result": True}
+        mock_vars.return_value = ["/path/to/config/vars-file1.yml",
+                                  "/path/to/config/vars-file2.yaml"]
+        parser = argparse.ArgumentParser()
+        ansible.add_args(parser)
+        vault.add_args(parser)
+        args = [
+            "--environment", "kayobe2",
+        ]
+        parsed_args = parser.parse_args(args)
+        ansible.run_playbooks(parsed_args, ["playbook1.yml", "playbook2.yml"])
+
     @mock.patch.object(utils, "run_command")
     @mock.patch.object(ansible, "_get_vars_files")
     @mock.patch.object(ansible, "_validate_args")
diff --git a/kayobe/tests/unit/test_kolla_ansible.py b/kayobe/tests/unit/test_kolla_ansible.py
index 5a5a1202f..054508219 100644
--- a/kayobe/tests/unit/test_kolla_ansible.py
+++ b/kayobe/tests/unit/test_kolla_ansible.py
@@ -240,6 +240,40 @@ class TestCase(unittest.TestCase):
                                          env=expected_env)
         mock_readable.assert_called_once_with("/etc/kayobe/kolla/ansible.cfg")
 
+    @mock.patch.object(utils, "run_command")
+    @mock.patch.object(utils, "is_readable_dir")
+    @mock.patch.object(utils, "is_readable_file")
+    @mock.patch.object(kolla_ansible, "_validate_args")
+    def test_run_environment_inventories(self, mock_validate, mock_readable,
+                                         mock_readable_dir, mock_run):
+        mock_readable.return_value = {"result": True}
+        mock_readable_dir.return_value = {"result": True}
+        parser = argparse.ArgumentParser()
+        ansible.add_args(parser)
+        kolla_ansible.add_args(parser)
+        vault.add_args(parser)
+        args = [
+            "--environment", "myenv",
+        ]
+        parsed_args = parser.parse_args(args)
+        kolla_ansible.run(parsed_args, "command", "overcloud")
+        expected_cmd = [
+            ".", "/path/to/cwd/venvs/kolla-ansible/bin/activate", "&&",
+            "kolla-ansible", "command",
+            "--inventory", "/etc/kolla/inventory/overcloud",
+            "--inventory", "/etc/kolla/extra-inventories/kayobe",
+            "--inventory", '/etc/kolla/extra-inventories/myenv'
+        ]
+        expected_cmd = " ".join(expected_cmd)
+        mock_run.assert_called_once_with(expected_cmd, shell=True, quiet=False,
+                                         env=mock.ANY)
+        mock_readable_dir.assert_any_call(
+            "/etc/kolla/extra-inventories/kayobe"
+        )
+        mock_readable_dir.assert_any_call(
+            "/etc/kolla/extra-inventories/myenv"
+        )
+
     @mock.patch.object(utils, "run_command")
     @mock.patch.object(utils, "is_readable_file")
     @mock.patch.object(kolla_ansible, "_validate_args")
diff --git a/releasenotes/notes/adds-support-for-multiple-kolla-inventories-65fd7a4922c639c5.yaml b/releasenotes/notes/adds-support-for-multiple-kolla-inventories-65fd7a4922c639c5.yaml
new file mode 100644
index 000000000..749502b30
--- /dev/null
+++ b/releasenotes/notes/adds-support-for-multiple-kolla-inventories-65fd7a4922c639c5.yaml
@@ -0,0 +1,21 @@
+---
+features:
+  - |
+    Kolla Ansible inventories in the Kayobe configuration are now passed
+    through without modification.  Previously, only ``group_vars`` were passed
+    through.  When using multiple environments, the Kolla inventory from the
+    base configuration layer **and** the Kolla inventory from the Kayobe
+    environment layer will be passed through. The inventory from the
+    environment takes precedence over the inventory from the base layer. This
+    allows you to put any shared configuration in the base layer.
+upgrade:
+  - |
+    As Kolla Ansible inventories are now passed through without modification,
+    the inventory directory in Kayobe configuration
+    (``etc/kayobe/kolla/inventory/``) must be a valid Ansible inventory,
+    although ``*.j2`` files used as Kolla Ansible inventory templates are
+    ignored. For cases where only ``group_vars`` or ``hosts_vars`` are
+    required, a blank inventory file in the same directory may be used.
+  - |
+    It is no longer possible to create an environment named ``kayobe``. This
+    is reserved for internal use.