Has anyone run into an issue with running Intellij and finding that the environment variables that are configured in the Run Configuration are not being passed to the running task? My project is on Grails 4, Gradle Wrapper 5.x.

What version of IntelliJ ?

25.1.1

I would try the last 2023 release and see if it works. Intellij has been aggressively upgrading their expected gradle versions - I can believe they broke this.

So it seems like maybe the issue was the "Store as project file" setting. Removing that option seems like it now injects the environment variables again.

Yes!!! Anytime we switch from grails 5 to grails 3 it seems to mess up all our env variables