diff --git a/compose/service.py b/compose/service.py
index 8b9f64f0f9..64a464536b 100644
--- a/compose/service.py
+++ b/compose/service.py
@@ -701,6 +701,12 @@ def build(self, no_cache=False, pull=False, force_rm=False):
 
         build_opts = self.options.get('build', {})
         path = build_opts.get('context')
+        # If build argument is not defined and there is no environment variable
+        # with the same name then build argument value will be None
+        # Moreover it will be sent to the docker engine as None and then
+        # interpreted as string None which in many cases will fail the build
+        # That is why we filter out all pairs with value equal to None
+        buildargs = {k: v for k, v in build_opts.get('args', {}).items() if v != 'None'}
         # python2 os.path() doesn't support unicode, so we need to encode it to
         # a byte string
         if not six.PY3:
@@ -715,7 +721,7 @@ def build(self, no_cache=False, pull=False, force_rm=False):
             pull=pull,
             nocache=no_cache,
             dockerfile=build_opts.get('dockerfile', None),
-            buildargs=build_opts.get('args', None),
+            buildargs=buildargs,
         )
 
         try:
diff --git a/tests/unit/service_test.py b/tests/unit/service_test.py
index a259c476fb..ae2cab2083 100644
--- a/tests/unit/service_test.py
+++ b/tests/unit/service_test.py
@@ -445,7 +445,7 @@ def test_create_container(self):
             forcerm=False,
             nocache=False,
             rm=True,
-            buildargs=None,
+            buildargs={},
         )
 
     def test_ensure_image_exists_no_build(self):
@@ -481,7 +481,33 @@ def test_ensure_image_exists_force_build(self):
             forcerm=False,
             nocache=False,
             rm=True,
-            buildargs=None,
+            buildargs={},
+        )
+
+    def test_ensure_filter_out_empty_build_args(self):
+        args = {u'no_proxy': 'None', u'https_proxy': 'something'}
+        service = Service('foo',
+                          client=self.mock_client,
+                          build={'context': '.', 'args': args})
+        self.mock_client.inspect_image.return_value = {'Id': 'abc123'}
+        self.mock_client.build.return_value = [
+            '{"stream": "Successfully built abcd"}',
+        ]
+
+        with mock.patch('compose.service.log', autospec=True) as mock_log:
+            service.ensure_image_exists(do_build=BuildAction.force)
+
+        assert not mock_log.warn.called
+        self.mock_client.build.assert_called_once_with(
+            tag='default_foo',
+            dockerfile=None,
+            stream=True,
+            path='.',
+            pull=False,
+            forcerm=False,
+            nocache=False,
+            rm=True,
+            buildargs={u'https_proxy': 'something'},
         )
 
     def test_build_does_not_pull(self):