diff --git a/packages/next/build/jest/jest.ts b/packages/next/build/jest/jest.ts
index 844afc8e22308..1dbd27da10374 100644
--- a/packages/next/build/jest/jest.ts
+++ b/packages/next/build/jest/jest.ts
@@ -1,6 +1,7 @@
 import { loadEnvConfig } from '@next/env'
 import { resolve, join } from 'path'
 import loadConfig from '../../server/config'
+import { NextConfigComplete } from '../../server/config-shared'
 import { PHASE_TEST } from '../../shared/lib/constants'
 import loadJsConfig from '../load-jsconfig'
 import * as Log from '../output/log'
@@ -27,6 +28,16 @@ function loadClosestPackageJson(dir: string, attempts = 1): any {
   }
 }
 
+/** Loads dotenv files and sets environment variables based on next config. */
+function setUpEnv(dir: string, nextConfig: NextConfigComplete) {
+  const dev = false
+  loadEnvConfig(dir, dev, Log)
+
+  if (nextConfig.experimental.newNextLinkBehavior) {
+    process.env.__NEXT_NEW_LINK_BEHAVIOR = 'true'
+  }
+}
+
 /*
 // Usage in jest.config.js
 const nextJest = require('next/jest');
@@ -61,7 +72,7 @@ export default function nextJest(options: { dir?: string } = {}) {
         isEsmProject = packageConfig.type === 'module'
 
         nextConfig = await getConfig(resolvedDir)
-        loadEnvConfig(resolvedDir, false, Log)
+        setUpEnv(resolvedDir, nextConfig)
         // TODO: revisit when bug in SWC is fixed that strips `.css`
         const result = await loadJsConfig(resolvedDir, nextConfig)
         jsConfig = result.jsConfig
diff --git a/test/production/jest/new-link-behavior.test.ts b/test/production/jest/new-link-behavior.test.ts
new file mode 100644
index 0000000000000..f088713a443a8
--- /dev/null
+++ b/test/production/jest/new-link-behavior.test.ts
@@ -0,0 +1,86 @@
+import { createNext } from 'e2e-utils'
+import { NextInstance } from 'test/lib/next-modes/base'
+
+describe('next/jest', () => {
+  let next: NextInstance
+
+  if (process.env.NEXT_TEST_REACT_VERSION === '^17') {
+    // react testing library is specific to react version
+    it('should bail on react v17', () => {})
+    return
+  }
+
+  beforeAll(async () => {
+    next = await createNext({
+      files: {
+        'pages/index.jsx': `
+          import Link from 'next/link'
+
+          export default function Page() {
+            return <Link href='https://example.com'><a>Hello World!</a></Link>
+          }
+        `,
+        'test/index.test.jsx': `
+          import { render, screen, act } from '@testing-library/react'
+          import Page from '../pages/index'
+
+          it('Link', () => {
+            act(() => {
+              render(<Page />)
+
+              const link = screen.getByRole('link', { name: 'Hello World!' })
+              expect(link.getAttribute('href')).toBe('https://example.com')
+            })
+          })
+        `,
+        'jest.config.js': `
+          const nextJest = require('next/jest')
+          const createJestConfig = nextJest({ dir: './' })
+          module.exports = createJestConfig({
+            testEnvironment: 'jest-environment-jsdom',
+          })
+        `,
+      },
+      dependencies: {
+        jest: '27.4.7',
+        '@testing-library/react': '12.1.2',
+      },
+      packageJson: {
+        scripts: {
+          build: 'next build && yarn jest --forceExit test/index.test.jsx',
+        },
+      },
+      skipStart: true,
+      buildCommand: `yarn build`,
+    })
+  })
+
+  afterAll(() => next.destroy())
+
+  it(`should use normal Link behavior when newNextLinkBehavior is unset`, async () => {
+    await next.start()
+  })
+
+  it(`should use new link behavior when newNextLinkBehavior is true`, async () => {
+    await next.stop()
+
+    await next.patchFile(
+      'pages/index.jsx',
+      `
+      import Link from 'next/link'
+
+      export default function Page() {
+        return <Link href='https://example.com'><div>Hello World!</div></Link>
+      }
+    `
+    )
+    await next.patchFile(
+      'next.config.js',
+      `
+      module.exports = { experimental: { newNextLinkBehavior: true } }
+    `
+    )
+
+    await next.start()
+  })
+})