diff --git a/src/lightning/pytorch/CHANGELOG.md b/src/lightning/pytorch/CHANGELOG.md
index 8dcec7db41..eff633558b 100644
--- a/src/lightning/pytorch/CHANGELOG.md
+++ b/src/lightning/pytorch/CHANGELOG.md
@@ -126,6 +126,9 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
 - Fixed a formatting issue when the filename in `ModelCheckpoint` contained metrics that were substrings of each other ([#17610](https://github.com/Lightning-AI/lightning/pull/17610))
 
 
+- Fixed `WandbLogger` ignoring the `WANDB_PROJECT` environment variable ([#16222](https://github.com/Lightning-AI/lightning/pull/16222))
+
+
 ## [2.0.1.post0] - 2023-04-11
 
 ### Fixed
diff --git a/src/lightning/pytorch/loggers/wandb.py b/src/lightning/pytorch/loggers/wandb.py
index 10570bbbc2..d5f928bd8e 100644
--- a/src/lightning/pytorch/loggers/wandb.py
+++ b/src/lightning/pytorch/loggers/wandb.py
@@ -260,7 +260,8 @@ class WandbLogger(Logger):
         dir: Same as save_dir.
         id: Same as version.
         anonymous: Enables or explicitly disables anonymous logging.
-        project: The name of the project to which this run will belong.
+        project: The name of the project to which this run will belong. If not set, the environment variable
+            `WANDB_PROJECT` will be used as a fallback. If both are not set, it defaults to ``'lightning_logs'``.
         log_model: Log checkpoints created by :class:`~lightning.pytorch.callbacks.ModelCheckpoint`
             as W&B artifacts. `latest` and `best` aliases are automatically set.
 
@@ -293,7 +294,7 @@ class WandbLogger(Logger):
         dir: Optional[_PATH] = None,
         id: Optional[str] = None,
         anonymous: Optional[bool] = None,
-        project: str = "lightning_logs",
+        project: Optional[str] = None,
         log_model: Union[str, bool] = False,
         experiment: Union[Run, RunDisabled, None] = None,
         prefix: str = "",
@@ -334,6 +335,8 @@ class WandbLogger(Logger):
         elif dir is not None:
             dir = os.fspath(dir)
 
+        project = project or os.environ.get("WANDB_PROJECT", "lightning_logs")
+
         # set wandb init arguments
         self._wandb_init: Dict[str, Any] = {
             "name": name,
diff --git a/tests/tests_pytorch/loggers/test_wandb.py b/tests/tests_pytorch/loggers/test_wandb.py
index b90581d443..e221326547 100644
--- a/tests/tests_pytorch/loggers/test_wandb.py
+++ b/tests/tests_pytorch/loggers/test_wandb.py
@@ -29,10 +29,20 @@ from lightning.pytorch.utilities.exceptions import MisconfigurationException
 @mock.patch("lightning.pytorch.loggers.wandb.Run", new=mock.Mock)
 @mock.patch("lightning.pytorch.loggers.wandb.wandb")
 def test_wandb_project_name(*_):
-    logger = WandbLogger()
+    with mock.patch.dict(os.environ, {}):
+        logger = WandbLogger()
     assert logger.name == "lightning_logs"
 
-    logger = WandbLogger(project="project")
+    with mock.patch.dict(os.environ, {}):
+        logger = WandbLogger(project="project")
+    assert logger.name == "project"
+
+    with mock.patch.dict(os.environ, {"WANDB_PROJECT": "env_project"}):
+        logger = WandbLogger()
+    assert logger.name == "env_project"
+
+    with mock.patch.dict(os.environ, {"WANDB_PROJECT": "env_project"}):
+        logger = WandbLogger(project="project")
     assert logger.name == "project"