diff --git a/doc/overlays.xml b/doc/overlays.xml
index d194c6bfc892..abaa264addb7 100644
--- a/doc/overlays.xml
+++ b/doc/overlays.xml
@@ -13,8 +13,8 @@ to bind the dependencies of all packages.</para>
 <section xml:id="sec-overlays-install">
 <title>Installing Overlays</title>
 
-<para>Overlays are looked for in the following order, the first valid one is
-considered, and all the rest are ignored:
+<para>The set of overlays are looked for in the following order, only the
+first one present is considered, and all the rest are ignored:
 
 <orderedlist>
 
diff --git a/pkgs/top-level/impure.nix b/pkgs/top-level/impure.nix
index 1aa55f7293ba..60a55c657c0c 100644
--- a/pkgs/top-level/impure.nix
+++ b/pkgs/top-level/impure.nix
@@ -31,7 +31,9 @@
         let content = readDir dir; in
         map (n: import "${dir}/${n}") (sort lessThan (attrNames content));
     in
-      if dirCheck dirEnv then overlays dirEnv
+      if dirEnv != "" then
+        if dirCheck dirEnv then overlays dirEnv
+        else throw "The environment variable NIXPKGS_OVERLAYS does not name a valid directory."
       else if dirCheck dirHome then overlays dirHome
       else []