diff --git a/sdk/core/azure-core/CHANGELOG.md b/sdk/core/azure-core/CHANGELOG.md
index 10db05b94691..eff0fbbbaacf 100644
--- a/sdk/core/azure-core/CHANGELOG.md
+++ b/sdk/core/azure-core/CHANGELOG.md
@@ -1,14 +1,10 @@
 # Release History
 
-## 1.38.4 (Unreleased)
-
-### Features Added
+## 1.39.0 (2026-03-18)
 
 ### Breaking Changes
 
-### Bugs Fixed
-
-### Other Changes
+- Changed the previously undocumented `azure_cloud` setting environment variable from `AZURE_CLOUD` to `AZURE_SDK_CLOUD_CONF`.
 
 ## 1.38.3 (2026-03-12)
 
diff --git a/sdk/core/azure-core/azure/core/_version.py b/sdk/core/azure-core/azure/core/_version.py
index d2ec0ea68682..719c80b3ffe7 100644
--- a/sdk/core/azure-core/azure/core/_version.py
+++ b/sdk/core/azure-core/azure/core/_version.py
@@ -9,4 +9,4 @@
 # regenerated.
 # --------------------------------------------------------------------------
 
-VERSION = "1.38.4"
+VERSION = "1.39.0"
diff --git a/sdk/core/azure-core/azure/core/settings.py b/sdk/core/azure-core/azure/core/settings.py
index a3640d8c0cbb..8ba3ee4a80d3 100644
--- a/sdk/core/azure-core/azure/core/settings.py
+++ b/sdk/core/azure-core/azure/core/settings.py
@@ -527,7 +527,7 @@ def _config(self, props: Mapping[str, Any]) -> Tuple[Any, ...]:
 
     azure_cloud: PrioritizedSetting[Union[str, AzureClouds], AzureClouds] = PrioritizedSetting(
         "azure_cloud",
-        env_var="AZURE_CLOUD",
+        env_var="AZURE_SDK_CLOUD_CONF",
         convert=convert_azure_cloud,
         default=AzureClouds.AZURE_PUBLIC_CLOUD,
     )
diff --git a/sdk/core/azure-core/tests/test_settings.py b/sdk/core/azure-core/tests/test_settings.py
index 1958533dd7a9..17e4ee2313b7 100644
--- a/sdk/core/azure-core/tests/test_settings.py
+++ b/sdk/core/azure-core/tests/test_settings.py
@@ -269,8 +269,8 @@ def test_current(self):
         assert isinstance(val, tuple)
         assert val.log_level == 10
         del os.environ["AZURE_LOG_LEVEL"]
-        os.environ["AZURE_CLOUD"] = "AZURE_CHINA_CLOUD"
+        os.environ["AZURE_SDK_CLOUD_CONF"] = "AZURE_CHINA_CLOUD"
         val = m.settings.current
         assert isinstance(val, tuple)
         assert val.azure_cloud == AzureClouds.AZURE_CHINA_CLOUD
-        del os.environ["AZURE_CLOUD"]
+        del os.environ["AZURE_SDK_CLOUD_CONF"]