diff --git a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/KotlinToolRunner.kt b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/KotlinToolRunner.kt
index a35426d03bc..e1c16e971cb 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/KotlinToolRunner.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/KotlinToolRunner.kt
@@ -21,11 +21,11 @@ internal abstract class KotlinToolRunner(
     abstract val mainClass: String
     open val daemonEntryPoint: String get() = "main"
 
-    open val environment: Map<String, String> = emptyMap()
-    open val environmentBlacklist: Set<String> = emptySet()
+    open val execEnvironment: Map<String, String> = emptyMap()
+    open val execEnvironmentBlacklist: Set<String> = emptySet()
 
-    open val systemProperties: Map<String, String> = emptyMap()
-    open val systemPropertiesBlacklist: Set<String> = setOf("java.endorsed.dirs")
+    open val execSystemProperties: Map<String, String> = emptyMap()
+    open val execSystemPropertiesBlacklist: Set<String> = setOf("java.endorsed.dirs")
 
     abstract val classpath: Set<File>
     open fun checkClasspath(): Unit = check(classpath.isNotEmpty()) { "Classpath of the tool is empty: $displayName" }
@@ -79,21 +79,19 @@ internal abstract class KotlinToolRunner(
             spec.systemProperties(
                 System.getProperties().asSequence()
                     .map { (k, v) -> k.toString() to v.toString() }
-                    .filter { (k, _) -> k !in systemPropertiesBlacklist }
+                    .filter { (k, _) -> k !in execSystemPropertiesBlacklist }
                     .escapeQuotesForWindows()
                     .toMap()
             )
-            spec.systemProperties(systemProperties)
-            environmentBlacklist.forEach { spec.environment.remove(it) }
-            spec.environment(environment)
+            spec.systemProperties(execSystemProperties)
+            execEnvironmentBlacklist.forEach { spec.environment.remove(it) }
+            spec.environment(execEnvironment)
             spec.args(transformArgs(args))
         }
     }
 
     // TODO: Make it private again once KT-37550 is fixed.
     protected open fun runInProcess(args: List<String>) {
-        val oldProperties = setUpSystemProperties()
-
         try {
             val mainClass = getIsolatedClassLoader().loadClass(mainClass)
             val entryPoint = mainClass.methods.single { it.name == daemonEntryPoint }
@@ -101,32 +99,6 @@ internal abstract class KotlinToolRunner(
             entryPoint.invoke(null, transformArgs(args).toTypedArray())
         } catch (t: InvocationTargetException) {
             throw t.targetException
-        } finally {
-            restoreSystemProperties(oldProperties)
-        }
-    }
-
-    private fun setUpSystemProperties(): Map<String, String?> {
-        val oldProperties = mutableMapOf<String, String?>()
-
-        systemProperties.forEach { (k, v) -> oldProperties[k] = System.getProperty(v) }
-
-        System.getProperties().toList()
-            .map { (k, v) -> k.toString() to v.toString() }
-            .filter { (k, _) -> k in systemPropertiesBlacklist }
-            .forEach { (k, v) ->
-                oldProperties[k] = v
-                System.clearProperty(k)
-            }
-
-        systemProperties.forEach { (k, v) -> System.setProperty(k, v) }
-
-        return oldProperties
-    }
-
-    private fun restoreSystemProperties(oldProperties: Map<String, String?>) {
-        oldProperties.forEach { (k, v) ->
-            if (v == null) System.clearProperty(k) else System.setProperty(k, v)
         }
     }
 
diff --git a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/nativeToolRunners.kt b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/nativeToolRunners.kt
index 565716bffb6..613a8bf70ce 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/nativeToolRunners.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/main/kotlin/org/jetbrains/kotlin/compilerRunner/nativeToolRunners.kt
@@ -9,6 +9,7 @@ import org.gradle.api.Project
 import org.jetbrains.kotlin.cli.common.messages.MessageRenderer
 import org.jetbrains.kotlin.gradle.dsl.NativeCacheKind
 import org.jetbrains.kotlin.gradle.plugin.PropertiesProvider
+import org.jetbrains.kotlin.gradle.plugin.mpp.isAtLeast
 import org.jetbrains.kotlin.gradle.utils.NativeCompilerDownloader
 import org.jetbrains.kotlin.konan.CompilerVersion
 import org.jetbrains.kotlin.konan.target.HostManager
@@ -43,8 +44,7 @@ internal abstract class KotlinNativeToolRunner(
     final override val daemonEntryPoint get() = "daemonMain"
 
     // We need to unset some environment variables which are set by XCode and may potentially affect the tool executed.
-    override val environment = mapOf("LIBCLANG_DISABLE_CRASH_RECOVERY" to "1")
-    final override val environmentBlacklist: Set<String> by lazy {
+    final override val execEnvironmentBlacklist: Set<String> by lazy {
         HashSet<String>().also { collector ->
             KotlinNativeToolRunner::class.java.getResourceAsStream("/env_blacklist")?.let { stream ->
                 stream.reader().use { r -> r.forEachLine { collector.add(it) } }
@@ -52,11 +52,17 @@ internal abstract class KotlinNativeToolRunner(
         }
     }
 
-    final override val systemProperties by lazy {
-        mapOf(
-            "konan.home" to project.konanHome,
-            MessageRenderer.PROPERTY_KEY to MessageRenderer.GRADLE_STYLE.name
-        )
+    final override val execSystemProperties by lazy {
+        // Still set konan.home for versions prior to 1.4-M3.
+        val konanHomeRequired = project.konanVersion.let {
+            !it.isAtLeast(1, 4, 0) ||
+                    it.toString(showMeta = false, showBuild = false) in listOf("1.4-M1", "1.4-M2")
+        }
+
+        listOfNotNull(
+                if (konanHomeRequired) "konan.home" to project.konanHome else null,
+                MessageRenderer.PROPERTY_KEY to MessageRenderer.GRADLE_STYLE.name
+        ).toMap()
     }
 
     final override val classpath by lazy {
@@ -127,12 +133,12 @@ internal abstract class KotlinNativeToolRunner(
 internal abstract class AbstractKotlinNativeCInteropRunner(toolName: String, project: Project) : KotlinNativeToolRunner(toolName, project) {
     override val mustRunViaExec get() = true
 
-    override val environment by lazy {
+    override val execEnvironment by lazy {
         val llvmExecutablesPath = llvmExecutablesPath
         if (llvmExecutablesPath != null)
-            super.environment + ("PATH" to "$llvmExecutablesPath;${System.getenv("PATH")}")
+            super.execEnvironment + ("PATH" to "$llvmExecutablesPath;${System.getenv("PATH")}")
         else
-            super.environment
+            super.execEnvironment
     }
 
     private val llvmExecutablesPath: String? by lazy {