diff --git a/sdk/core/azure-core/CHANGELOG.md b/sdk/core/azure-core/CHANGELOG.md
index 7d96da393c..c89674e3df 100644
--- a/sdk/core/azure-core/CHANGELOG.md
+++ b/sdk/core/azure-core/CHANGELOG.md
@@ -8,6 +8,8 @@
 
 ### Bugs Fixed
 
+- Updated field type `CurlTransportOptions.Proxy` from `std::string` to `Azure::Nullable<std::string>`. This change allow to se an empty string to make libcurl ignore proxy settings from environment [](https://github.com/Azure/azure-sdk-for-cpp/issues/3537).
+
 ### Other Changes
 
 ## 1.5.0 (2022-03-31)
diff --git a/sdk/core/azure-core/inc/azure/core/http/curl_transport.hpp b/sdk/core/azure-core/inc/azure/core/http/curl_transport.hpp
index 87f2258a31..a06fac3499 100644
--- a/sdk/core/azure-core/inc/azure/core/http/curl_transport.hpp
+++ b/sdk/core/azure-core/inc/azure/core/http/curl_transport.hpp
@@ -49,7 +49,11 @@ namespace Azure { namespace Core { namespace Http {
   struct CurlTransportOptions final
   {
     /**
-     * @brief The string for the proxy is passed directly to the libcurl handle without any parsing
+     * @brief The string for the proxy is passed directly to the libcurl handle without any parsing.
+     *
+     * @details libcurl will use system's environment proxy configuration (if it is set) when the \p
+     * Proxy setting is not set (is null). Setting an empty string will make libcurl to ignore any
+     * proxy settings from the system (use no proxy).
      *
      * @remark No validation for the string is done by the Azure SDK. More about this option:
      * https://curl.haxx.se/libcurl/c/CURLOPT_PROXY.html.
@@ -57,7 +61,7 @@ namespace Azure { namespace Core { namespace Http {
      * @remark The default value is an empty string (no proxy).
      *
      */
-    std::string Proxy;
+    Azure::Nullable<std::string> Proxy;
     /**
      * @brief The string for the certificate authenticator is sent to libcurl handle directly.
      *
diff --git a/sdk/core/azure-core/src/http/curl/curl.cpp b/sdk/core/azure-core/src/http/curl/curl.cpp
index 0eff964099..493f77e677 100644
--- a/sdk/core/azure-core/src/http/curl/curl.cpp
+++ b/sdk/core/azure-core/src/http/curl/curl.cpp
@@ -1225,7 +1225,7 @@ inline std::string GetConnectionKey(std::string const& host, CurlTransportOption
 {
   std::string key(host);
   key.append(!options.CAInfo.empty() ? options.CAInfo : "0");
-  key.append(!options.Proxy.empty() ? options.Proxy : "0");
+  key.append(options.Proxy ? (options.Proxy->empty() ? "NoProxy" : options.Proxy.Value()) : "0");
   key.append(!options.SslOptions.EnableCertificateRevocationListCheck ? "1" : "0");
   key.append(options.SslVerifyPeer ? "1" : "0");
   key.append(options.NoSignal ? "1" : "0");
@@ -1356,13 +1356,13 @@ std::unique_ptr<CurlNetworkConnection> CurlConnectionPool::ExtractOrCreateCurlCo
   /******************** Curl handle options apply to all connections created
    * The keepAlive option is managed by the session directly.
    */
-  if (!options.Proxy.empty())
+  if (options.Proxy)
   {
-    if (!SetLibcurlOption(newHandle, CURLOPT_PROXY, options.Proxy.c_str(), &result))
+    if (!SetLibcurlOption(newHandle, CURLOPT_PROXY, options.Proxy->c_str(), &result))
     {
       throw Azure::Core::Http::TransportException(
           _detail::DefaultFailedToGetNewConnectionTemplate + hostDisplayName
-          + ". Failed to set proxy to:" + options.Proxy + ". "
+          + ". Failed to set proxy to:" + options.Proxy.Value() + ". "
           + std::string(curl_easy_strerror(result)));
     }
   }