diff --git a/acceptance/bundle/exec/databricks-cli/basic/databricks.yml b/acceptance/bundle/exec/databricks-cli/target-is-passed/databricks.yml
similarity index 100%
rename from acceptance/bundle/exec/databricks-cli/basic/databricks.yml
rename to acceptance/bundle/exec/databricks-cli/target-is-passed/databricks.yml
diff --git a/acceptance/bundle/exec/databricks-cli/basic/out.requests.txt b/acceptance/bundle/exec/databricks-cli/target-is-passed/out.requests.txt
similarity index 100%
rename from acceptance/bundle/exec/databricks-cli/basic/out.requests.txt
rename to acceptance/bundle/exec/databricks-cli/target-is-passed/out.requests.txt
diff --git a/acceptance/bundle/exec/databricks-cli/basic/output.txt b/acceptance/bundle/exec/databricks-cli/target-is-passed/output.txt
similarity index 100%
rename from acceptance/bundle/exec/databricks-cli/basic/output.txt
rename to acceptance/bundle/exec/databricks-cli/target-is-passed/output.txt
diff --git a/acceptance/bundle/exec/databricks-cli/basic/script b/acceptance/bundle/exec/databricks-cli/target-is-passed/script
similarity index 100%
rename from acceptance/bundle/exec/databricks-cli/basic/script
rename to acceptance/bundle/exec/databricks-cli/target-is-passed/script
diff --git a/bundle/config/mutator/default_target.go b/bundle/config/mutator/default_target.go
index 73d99002a..781c075ec 100644
--- a/bundle/config/mutator/default_target.go
+++ b/bundle/config/mutator/default_target.go
@@ -13,11 +13,13 @@ type defineDefaultTarget struct {
 	name string
 }
 
+const DefaultTargetName = "default"
+
 // DefineDefaultTarget adds a target named "default"
 // to the configuration if none have been defined.
 func DefineDefaultTarget() bundle.Mutator {
 	return &defineDefaultTarget{
-		name: "default",
+		name: DefaultTargetName,
 	}
 }
 
diff --git a/cmd/bundle/exec.go b/cmd/bundle/exec.go
index b5a52f609..acf914f59 100644
--- a/cmd/bundle/exec.go
+++ b/cmd/bundle/exec.go
@@ -7,6 +7,7 @@ import (
 	"strings"
 	"sync"
 
+	"github.com/databricks/cli/bundle/config/mutator"
 	"github.com/databricks/cli/cmd/root"
 	"github.com/databricks/cli/libs/auth"
 	"github.com/spf13/cobra"
@@ -63,19 +64,24 @@ Examples:
 			childCmd := exec.Command(args[0], args[1:]...)
 
 			env := auth.ProcessEnv(root.ConfigUsed(cmd.Context()))
-			// TODO: Test that this works correctly for all permutations.
-			// TODO: Do the same for profile flag.
-			// TODO: TODO: What happens here if a default target is resolved? When
-			// no targets are defined?
-			env = append(env, "DATABRICKS_BUNDLE_TARGET="+b.Config.Bundle.Target)
+
+			// If user has specified a target, pass it to the child command. If the
+			// target is the default target, we don't need to pass it explicitly since
+			// the CLI will use the default target by default.
+			// This is only useful for when the Databricks CLI is the child command.
+			if b.Config.Bundle.Target != mutator.DefaultTargetName {
+				env = append(env, "DATABRICKS_BUNDLE_TARGET="+b.Config.Bundle.Target)
+			}
 
 			// If the bundle has a profile, explicitly pass it to the child command.
 			// This is unnecessary for tools that follow the unified authentication spec.
 			// However, because the CLI can read the profile from the bundle itself, we
 			// need to pass it explicitly.
+			// This is only useful for when the Databricks CLI is the child command.
 			if b.Config.Workspace.Profile != "" {
 				env = append(env, "DATABRICKS_CONFIG_PROFILE="+b.Config.Workspace.Profile)
 			}
+
 			childCmd.Env = env
 
 			// Execute all scripts from the bundle root directory. This behavior can