The memory available for environment variables is limited. If requesting memory beyond the limit the following error is given:

Out of environment space

Not Enough Environment Space

The limit can be increased (In trade for Conventional memory) by editing the CONFIG.SYS and insert/update this line:

REM The /E:1024 assigns 1024 bytes to SET which allows one
REM to store all the 3DFX Voodoo glide settings and others
SHELL=C:\COMMAND.COM C:\ /E:1024 /P

More Info MS KB105668
More Info MS KB161564
More Info MS KB230205
More Info MS KB261825