diff --git a/changelog/change_rails_unknown_env_to_add_local.md b/changelog/change_rails_unknown_env_to_add_local.md
new file mode 100644
index 0000000000..795ec30513
--- /dev/null
+++ b/changelog/change_rails_unknown_env_to_add_local.md
@@ -0,0 +1 @@
+* [#893](https://github.com/rubocop/rubocop-rails/issues/893): Support `local` as an environment for `Rails/UnknownEnv` from Rails 7.1 onward. ([@ghiculescu][])
diff --git a/lib/rubocop/cop/rails/unknown_env.rb b/lib/rubocop/cop/rails/unknown_env.rb
index c3d8d467eb..854d8e5a79 100644
--- a/lib/rubocop/cop/rails/unknown_env.rb
+++ b/lib/rubocop/cop/rails/unknown_env.rb
@@ -86,7 +86,11 @@ def unknown_env_name?(name)
         end
 
         def environments
-          cop_config['Environments']
+          @environments ||= begin
+            e = cop_config['Environments']
+            e += ['local'] if target_rails_version >= 7.1
+            e
+          end
         end
       end
     end
diff --git a/spec/rubocop/cop/rails/unknown_env_spec.rb b/spec/rubocop/cop/rails/unknown_env_spec.rb
index 8819e9fd1e..6e9ae6de19 100644
--- a/spec/rubocop/cop/rails/unknown_env_spec.rb
+++ b/spec/rubocop/cop/rails/unknown_env_spec.rb
@@ -24,6 +24,8 @@
                     ^^^^^^^^^^^^^ Unknown environment `developpment`. Did you mean `development`?
           Rails.env.something?
                     ^^^^^^^^^^ Unknown environment `something`.
+          Rails.env.local?
+                    ^^^^^^ Unknown environment `local`.
         RUBY
       end
 
@@ -36,6 +38,9 @@
 
           'something' === Rails.env
           ^^^^^^^^^^^ Unknown environment `something`.
+
+          'local' === Rails.env
+          ^^^^^^^ Unknown environment `local`.
         RUBY
       end
     end
@@ -49,6 +54,9 @@
                     ^^^^^^^^^^^^^ Unknown environment `developpment`.
           Rails.env.something?
                     ^^^^^^^^^^ Unknown environment `something`.
+
+          Rails.env.local?
+                    ^^^^^^ Unknown environment `local`.
         RUBY
       end
 
@@ -61,6 +69,9 @@
 
           'something' === Rails.env
           ^^^^^^^^^^^ Unknown environment `something`.
+
+          'local' === Rails.env
+          ^^^^^^^ Unknown environment `local`.
         RUBY
       end
     end
@@ -72,4 +83,30 @@
       Rails.env == 'production'
     RUBY
   end
+
+  context 'Rails 7.1' do
+    let(:config) do
+      RuboCop::Config.new(
+        {
+          'AllCops' => {
+            'TargetRailsVersion' => '7.1'
+          },
+          'Rails/UnknownEnv' => {
+            'Environments' => %w[
+              development
+              production
+              test
+            ]
+          }
+        }
+      )
+    end
+
+    it 'accepts local as an environment name on Rails 7.1' do
+      expect_no_offenses(<<~RUBY)
+        Rails.env.local?
+        Rails.env == 'local'
+      RUBY
+    end
+  end
 end