diff --git a/e2e/commands_test.go b/e2e/commands_test.go
index ec235d308..69bc8763b 100644
--- a/e2e/commands_test.go
+++ b/e2e/commands_test.go
@@ -103,6 +103,56 @@ func TestRenderFormatters(t *testing.T) {
 	})
 }
 
+func checkFileWarning(t *testing.T, goldenFile, composeData string) {
+	cmd, cleanup := dockerCli.createTestCmd()
+	defer cleanup()
+
+	tmpDir := fs.NewDir(t, "app_input",
+		fs.WithFile(internal.ComposeFileName, composeData),
+	)
+	defer tmpDir.Remove()
+
+	cmd.Dir = tmpDir.Path()
+	cmd.Command = dockerCli.Command("app", "init", "app-test",
+		"--compose-file", tmpDir.Join(internal.ComposeFileName))
+	stdErr := icmd.RunCmd(cmd).Assert(t, icmd.Success).Stderr()
+	golden.Assert(t, stdErr, goldenFile)
+}
+
+func TestInitWarningEnvFiles(t *testing.T) {
+	testCases := []struct {
+		name    string
+		golden  string
+		compose string
+	}{
+		{
+			name:   "initWarningMultipleEnvFilesTest",
+			golden: "init-output-warning-single-envfile.golden",
+			compose: `version: "3.2"
+services:
+  nginx:
+    image: nginx:latest
+    env_file: myenv1.env`,
+		},
+		{
+			name:   "initWarningMultipleEnvFilesTest",
+			golden: "init-output-warning-multiple-envfiles.golden",
+			compose: `version: "3.2"
+services:
+  nginx:
+    image: nginx:latest
+    env_file:
+     - myenv1.env
+     - myenv2.env`,
+		},
+	}
+	for _, test := range testCases {
+		t.Run(test.name, func(t *testing.T) {
+			checkFileWarning(t, test.golden, test.compose)
+		})
+	}
+}
+
 func TestInit(t *testing.T) {
 	cmd, cleanup := dockerCli.createTestCmd()
 	defer cleanup()
diff --git a/e2e/testdata/init-output-warning-multiple-envfiles.golden b/e2e/testdata/init-output-warning-multiple-envfiles.golden
new file mode 100644
index 000000000..f3deff231
--- /dev/null
+++ b/e2e/testdata/init-output-warning-multiple-envfiles.golden
@@ -0,0 +1,2 @@
+nginx.env_file "myenv1.env" will not be copied into app-test.dockerapp. Please copy it manually and update the path accordingly in the compose file.
+nginx.env_file "myenv2.env" will not be copied into app-test.dockerapp. Please copy it manually and update the path accordingly in the compose file.
diff --git a/e2e/testdata/init-output-warning-single-envfile.golden b/e2e/testdata/init-output-warning-single-envfile.golden
new file mode 100644
index 000000000..1a3cab519
--- /dev/null
+++ b/e2e/testdata/init-output-warning-single-envfile.golden
@@ -0,0 +1 @@
+nginx.env_file "myenv1.env" will not be copied into app-test.dockerapp. Please copy it manually and update the path accordingly in the compose file.
diff --git a/internal/commands/init.go b/internal/commands/init.go
index bcfa976eb..9a02f3ea3 100644
--- a/internal/commands/init.go
+++ b/internal/commands/init.go
@@ -21,7 +21,7 @@ func initCmd(dockerCli command.Cli) *cobra.Command {
 $ docker app init myapp --compose-file docker-compose.yml`,
 		Args: cli.ExactArgs(1),
 		RunE: func(cmd *cobra.Command, args []string) error {
-			created, err := packager.Init(args[0], initComposeFile)
+			created, err := packager.Init(dockerCli.Err(), args[0], initComposeFile)
 			if err != nil {
 				return err
 			}
diff --git a/internal/packager/init.go b/internal/packager/init.go
index 8a71a24ed..1f3f02bce 100644
--- a/internal/packager/init.go
+++ b/internal/packager/init.go
@@ -3,6 +3,7 @@ package packager
 import (
 	"bytes"
 	"fmt"
+	"io"
 	"io/ioutil"
 	"os"
 	"os/user"
@@ -27,7 +28,7 @@ import (
 // Init is the entrypoint initialization function.
 // It generates a new application definition based on the provided parameters
 // and returns the path to the created application definition.
-func Init(name string, composeFile string) (string, error) {
+func Init(errWriter io.Writer, name string, composeFile string) (string, error) {
 	if err := internal.ValidateAppName(name); err != nil {
 		return "", err
 	}
@@ -48,7 +49,7 @@ func Init(name string, composeFile string) (string, error) {
 	if composeFile == "" {
 		err = initFromScratch(name)
 	} else {
-		err = initFromComposeFile(name, composeFile)
+		err = initFromComposeFile(errWriter, name, composeFile)
 	}
 	if err != nil {
 		return "", err
@@ -79,22 +80,52 @@ func checkComposeFileVersion(compose map[string]interface{}) error {
 	return schema.Validate(compose, fmt.Sprintf("%v", version))
 }
 
-func initFromComposeFile(name string, composeFile string) error {
-	logrus.Debugf("Initializing from compose file %s", composeFile)
-
-	dirName := internal.DirNameFromAppName(name)
-
-	composeRaw, err := ioutil.ReadFile(composeFile)
-	if err != nil {
-		return errors.Wrap(err, "failed to read compose file")
+func getEnvFiles(svcName string, envFileEntry interface{}) ([]string, error) {
+	var envFiles []string
+	switch envFileEntry.(type) {
+	case string:
+		envFiles = append(envFiles, envFileEntry.(string))
+	case []interface{}:
+		for _, env := range envFileEntry.([]interface{}) {
+			envFiles = append(envFiles, env.(string))
+		}
+	default:
+		return nil, fmt.Errorf("unknown entries in 'env_file' for service %s -> %v",
+			svcName, envFileEntry)
 	}
-	cfgMap, err := composeloader.ParseYAML(composeRaw)
-	if err != nil {
-		return errors.Wrap(err, "failed to parse compose file")
+	return envFiles, nil
+}
+
+func checkEnvFiles(errWriter io.Writer, appName string, cfgMap map[string]interface{}) error {
+	services := cfgMap["services"]
+	servicesMap, ok := services.(map[string]interface{})
+	if !ok {
+		return fmt.Errorf("invalid Compose file")
 	}
-	if err := checkComposeFileVersion(cfgMap); err != nil {
-		return err
+	for svcName, svc := range servicesMap {
+		svcContent, ok := svc.(map[string]interface{})
+		if !ok {
+			return fmt.Errorf("invalid service %q", svcName)
+		}
+		envFileEntry, ok := svcContent["env_file"]
+		if !ok {
+			continue
+		}
+		envFiles, err := getEnvFiles(svcName, envFileEntry)
+		if err != nil {
+			return errors.Wrap(err, "invalid Compose file")
+		}
+		for _, envFilePath := range envFiles {
+			fmt.Fprintf(errWriter,
+				"%s.env_file %q will not be copied into %s.dockerapp. "+
+					"Please copy it manually and update the path accordingly in the compose file.\n",
+				svcName, envFilePath, appName)
+		}
 	}
+	return nil
+}
+
+func getParamsFromDefaultEnvFile(composeFile string, composeRaw []byte) (map[string]string, bool, error) {
 	params := make(map[string]string)
 	envs, err := opts.ParseEnvFile(filepath.Join(filepath.Dir(composeFile), ".env"))
 	if err == nil {
@@ -107,7 +138,7 @@ func initFromComposeFile(name string, composeFile string) error {
 	}
 	vars, err := compose.ExtractVariables(composeRaw, compose.ExtrapolationPattern)
 	if err != nil {
-		return errors.Wrap(err, "failed to parse compose file")
+		return nil, false, errors.Wrap(err, "failed to parse compose file")
 	}
 	needsFilling := false
 	for k, v := range vars {
@@ -120,6 +151,32 @@ func initFromComposeFile(name string, composeFile string) error {
 			}
 		}
 	}
+	return params, needsFilling, nil
+}
+
+func initFromComposeFile(errWriter io.Writer, name string, composeFile string) error {
+	logrus.Debugf("Initializing from compose file %s", composeFile)
+
+	dirName := internal.DirNameFromAppName(name)
+
+	composeRaw, err := ioutil.ReadFile(composeFile)
+	if err != nil {
+		return errors.Wrapf(err, "failed to read compose file %q", composeFile)
+	}
+	cfgMap, err := composeloader.ParseYAML(composeRaw)
+	if err != nil {
+		return errors.Wrap(err, "failed to parse compose file")
+	}
+	if err := checkComposeFileVersion(cfgMap); err != nil {
+		return err
+	}
+	if err := checkEnvFiles(errWriter, name, cfgMap); err != nil {
+		return err
+	}
+	params, needsFilling, err := getParamsFromDefaultEnvFile(composeFile, composeRaw)
+	if err != nil {
+		return err
+	}
 	expandedParams, err := parameters.FromFlatten(params)
 	if err != nil {
 		return errors.Wrap(err, "failed to expand parameters")
diff --git a/internal/packager/init_test.go b/internal/packager/init_test.go
index 767670bb0..b809b3fff 100644
--- a/internal/packager/init_test.go
+++ b/internal/packager/init_test.go
@@ -32,7 +32,7 @@ services:
 	)
 	defer dir.Remove()
 
-	err := initFromComposeFile(dir.Join(appName), inputDir.Join(internal.ComposeFileName))
+	err := initFromComposeFile(nil, dir.Join(appName), inputDir.Join(internal.ComposeFileName))
 	assert.NilError(t, err)
 
 	manifest := fs.Expected(
@@ -73,7 +73,7 @@ services:
 	)
 	defer dir.Remove()
 
-	err := initFromComposeFile(dir.Join(appName), inputDir.Join(internal.ComposeFileName))
+	err := initFromComposeFile(nil, dir.Join(appName), inputDir.Join(internal.ComposeFileName))
 	assert.NilError(t, err)
 
 	const expectedParameters = `ports:
@@ -108,7 +108,7 @@ services:
 }
 
 func TestInitFromInvalidComposeFile(t *testing.T) {
-	err := initFromComposeFile("my.dockerapp", "doesnotexist")
+	err := initFromComposeFile(nil, "my.dockerapp", "doesnotexist")
 	assert.ErrorContains(t, err, "failed to read")
 }
 
@@ -131,7 +131,7 @@ services:
 	)
 	defer dir.Remove()
 
-	err := initFromComposeFile(dir.Join(appName), inputDir.Join(internal.ComposeFileName))
+	err := initFromComposeFile(nil, dir.Join(appName), inputDir.Join(internal.ComposeFileName))
 	assert.ErrorContains(t, err, "unsupported Compose file version")
 }
 
@@ -151,7 +151,7 @@ nginx:
 	)
 	defer dir.Remove()
 
-	err := initFromComposeFile(dir.Join(appName), inputDir.Join(internal.ComposeFileName))
+	err := initFromComposeFile(nil, dir.Join(appName), inputDir.Join(internal.ComposeFileName))
 	assert.ErrorContains(t, err, "unsupported Compose file version")
 }