diff --git a/sdk/identity/azure-identity/CHANGELOG.md b/sdk/identity/azure-identity/CHANGELOG.md
index 3eb0e5a1aea1..4a2d4f98bd15 100644
--- a/sdk/identity/azure-identity/CHANGELOG.md
+++ b/sdk/identity/azure-identity/CHANGELOG.md
@@ -10,6 +10,7 @@
 ### Breaking Changes
 
 ### Bugs Fixed
+- Fixed `AzureDeveloperCliCredential` hanging when `AZD_DEBUG` environment variable is set by adding `--no-prompt` flag to the `azd auth token` command.
 
 ### Other Changes
 
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClient.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClient.java
index a9c3d353030c..8eab7aec9e97 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClient.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClient.java
@@ -337,7 +337,7 @@ public Mono<AccessToken> authenticateWithAzureCli(TokenRequestContext request) {
      * @return a Publisher that emits an AccessToken
      */
     public Mono<AccessToken> authenticateWithAzureDeveloperCli(TokenRequestContext request) {
-        StringBuilder azdCommand = new StringBuilder("azd auth token --output json --scope ");
+        StringBuilder azdCommand = new StringBuilder("azd auth token --output json --no-prompt --scope ");
         List<String> scopes = request.getScopes();
 
         // It's really unlikely that the request comes with no scope, but we want to
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentitySyncClient.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentitySyncClient.java
index 8b5115fe2855..5f7d0e92f8ba 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentitySyncClient.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentitySyncClient.java
@@ -401,7 +401,7 @@ public AccessToken authenticateWithAzureCli(TokenRequestContext request) {
      */
     public AccessToken authenticateWithAzureDeveloperCli(TokenRequestContext request) {
 
-        StringBuilder azdCommand = new StringBuilder("azd auth token --output json --scope ");
+        StringBuilder azdCommand = new StringBuilder("azd auth token --output json --no-prompt --scope ");
 
         List<String> scopes = request.getScopes();