diff --git a/CHANGELOG.md b/CHANGELOG.md
index e5f25414..9dcc8110 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@ project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 
 ### Fixed
 
+- `${name:-default}` now uses the default when `name` is empty. `b=` followed by `a=${b:-d}` yields `d` instead of an empty string. ([#715])
 - Fix a package build deprecation warning caused by a non-string `license` value in `pyproject.toml` by [@kurtmckee] in [#648]
 - `set_key`, `unset_key` and the `dotenv set`/`unset` commands now name the `.env` path instead of an internal temporary file when its directory is missing or not writable, and the CLI prints a short error and exits with code 2 instead of a traceback by [@jamalkamaladdin] in [#711]
 - `set_key` and `unset_key` no longer leave a `.tmp_*` file behind on Windows when writing a read-only `.env` fails, and the error raised is the one from the failed write rather than from cleaning up the temporary file by [@MohammedAlkindi] in [#686]
diff --git a/src/dotenv/variables.py b/src/dotenv/variables.py
index 667f2f26..32c18711 100644
--- a/src/dotenv/variables.py
+++ b/src/dotenv/variables.py
@@ -62,9 +62,14 @@ def __hash__(self) -> int:
         return hash((self.__class__, self.name, self.default))
 
     def resolve(self, env: Mapping[str, Optional[str]]) -> str:
-        default = self.default if self.default is not None else ""
-        result = env.get(self.name, default)
-        return result if result is not None else ""
+        # ${name:-default} uses the default when name is missing or empty.
+        # ${name} has no default, so those cases stay empty.
+        result = env.get(self.name)
+        if result:
+            return result
+        if self.default is not None:
+            return self.default
+        return result or ""
 
 
 def parse_variables(value: str) -> Iterator[Atom]:
diff --git a/tests/test_main.py b/tests/test_main.py
index 930ab171..a3c460b3 100644
--- a/tests/test_main.py
+++ b/tests/test_main.py
@@ -894,6 +894,9 @@ def test_dotenv_values_file(dotenv_path):
         # Undefined
         ({}, "a=${b}", True, {"a": ""}),
         ({}, "a=${b:-d}", True, {"a": "d"}),
+        # Empty is unset for the :- form
+        ({"b": ""}, "a=${b:-d}", True, {"a": "d"}),
+        ({}, "b=\na=${b:-d}", True, {"a": "d", "b": ""}),
         # With quotes
         ({"b": "c"}, 'a="${b}"', True, {"a": "c"}),
         ({"b": "c"}, "a='${b}'", True, {"a": "c"}),
diff --git a/tests/test_variables.py b/tests/test_variables.py
index 6f2b2203..bdb0b05e 100644
--- a/tests/test_variables.py
+++ b/tests/test_variables.py
@@ -33,3 +33,10 @@ def test_parse_variables(value, expected):
     result = parse_variables(value)
 
     assert list(result) == expected
+
+
+def test_empty_value_uses_default():
+    assert Variable(name="b", default="d").resolve({"b": ""}) == "d"
+    assert Variable(name="b", default="d").resolve({}) == "d"
+    assert Variable(name="b", default="d").resolve({"b": "c"}) == "c"
+    assert Variable(name="b", default=None).resolve({"b": ""}) == ""