diff --git a/lib/datadog/statsd/connection_cfg.rb b/lib/datadog/statsd/connection_cfg.rb
index c52b5a2..0259041 100644
--- a/lib/datadog/statsd/connection_cfg.rb
+++ b/lib/datadog/statsd/connection_cfg.rb
@@ -23,12 +23,25 @@ def make_connection(**params)
 
       private
 
+      ERROR_MESSAGE = "Valid environment variables combination for connection configuration:\n" +
+                      "  - DD_DOGSTATSD_URL for UDP or UDS connection.\n" +
+                      "     Example for UDP: DD_DOGSTATSD_URL='udp://localhost:8125'\n" +
+                      "     Example for UDS: DD_DOGSTATSD_URL='unix:///path/to/unix.sock'\n" +
+                      "  or\n" +
+                      "  - DD_AGENT_HOST and DD_DOGSTATSD_PORT for an UDP connection. E.g. DD_AGENT_HOST='localhost' DD_DOGSTATSD_PORT=8125\n" +
+                      "  or\n" +
+                      "  - DD_DOGSTATSD_SOCKET for an UDS connection: E.g. DD_DOGSTATSD_SOCKET='/path/to/unix.sock'\n" +
+                      " Note that DD_DOGSTATSD_URL has priority on other environment variables."
+
       DEFAULT_HOST = '127.0.0.1'
       DEFAULT_PORT = 8125
 
+      UDP_PREFIX = 'udp://'
+      UDS_PREFIX = 'unix://'
+
       def initialize_with_constructor_args(host: nil, port: nil, socket_path: nil)
         try_initialize_with(host: host, port: port, socket_path: socket_path,
-          not_both_error_message: 
+          error_message: 
             "Both UDP: (host/port #{host}:#{port}) and UDS (socket_path #{socket_path}) " +
             "constructor arguments were given. Use only one or the other.",
           )
@@ -36,13 +49,11 @@ def initialize_with_constructor_args(host: nil, port: nil, socket_path: nil)
 
       def initialize_with_env_vars()
         try_initialize_with(
+          dogstatsd_url: ENV['DD_DOGSTATSD_URL'],
           host: ENV['DD_AGENT_HOST'],
           port: ENV['DD_DOGSTATSD_PORT'] && ENV['DD_DOGSTATSD_PORT'].to_i,
           socket_path: ENV['DD_DOGSTATSD_SOCKET'],
-          not_both_error_message:
-            "Both UDP (DD_AGENT_HOST/DD_DOGSTATSD_PORT #{ENV['DD_AGENT_HOST']}:#{ENV['DD_DOGSTATSD_PORT']}) " +
-            "and UDS (DD_DOGSTATSD_SOCKET #{ENV['DD_DOGSTATSD_SOCKET']}) environment variables are set. " +
-            "Set only one or the other.",
+          error_message: ERROR_MESSAGE,
         )
       end
 
@@ -50,9 +61,13 @@ def initialize_with_defaults()
         try_initialize_with(host: DEFAULT_HOST, port: DEFAULT_PORT)
       end
 
-      def try_initialize_with(host: nil, port: nil, socket_path: nil, not_both_error_message: "")
+      def try_initialize_with(dogstatsd_url: nil, host: nil, port: nil, socket_path: nil, error_message: ERROR_MESSAGE)
         if (host || port) && socket_path
-          raise ArgumentError, not_both_error_message
+          raise ArgumentError, error_message
+        end
+
+        if dogstatsd_url
+          host, port, socket_path = parse_dogstatsd_url(str: dogstatsd_url.to_s)
         end
 
         if host || port 
@@ -71,6 +86,40 @@ def try_initialize_with(host: nil, port: nil, socket_path: nil, not_both_error_m
 
         return false
       end
+
+      def parse_dogstatsd_url(str:)
+        # udp socket connection
+
+        if str.start_with?(UDP_PREFIX)
+          dogstatsd_url = str[UDP_PREFIX.size..str.size]
+          host = nil
+          port = nil
+
+          if dogstatsd_url.include?(":")
+            parts = dogstatsd_url.split(":")
+            if parts.size > 2
+              raise ArgumentError, "Error: DD_DOGSTATSD_URL wrong format for an UDP connection. E.g. 'udp://localhost:8125'"
+            end
+
+            host = parts[0]
+            port = parts[1].to_i
+          else
+            host = dogstatsd_url
+          end
+
+          return host, port, nil
+        end
+
+        # unix socket connection
+
+        if str.start_with?(UDS_PREFIX)
+          return nil, nil, str[UDS_PREFIX.size..str.size]
+        end
+
+        # malformed value
+
+        raise ArgumentError, "Error: DD_DOGSTATSD_URL has been provided but is not starting with 'udp://' nor 'unix://'"
+      end
     end
   end
 end
diff --git a/spec/statsd/connection_cfg_spec.rb b/spec/statsd/connection_cfg_spec.rb
index 9b7726a..bc110a5 100644
--- a/spec/statsd/connection_cfg_spec.rb
+++ b/spec/statsd/connection_cfg_spec.rb
@@ -8,6 +8,7 @@
   around do |example|
     ClimateControl.modify(
       'DD_AGENT_HOST' => dd_agent_host,
+      'DD_DOGSTATSD_URL' => dd_dogstatsd_url,
       'DD_DOGSTATSD_PORT' => dd_dogstatsd_port,
       'DD_DOGSTATSD_SOCKET' => dd_dogstatsd_socket,
     ) do
@@ -19,6 +20,7 @@
   let(:port) { nil }
   let(:socket_path) { nil }
   let(:dd_agent_host) { nil }
+  let(:dd_dogstatsd_url) { nil }
   let(:dd_dogstatsd_port) { nil }
   let(:dd_dogstatsd_socket) { nil }
 
@@ -29,6 +31,7 @@
       let(:dd_agent_host) { 'unused' }
       let(:dd_dogstatsd_port) { '999' }
       let(:dd_dogstatsd_socket) { '/un/used' }
+      let(:dd_dogstatsd_url) { 'unix://unused.sock' }
 
       it 'creates a UDP connection' do
         expect(subject.transport_type).to eq :udp
@@ -144,6 +147,75 @@
       end
     end
 
+    context 'with no args and a malformed DD_DOGSTATSD_URL' do
+      let(:dd_dogstatsd_url) { 'tcppp://somehost' }
+      it 'raises an exception' do
+        expect do
+          subject.new(dogstatsd_url: dogstatsd_url, host: host, port: port, socket_path: socket_path)
+        end.to raise_error(ArgumentError)
+      end
+    end
+
+    context 'with no args and DD_DOGSTATSD_URL set for UDP connection without port' do
+      let(:dd_dogstatsd_url) { 'udp://somehost' }
+
+      it 'creates an UDP connection' do
+        expect(subject.transport_type).to eq :udp
+      end
+
+      it 'sets host' do
+        expect(subject.host).to eq 'somehost'
+      end
+
+      it 'sets port to default port' do
+        expect(subject.port).to eq 8125
+      end
+
+      it 'sets socket_path to nil' do
+        expect(subject.socket_path).to eq nil
+      end
+    end
+
+    context 'with no args and DD_DOGSTATSD_URL set for UDP connection with a port' do
+      let(:dd_dogstatsd_url) { 'udp://somehost:1111' }
+
+      it 'creates an UDP connection' do
+        expect(subject.transport_type).to eq :udp
+      end
+
+      it 'sets host' do
+        expect(subject.host).to eq 'somehost'
+      end
+
+      it 'sets port' do
+        expect(subject.port).to eq 1111
+      end
+
+      it 'sets socket_path to nil' do
+        expect(subject.socket_path).to eq nil
+      end
+    end
+
+    context 'with no args and DD_DOGSTATSD_URL set for UDS connection' do
+      let(:dd_dogstatsd_url) { 'unix:///path/to/some-unix.sock' }
+
+      it 'creates an UDS connection' do
+        expect(subject.transport_type).to eq :uds
+      end
+
+      it 'sets host to nil' do
+        expect(subject.host).to eq nil
+      end
+
+      it 'sets port to nil' do
+        expect(subject.port).to eq nil
+      end
+
+      it 'sets socket_path' do
+        expect(subject.socket_path).to eq '/path/to/some-unix.sock'
+      end
+    end
+
     context 'with both DD_AGENT_HOST and DD_DOGSTATSD_SOCKET set' do
       let(:dd_agent_host) { 'some-host' }
       let(:dd_dogstatsd_socket) { '/some/socket' }
@@ -151,9 +223,85 @@
       it 'raises an exception' do
         expect do
           subject.new(host: host, port: port, socket_path: socket_path)
-        end.to raise_error(
-          ArgumentError,
-          'Both UDP (DD_AGENT_HOST/DD_DOGSTATSD_PORT some-host:) and UDS (DD_DOGSTATSD_SOCKET /some/socket) environment variables are set. Set only one or the other.')
+        end.to raise_error(ArgumentError)
+      end
+    end
+
+    context 'with both DD_DOGSTATSD_URL and DD_AGENT_HOST, udp variant' do
+      let(:dd_agent_host) { 'some-host' }
+      let(:dd_dogstatsd_port) { '1111' }
+      let(:dd_dogstatsd_url) { 'udp://localhost' }
+
+      # DD_DOGSTATSD_URL has priority
+
+      it 'sets host' do
+        expect(subject.host).to eq 'localhost'
+      end
+
+      it 'sets port' do
+        expect(subject.port).to eq 8125
+      end
+
+      it 'sets socket_path' do
+        expect(subject.socket_path).to eq nil
+      end
+    end
+
+    context 'with both DD_DOGSTATSD_URL and DD_DOGSTATSD_SOCKET, udp variant' do
+      let(:dd_dogstatsd_socket) { '/not/used.sock' }
+      let(:dd_dogstatsd_url) { 'udp://localhost:2222' }
+
+      # DD_DOGSTATSD_URL has priority
+
+      it 'sets host' do
+        expect(subject.host).to eq 'localhost'
+      end
+
+      it 'sets port' do
+        expect(subject.port).to eq 2222
+      end
+
+      it 'sets socket_path' do
+        expect(subject.socket_path).to eq nil
+      end
+    end
+
+    context 'with both DD_DOGSTATSD_URL and DD_AGENT_HOST, uds variant' do
+      let(:dd_agent_host) { 'some-host' }
+      let(:dd_dogstatsd_port) { '1111' }
+      let(:dd_dogstatsd_url) { 'unix:///path/to/unix.sock' }
+
+      # DD_DOGSTATSD_URL has priority
+
+      it 'sets host to nil' do
+        expect(subject.host).to eq nil
+      end
+
+      it 'sets port to nil' do
+        expect(subject.port).to eq nil
+      end
+
+      it 'sets socket_path' do
+        expect(subject.socket_path).to eq '/path/to/unix.sock'
+      end
+    end
+
+    context 'with both DD_DOGSTATSD_URL and DD_DOGSTATSD_SOCKET, uds variant' do
+      let(:dd_dogstatsd_socket) { '/not/used.sock' }
+      let(:dd_dogstatsd_url) { 'unix:///path/to/unix.sock' }
+
+      # DD_DOGSTATSD_URL has priority
+
+      it 'sets host to nil' do
+        expect(subject.host).to eq nil
+      end
+
+      it 'sets port to nil' do
+        expect(subject.port).to eq nil
+      end
+
+      it 'sets socket_path' do
+        expect(subject.socket_path).to eq '/path/to/unix.sock'
       end
     end