This paper investigates the system design and experimental validation of integrated sensing and communication (ISAC) for environmental sensing, which is expected to be a critical enabler for next-generation wireless networks. We advocate exploiting orthogonal time frequency space (OTFS) modulation for its inherent sparsity and stability in delay-Doppler (DD) domain channels, facilitating a low-overhead environment sensing design. Moreover, a comprehensive environmental sensing framework is developed, encompassing DD domain channel estimation, target localization, and experimental validation. In particular, we first explore the OTFS channel estimation in the presence of fractional delay and Doppler shifts. Given the estimated parameters, we propose a three-ellipse positioning algorithm to localize the target's position, followed by determining the mobile transmitter's velocity. Additionally, to evaluate the performance of our proposed design, we conduct extensive simulations and experiments using a software-defined radio (SDR)-based platform with universal software radio peripheral (USRP). The experimental validations demonstrate that our proposed approach outperforms the benchmarks in terms of localization accuracy and velocity estimation, confirming its effectiveness in practical environmental sensing applications.