1. Java Development Kit (JDK): This serves as the backbone of the Java environment, supplying all necessary executables, tools, and binaries to develop, debug, and run a Java program. It incorporates the Java Runtime Environment (JRE), a compiler (javac), a loader/interpreter (java), a documentation generator (javadoc), an archiver (jar), among other crucial development tools.

2. Java Runtime Environment (JRE): It fulfills the minimum prerequisites for running a Java application, encompassing the Java Virtual Machine (JVM), fundamental classes, and associated files.

3. Java Virtual Machine (JVM): This is an abstract computing machine that offers a runtime setting where Java bytecode can be executed. It’s responsible for features like garbage collection, security, and exception handling.

4. Integrated Development Environment (IDE): While not strictly mandatory, an IDE can dramatically improve your coding efficiency. IDEs such as IntelliJ IDEA, Eclipse, or NetBeans provide functionalities such as code completion, syntax highlighting, debugging tools, and automatic refactoring that ease the Java coding process.

5. Java APIs (Application Programming Interface): These are predefined code packages that facilitate common tasks like database connections or file input/output management.

6. Build Tools and Dependency Management: Software like Maven, Gradle, or Ant is utilized to manage dependencies and build Java projects. These tools allow automatic compilation, testing, and deployment of your applications.

7. Java Libraries and Frameworks: There’s a wealth of libraries and frameworks available that can streamline Java development, such as the Spring Framework for enterprise applications, JUnit for testing, or Hibernate for managing database operations.

The setup process for a Java environment includes installing the JDK, configuring your IDE, and perhaps installing build tools and specific libraries or frameworks based on your project requirements. Additionally, you’ll need to establish environment variables like JAVA_HOME (which points to your JDK installation directory) and updating the PATH variable to include the JDK’s bin directory for global access to the tools.