diff --git a/test/test_unit_template_default.py b/test/test_unit_template_default.py
index 6d50b8e..debd3ed 100644
--- a/test/test_unit_template_default.py
+++ b/test/test_unit_template_default.py
@@ -238,3 +238,22 @@ def test_include(runner, yadm, tmpdir):
     assert run.err == ''
     assert output_file.read() == EXPECTED_INCLUDE
     assert os.stat(output_file).st_mode == os.stat(input_file).st_mode
+
+
+def test_env(runner, yadm, tmpdir):
+    """Test env"""
+
+    input_file = tmpdir.join('input')
+    input_file.write('{{env.PWD}}', ensure=True)
+    input_file.chmod(FILE_MODE)
+    output_file = tmpdir.join('output')
+
+    script = f"""
+        YADM_TEST=1 source {yadm}
+        set_awk
+        template_default "{input_file}" "{output_file}"
+    """
+    run = runner(command=['bash'], inp=script)
+    assert run.success
+    assert run.err == ''
+    assert output_file.read().strip() == os.environ['PWD']
diff --git a/yadm b/yadm
index 47ee769..daf0669 100755
--- a/yadm
+++ b/yadm
@@ -425,6 +425,9 @@ function replace_vars() {
   for (label in c) {
     gsub(("{{" blank "*yadm\\." label blank "*}}"), c[label])
   }
+  for (label in ENVIRON) {
+    gsub(("{{" blank "*env\\." label blank "*}}"), ENVIRON[label])
+  }
 }
 function condition_helper(label, value) {
   gsub(/[\\.^$(){}\[\]|*+?]/, "\\\\&", value)