Docker-Compose: Relative Env Files with Variable Substitution

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    This Post is over a year old (first published about 4 years ago). As such, please keep in mind that some of the information may no longer be accurate, best practice, or a reflection of how I would approach the same thing today.
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    Date Posted:
    Nov. 15, 2019
    Last Updated:
    Nov. 15, 2019
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One of the neat features of the Docker-Compose file syntax is that it allows for variable substitution, where you can put in a placeholder that will get filled in from your .env file. This is both useful and often necessary because you need to keep your docker-compose.yml checked into GIT / version-control, but you don’t want to store passwords directly in the code. Variable substitution lets you do exactly that:


version: '3.1'
    image: mysql:5.7

.env (not checked into version control):


Problem: Docker-Compose does not read .env files outside of the working directory

Here is the issue: all of the above works fine, except if your .env file lives outside of the directory where the docker-compose.yml file resides. For example, let’s pretend that our scenario is that we have a .env file in the project root that we want to share with multiple compose files in subdirectories. Like this:

Project Root:

  • .env (contains variables)
  • .gitignore
  • /backend
    • docker-compose.yml (consumes variables via substitution)
  • /frontend
    • docker-compose.yml (consumes variables via substitution)

Now, ignoring that there might be ways to optimize our docker setup here and consolidate, how can we get both docker-compose files to use the top level .env file?

Best Option (if it works for you) – Official CLI Arguments

This issue / feature has been requested a lot from users of Docker, and it looks like the Docker dev team has taken a few passes at implementing the ability to use variable substitution with a env file outside of the working directory.


One way that this is supposed to now be possible is through the --project-directory argument to docker-compose. The way it is supposed to work, is that you can use it to “specify an alternate working directory”, by passing in a PATH string (CLI ref page here). For example, if I wanted to start the backend while using the parent project directory, theoretically this should work:

cd backend
docker-compose --project-directory ./../ up

However, you can find many instances (1, 2, 3) where users are saying this straight up does not work, and I would have to agree from my personal experience. And the official response is essentially “yes, this is usually broken”, despite the argument staying in the docs since Compose 3.2 (PR here).


Another option that is supposed to be viable for this purpose is the --env-file argument. However, like the env_file option, this appears to actually only work for passing environment values directly to the container, and does not work for docker-compose variable substitution – in fact, it appears to only work with the run commands, which would support this hypothesis. This is despite the fact that an issue requesting that --env-file be useable with the compose commands was closed – you can see comments on the relevant pull request that show it still not working (this is my experience as well). If you can get this to work, this would probably be the cleanest solution to this issue.


Since neither of the above “official” approaches actually work for me, and many other users, I want to cover some common workarounds that do work. Albeit, not in the most optimal solutions.

Execute commands where the .env is located

Rather running docker-compose where the YML file is located and getting docker to pull in a .env file in a different directory, you can actually do the reverse; execute the command where the .env file is located, and tell docker the location of a compose file in a different directory. We can do this with the -f or --file option.

Going back to our original example, here is the example file structure:

  • .env (contains variables)
  • .gitignore
  • /backend
    • docker-compose.yml (consumes variables)
  • /frontend
    • docker-compose.yml (consumes variables)

And here is how we could start up both docker configs.

# In the project root dir
docker-compose -f ./backend/docker-compose.yml up -d
docker-compose -f ./frontend/docker-compose.yml up -d

Symlink the .env file in

This is a really common solution to this issue, and a good solution to remember in general when programs require that files be in the same directory. Instead of copying the file to the directory as a part of a build script, we can create a symbolic link, which we only have to create once, and will make docker think that the .env file really is in the same folder as the compose file.

For our example scenario, I just have to create the two symlinks in a one time process:

(Bash example):

ln -s ../.env backend/.env
ln -s ../.env frontend/.env

Although version control, like GIT, can actually handle storing symlinks, if you are not comfortable with this, you could always have the symlinks generated with a one-time script.

Copy the env file around

If you are opposed to using symlinks, you could simply copy the top level .env file around to various spots, using some standard shell scripting. I find this method a little messy and less optimal.

Simply passing env variable values from host to container

If you don’t care about variable substitution, and all you’re looking to do is simply pass a bunch of values through to the container, then most of this post is extra information that you don’t need. Passing environment values to the container itself is pretty simple, and has multiple easy-to-use options:

  • Full details
    • You can use the env_file option to pass an entire .env file contents to the container
    • Put under environment: but leave off value
    • Pass via docker-compose run -e {VAR}={VAL} {imageName}

One thought on “Docker-Compose: Relative Env Files with Variable Substitution”

  1. thatg33k says:

    Thank you ! I just wasted hours trying to figure out how to pass the same variables to all my containers and never thought about using a symlink.

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