diff --git a/api/internal/plugins/fnplugin/fnplugin.go b/api/internal/plugins/fnplugin/fnplugin.go
index 309ca30f1..ddd980d74 100644
--- a/api/internal/plugins/fnplugin/fnplugin.go
+++ b/api/internal/plugins/fnplugin/fnplugin.go
@@ -77,6 +77,7 @@ func NewFnPlugin(o *types.FnPluginLoadingOptions) *FnPlugin {
 			EnableStarlark: o.EnableStar,
 			EnableExec:     o.EnableExec,
 			StorageMounts:  toStorageMounts(o.Mounts),
+			Env:            o.Env,
 		},
 	}
 }
diff --git a/api/krusty/fnplugin_test.go b/api/krusty/fnplugin_test.go
index 5a2081622..b45316a23 100644
--- a/api/krusty/fnplugin_test.go
+++ b/api/krusty/fnplugin_test.go
@@ -464,3 +464,50 @@ metadata:
   name: another-namespace
 `)
 }
+
+func TestFnContainerEnvVars(t *testing.T) {
+	skipIfNoDocker(t)
+
+	th := kusttest_test.MakeEnhancedHarness(t)
+	defer th.Reset()
+
+	th.WriteK("/app", `
+generators:
+- gener.yaml
+`)
+
+	// TODO: cheange image to gcr.io/kpt-functions/templater:stable
+	// when https://github.com/GoogleContainerTools/kpt-functions-catalog/pull/103
+	// is merged
+	th.WriteF("/app/gener.yaml", `
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: demo
+  annotations:
+    config.kubernetes.io/function: |
+      container:
+        image: quay.io/aodinokov/kpt-templater:0.0.1
+        envs:
+        - TESTTEMPLATE=value
+data:
+  template: |
+    apiVersion: v1
+    kind: ConfigMap
+    metadata:
+      name: env
+    data:
+      value: '{{ env "TESTTEMPLATE" }}'
+`)
+	m := th.Run("/app", th.MakeOptionsPluginsEnabled())
+	th.AssertActualEqualsExpected(m, `
+apiVersion: v1
+data:
+  value: value
+kind: ConfigMap
+metadata:
+  annotations:
+    config.kubernetes.io/path: configmap_env.yaml
+  name: env
+`)
+}
diff --git a/api/types/pluginrestrictions.go b/api/types/pluginrestrictions.go
index f5588baa4..6dae63a97 100644
--- a/api/types/pluginrestrictions.go
+++ b/api/types/pluginrestrictions.go
@@ -53,4 +53,6 @@ type FnPluginLoadingOptions struct {
 	NetworkName string
 	// list of mounts
 	Mounts []string
+	// list of env variables to pass to fn
+	Env []string
 }
diff --git a/kustomize/internal/commands/build/build.go b/kustomize/internal/commands/build/build.go
index 55da661cb..88c189230 100644
--- a/kustomize/internal/commands/build/build.go
+++ b/kustomize/internal/commands/build/build.go
@@ -90,6 +90,9 @@ func NewCmdBuild(out io.Writer) *cobra.Command {
 	cmd.Flags().StringArrayVar(
 		&o.fnOptions.Mounts, "mount", []string{},
 		"a list of storage options read from the filesystem")
+	cmd.Flags().StringArrayVarP(
+		&o.fnOptions.Env, "env", "e", []string{},
+		"a list of environment variables to be used by functions")
 
 	addFlagLoadRestrictor(cmd.Flags())
 	addFlagEnablePlugins(cmd.Flags())