diff --git a/pkg/devfile/parse.go b/pkg/devfile/parse.go
index 6eba767f..64c2890a 100644
--- a/pkg/devfile/parse.go
+++ b/pkg/devfile/parse.go
@@ -80,6 +80,16 @@ func ParseDevfileAndValidate(args parser.ParserArgs) (d parser.DevfileObj, varWa
 	}
 
 	if d.Data.GetSchemaVersion() != "2.0.0" {
+
+		// add external variables to spec variables
+		if d.Data.GetDevfileWorkspaceSpec().Variables == nil {
+			d.Data.GetDevfileWorkspaceSpec().Variables = map[string]string{}
+		}
+		allVariables := d.Data.GetDevfileWorkspaceSpec().Variables
+		for key, val := range args.ExternalVariables {
+			allVariables[key] = val
+		}
+
 		// replace the top level variable keys with their values in the devfile
 		varWarning = variables.ValidateAndReplaceGlobalVariable(d.Data.GetDevfileWorkspaceSpec())
 	}
diff --git a/pkg/devfile/parse_test.go b/pkg/devfile/parse_test.go
new file mode 100644
index 00000000..4fe85602
--- /dev/null
+++ b/pkg/devfile/parse_test.go
@@ -0,0 +1,147 @@
+package devfile
+
+import (
+	"reflect"
+	"testing"
+
+	"github.com/devfile/api/v2/pkg/validation/variables"
+	"github.com/devfile/library/pkg/devfile/parser"
+	"github.com/devfile/library/pkg/devfile/parser/data/v2/common"
+)
+
+func TestParseDevfileAndValidate(t *testing.T) {
+	devfileContent := `commands:
+- exec:
+    commandLine: ./main {{ PARAMS }}
+    component: runtime
+    group:
+      isDefault: true
+      kind: run
+    workingDir: ${PROJECT_SOURCE}
+  id: run
+components:
+- container:
+    endpoints:
+    - name: http
+      targetPort: 8080
+    image: golang:latest
+    memoryLimit: 1024Mi
+    mountSources: true
+  name: runtime
+metadata:
+  description: Stack with the latest Go version
+  displayName: Go Runtime
+  icon: https://raw.githubusercontent.com/devfile-samples/devfile-stack-icons/main/golang.svg
+  language: go
+  name: my-go-app
+  projectType: go
+  tags:
+  - Go
+  version: 1.0.0
+schemaVersion: 2.1.0
+`
+
+	devfileContentWithVariable := devfileContent + `variables:
+  PARAMS: foo`
+	type args struct {
+		args parser.ParserArgs
+	}
+	tests := []struct {
+		name            string
+		args            args
+		wantVarWarning  variables.VariableWarning
+		wantCommandLine string
+		wantVariables   map[string]string
+	}{
+		{
+			name: "with external overriding variables",
+			args: args{
+				args: parser.ParserArgs{
+					ExternalVariables: map[string]string{
+						"PARAMS": "bar",
+					},
+					Data: []byte(devfileContentWithVariable),
+				},
+			},
+
+			wantCommandLine: "./main bar",
+			wantVariables: map[string]string{
+				"PARAMS": "bar",
+			},
+			wantVarWarning: variables.VariableWarning{
+				Commands:        map[string][]string{},
+				Components:      map[string][]string{},
+				Projects:        map[string][]string{},
+				StarterProjects: map[string][]string{},
+			},
+		},
+		{
+			name: "with new external variables",
+			args: args{
+				args: parser.ParserArgs{
+					ExternalVariables: map[string]string{
+						"OTHER": "other",
+					},
+					Data: []byte(devfileContentWithVariable),
+				},
+			},
+
+			wantCommandLine: "./main foo",
+			wantVariables: map[string]string{
+				"PARAMS": "foo",
+				"OTHER":  "other",
+			},
+			wantVarWarning: variables.VariableWarning{
+				Commands:        map[string][]string{},
+				Components:      map[string][]string{},
+				Projects:        map[string][]string{},
+				StarterProjects: map[string][]string{},
+			},
+		}, {
+			name: "with new external variables",
+			args: args{
+				args: parser.ParserArgs{
+					ExternalVariables: map[string]string{
+						"PARAMS": "baz",
+					},
+					Data: []byte(devfileContent),
+				},
+			},
+
+			wantCommandLine: "./main baz",
+			wantVariables: map[string]string{
+				"PARAMS": "baz",
+			},
+			wantVarWarning: variables.VariableWarning{
+				Commands:        map[string][]string{},
+				Components:      map[string][]string{},
+				Projects:        map[string][]string{},
+				StarterProjects: map[string][]string{},
+			},
+		},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			gotD, gotVarWarning, err := ParseDevfileAndValidate(tt.args.args)
+			if err != nil {
+				t.Errorf("ParseDevfileAndValidate() error = %v, wantErr nil", err)
+				return
+			}
+			commands, err := gotD.Data.GetCommands(common.DevfileOptions{})
+			if err != nil {
+				t.Errorf("unexpected error getting commands")
+			}
+			expectedCommandLine := commands[0].Exec.CommandLine
+			if expectedCommandLine != tt.wantCommandLine {
+				t.Errorf("command line is %q, should be %q", expectedCommandLine, tt.wantCommandLine)
+			}
+			if !reflect.DeepEqual(gotVarWarning, tt.wantVarWarning) {
+				t.Errorf("ParseDevfileAndValidate() gotVarWarning = %v, want %v", gotVarWarning, tt.wantVarWarning)
+			}
+			variables := gotD.Data.GetDevfileWorkspaceSpec().Variables
+			if !reflect.DeepEqual(variables, tt.wantVariables) {
+				t.Errorf("variables are %+v, expected %+v", variables, tt.wantVariables)
+			}
+		})
+	}
+}
diff --git a/pkg/devfile/parser/parse.go b/pkg/devfile/parser/parse.go
index 8c948159..4996ef3d 100644
--- a/pkg/devfile/parser/parse.go
+++ b/pkg/devfile/parser/parse.go
@@ -4,13 +4,14 @@ import (
 	"context"
 	"encoding/json"
 	"fmt"
+	"net/url"
+	"path"
+	"strings"
+
 	"github.com/devfile/library/pkg/util"
 	"k8s.io/apimachinery/pkg/types"
 	"k8s.io/client-go/tools/clientcmd"
-	"net/url"
-	"path"
 	"sigs.k8s.io/controller-runtime/pkg/client"
-	"strings"
 
 	devfileCtx "github.com/devfile/library/pkg/devfile/parser/context"
 	"github.com/devfile/library/pkg/devfile/parser/data"
@@ -80,6 +81,8 @@ type ParserArgs struct {
 	Context context.Context
 	// K8sClient is the Kubernetes client instance used for interacting with a cluster
 	K8sClient client.Client
+	// ExternalVariables override variables defined in the Devfile
+	ExternalVariables map[string]string
 }
 
 // ParseDevfile func populates the devfile data, parses and validates the devfile integrity.