diff --git a/server/events/runtime/run_step_runner.go b/server/events/runtime/run_step_runner.go
index 6a2f859847..e0a39351ce 100644
--- a/server/events/runtime/run_step_runner.go
+++ b/server/events/runtime/run_step_runner.go
@@ -33,7 +33,7 @@ func (r *RunStepRunner) Run(ctx models.ProjectCommandContext, command string, pa
 		"HEAD_BRANCH_NAME":           ctx.Pull.HeadBranch,
 		"HEAD_REPO_NAME":             ctx.HeadRepo.Name,
 		"HEAD_REPO_OWNER":            ctx.HeadRepo.Owner,
-		"PATH":                       fmt.Sprintf("$PATH:%s", r.TerraformBinDir),
+		"PATH":                       fmt.Sprintf(os.ExpandEnv("$PATH:%s"), r.TerraformBinDir),
 		"PLANFILE":                   filepath.Join(path, GetPlanFilename(ctx.Workspace, ctx.ProjectName)),
 		"PROJECT_NAME":               ctx.ProjectName,
 		"PULL_AUTHOR":                ctx.Pull.Author,
@@ -46,6 +46,8 @@ func (r *RunStepRunner) Run(ctx models.ProjectCommandContext, command string, pa
 	for key, val := range customEnvVars {
 		finalEnvVars = append(finalEnvVars, fmt.Sprintf("%s=%s", key, val))
 	}
+
+
 	cmd.Env = finalEnvVars
 	out, err := cmd.CombinedOutput()
 
diff --git a/server/events/runtime/run_step_runner_test.go b/server/events/runtime/run_step_runner_test.go
index 54b3ef38e2..2d9bd97d5a 100644
--- a/server/events/runtime/run_step_runner_test.go
+++ b/server/events/runtime/run_step_runner_test.go
@@ -1,6 +1,8 @@
 package runtime_test
 
 import (
+	"fmt"
+	"os"
 	"strings"
 	"testing"
 
@@ -64,7 +66,7 @@ func TestRunStepRunner_Run(t *testing.T) {
 			ExpOut:  "user_name=acme-user\n",
 		},{
 			Command: "echo $PATH",
-			ExpOut:  "$PATH:/bin/dir\n",
+			ExpOut:  fmt.Sprintf(os.ExpandEnv("$PATH%s"),":/bin/dir\n"),
 		},
 	}