diff --git a/packages/hoppscotch-app/components/smart/EnvInput.vue b/packages/hoppscotch-app/components/smart/EnvInput.vue
index 761cc4564..3fd0d251f 100644
--- a/packages/hoppscotch-app/components/smart/EnvInput.vue
+++ b/packages/hoppscotch-app/components/smart/EnvInput.vue
@@ -35,10 +35,12 @@ import { EditorState, Extension } from "@codemirror/state"
 import clone from "lodash/clone"
 import { tooltips } from "@codemirror/tooltip"
 import { history, historyKeymap } from "@codemirror/history"
+import { HoppRESTVar } from "@hoppscotch/data"
 import { inputTheme } from "~/helpers/editor/themes/baseTheme"
 import { HoppReactiveEnvPlugin } from "~/helpers/editor/extensions/HoppEnvironment"
 import { useReadonlyStream } from "~/helpers/utils/composables"
 import { AggregateEnvironment, aggregateEnvs$ } from "~/newstore/environments"
+import { HoppReactiveVarPlugin } from "~/helpers/editor/extensions/HoppVariable"
 
 const props = withDefaults(
   defineProps<{
@@ -46,6 +48,7 @@ const props = withDefaults(
     placeholder: string
     styles: string
     envs: { key: string; value: string; source: string }[] | null
+    vars: { key: string; value: string }[] | null
     focus: boolean
     readonly: boolean
   }>(),
@@ -54,6 +57,7 @@ const props = withDefaults(
     placeholder: "",
     styles: "",
     envs: null,
+    vars: null,
     focus: false,
     readonly: false,
   }
@@ -120,7 +124,17 @@ const envVars = computed(() =>
     : aggregateEnvs.value
 )
 
+const varVars = computed(() =>
+  props.vars
+    ? props.vars.map((x) => ({
+        key: x.key,
+        value: x.value,
+      }))
+    : ([{ key: "size", value: "500" }] as HoppRESTVar[])
+)
+
 const envTooltipPlugin = new HoppReactiveEnvPlugin(envVars, view)
+const varTooltipPlugin = new HoppReactiveVarPlugin(varVars, view)
 
 const initView = (el: any) => {
   const extensions: Extension = [
@@ -146,6 +160,7 @@ const initView = (el: any) => {
       position: "absolute",
     }),
     envTooltipPlugin,
+    varTooltipPlugin,
     placeholderExt(props.placeholder),
     EditorView.domEventHandlers({
       paste(ev) {
diff --git a/packages/hoppscotch-app/helpers/editor/extensions/HoppVariable.ts b/packages/hoppscotch-app/helpers/editor/extensions/HoppVariable.ts
new file mode 100644
index 000000000..401f00a98
--- /dev/null
+++ b/packages/hoppscotch-app/helpers/editor/extensions/HoppVariable.ts
@@ -0,0 +1,180 @@
+import { watch, Ref } from "@nuxtjs/composition-api"
+import { Compartment } from "@codemirror/state"
+import { hoverTooltip } from "@codemirror/tooltip"
+import {
+  Decoration,
+  EditorView,
+  MatchDecorator,
+  ViewPlugin,
+} from "@codemirror/view"
+import * as E from "fp-ts/Either"
+import { HoppRESTVar, parseTemplateStringE } from "@hoppscotch/data"
+
+const HOPP_ENVIRONMENT_REGEX = /({{\w+}})/g
+
+const HOPP_ENV_HIGHLIGHT =
+  "cursor-help transition rounded px-1 focus:outline-none mx-0.5 env-highlight"
+const HOPP_ENV_HIGHLIGHT_FOUND =
+  "bg-accentDark text-accentContrast hover:bg-accent"
+const HOPP_ENV_HIGHLIGHT_NOT_FOUND =
+  "bg-red-500 text-accentContrast hover:bg-red-600"
+
+const cursorTooltipField = (aggregateEnvs: HoppRESTVar[]) =>
+  hoverTooltip(
+    (view, pos, side) => {
+      const { from, to, text } = view.state.doc.lineAt(pos)
+
+      // TODO: When Codemirror 6 allows this to work (not make the
+      // popups appear half of the time) use this implementation
+      // const wordSelection = view.state.wordAt(pos)
+      // if (!wordSelection) return null
+      // const word = view.state.doc.sliceString(
+      //   wordSelection.from - 2,
+      //   wordSelection.to + 2
+      // )
+      // if (!HOPP_ENVIRONMENT_REGEX.test(word)) return null
+
+      // Tracking the start and the end of the words
+      let start = pos
+      let end = pos
+
+      while (start > from && /\w/.test(text[start - from - 1])) start--
+      while (end < to && /\w/.test(text[end - from])) end++
+
+      if (
+        (start === pos && side < 0) ||
+        (end === pos && side > 0) ||
+        !HOPP_ENVIRONMENT_REGEX.test(
+          text.slice(start - from - 2, end - from + 2)
+        )
+      )
+        return null
+
+      const envValue =
+        aggregateEnvs.find(
+          (env) => env.key === text.slice(start - from, end - from)
+          // env.key === word.slice(wordSelection.from + 2, wordSelection.to - 2)
+        )?.value ?? "not found"
+
+      const result = parseTemplateStringE(envValue, aggregateEnvs)
+
+      const finalEnv = E.isLeft(result) ? "error" : result.right
+
+      return {
+        pos: start,
+        end: to,
+        above: true,
+        arrow: true,
+        create() {
+          const dom = document.createElement("span")
+          const xmp = document.createElement("xmp")
+          xmp.textContent = finalEnv
+          dom.appendChild(xmp)
+          dom.className = "tooltip-theme"
+          return { dom }
+        },
+      }
+    },
+    // HACK: This is a hack to fix hover tooltip not coming half of the time
+    // https://github.com/codemirror/tooltip/blob/765c463fc1d5afcc3ec93cee47d72606bed27e1d/src/tooltip.ts#L622
+    // Still doesn't fix the not showing up some of the time issue, but this is atleast more consistent
+    { hoverTime: 1 } as any
+  )
+
+function checkEnv(env: string, aggregateEnvs: HoppRESTVar[]) {
+  const className = aggregateEnvs.find(
+    (k: { key: string }) => k.key === env.slice(2, -2)
+  )
+    ? HOPP_ENV_HIGHLIGHT_FOUND
+    : HOPP_ENV_HIGHLIGHT_NOT_FOUND
+
+  return Decoration.mark({
+    class: `${HOPP_ENV_HIGHLIGHT} ${className}`,
+  })
+}
+
+const getMatchDecorator = (aggregateEnvs: HoppRESTVar[]) =>
+  new MatchDecorator({
+    regexp: HOPP_ENVIRONMENT_REGEX,
+    decoration: (m) => checkEnv(m[0], aggregateEnvs),
+  })
+
+export const environmentHighlightStyle = (aggregateEnvs: HoppRESTVar[]) => {
+  const decorator = getMatchDecorator(aggregateEnvs)
+
+  return ViewPlugin.define(
+    (view) => ({
+      decorations: decorator.createDeco(view),
+      update(u) {
+        this.decorations = decorator.updateDeco(u, this.decorations)
+      },
+    }),
+    {
+      decorations: (v) => v.decorations,
+    }
+  )
+}
+
+// export class HoppEnvironmentPlugin {
+//   private compartment = new Compartment()
+//
+//   private envs: AggregateEnvironment[] = []
+//
+//   constructor(
+//     subscribeToStream: StreamSubscriberFunc,
+//     private editorView: Ref<EditorView | undefined>
+//   ) {
+//     this.envs = getAggregateEnvs()
+//
+//     subscribeToStream(aggregateEnvs$, (envs) => {
+//       this.envs = envs
+//
+//       this.editorView.value?.dispatch({
+//         effects: this.compartment.reconfigure([
+//           cursorTooltipField(this.envs),
+//           environmentHighlightStyle(this.envs),
+//         ]),
+//       })
+//     })
+//   }
+//
+//   get extension() {
+//     return this.compartment.of([
+//       cursorTooltipField(this.envs),
+//       environmentHighlightStyle(this.envs),
+//     ])
+//   }
+// }
+
+export class HoppReactiveVarPlugin {
+  private compartment = new Compartment()
+
+  private envs: HoppRESTVar[] = []
+
+  constructor(
+    envsRef: Ref<HoppRESTVar[]>,
+    private editorView: Ref<EditorView | undefined>
+  ) {
+    watch(
+      envsRef,
+      (envs) => {
+        this.envs = envs
+
+        this.editorView.value?.dispatch({
+          effects: this.compartment.reconfigure([
+            cursorTooltipField(this.envs),
+            environmentHighlightStyle(this.envs),
+          ]),
+        })
+      },
+      { immediate: true }
+    )
+  }
+
+  get extension() {
+    return this.compartment.of([
+      cursorTooltipField(this.envs),
+      environmentHighlightStyle(this.envs),
+    ])
+  }
+}