diff --git a/apps/api/src/lib/buildPacks/compose.ts b/apps/api/src/lib/buildPacks/compose.ts
index 2d16c1f8d..70a2ba8af 100644
--- a/apps/api/src/lib/buildPacks/compose.ts
+++ b/apps/api/src/lib/buildPacks/compose.ts
@@ -82,9 +82,10 @@ export default async function (data) {
 					v.startsWith('.') ||
 					v.startsWith('..') ||
 					v.startsWith('/') ||
-					v.startsWith('~')
+					v.startsWith('~') ||
+					v.startsWith('$PWD')
 				) {
-					// Nothing to do here, host path
+					v = v.replace('$.', `~`).replace('$..', '~').replace('$$PWD', '~');
 				} else {
 					if (!path) {
 						path = v;
diff --git a/apps/ui/src/routes/applications/[id]/storages.svelte b/apps/ui/src/routes/applications/[id]/storages.svelte
index 7f16645a2..8a810b635 100644
--- a/apps/ui/src/routes/applications/[id]/storages.svelte
+++ b/apps/ui/src/routes/applications/[id]/storages.svelte
@@ -40,9 +40,10 @@
 						volume.startsWith('.') ||
 						volume.startsWith('..') ||
 						volume.startsWith('/') ||
-						volume.startsWith('~')
+						volume.startsWith('~') ||
+						volume.startsWith('$PWD')
 					) {
-						// Nothing to do here, host path
+						volume = volume.replace('$.', `~`).replace('$..', '~').replace('$$PWD', '~');
 					} else {
 						if (!target) {
 							target = volume;