diff --git a/config/config.go b/config/config.go
index 12bfa819d7..51b4265809 100644
--- a/config/config.go
+++ b/config/config.go
@@ -19,6 +19,7 @@ import (
 	"io/ioutil"
 	"net"
 	"net/url"
+	"os"
 	"path/filepath"
 	"regexp"
 	"sort"
@@ -196,7 +197,18 @@ func LoadFile(filename string) (*Config, error) {
 	if err != nil {
 		return nil, err
 	}
-	cfg, err := Load(string(content))
+
+	configString := string(content)
+
+	// If enabled, alermanager will parse environment variable in its config
+	// Based on the container command/args $(ENV_VARIABLE) syntax
+	// https://github.com/kubernetes/kubernetes/blob/ea0764452222146c47ec826977f49d7001b0ea8c/pkg/kubelet/container/helpers.go#L163
+	if os.Getenv("RESOLVE_ENV_IN_CONFIG") == "true" {
+		mapping := MappingFuncFor(envVarsToMap())
+		configString = Expand(configString, mapping)
+	}
+
+	cfg, err := Load(configString)
 	if err != nil {
 		return nil, err
 	}
diff --git a/config/expand_env.go b/config/expand_env.go
new file mode 100644
index 0000000000..576e3750bd
--- /dev/null
+++ b/config/expand_env.go
@@ -0,0 +1,115 @@
+package config
+
+import (
+	"bytes"
+	"os"
+	"strings"
+)
+
+const (
+	operator        = '$'
+	referenceOpener = '('
+	referenceCloser = ')'
+)
+
+// syntaxWrap returns the input string wrapped by the expansion syntax.
+func syntaxWrap(input string) string {
+	return string(operator) + string(referenceOpener) + input + string(referenceCloser)
+}
+
+// envVarsToMap constructs a map of environment name to value
+func envVarsToMap() map[string]string {
+	result := map[string]string{}
+	for _, env := range os.Environ() {
+		split := strings.SplitN(env, "=", 2)
+		result[split[0]] = split[1]
+	}
+	return result
+}
+
+// MappingFuncFor returns a mapping function for use with Expand that
+// implements the expansion semantics defined in the expansion spec; it
+// returns the input string wrapped in the expansion syntax if no mapping
+// for the input is found.
+func MappingFuncFor(context ...map[string]string) func(string) string {
+	return func(input string) string {
+		for _, vars := range context {
+			val, ok := vars[input]
+			if ok {
+				return val
+			}
+		}
+
+		return syntaxWrap(input)
+	}
+}
+
+// Expand replaces variable references in the input string according to
+// the expansion spec using the given mapping function to resolve the
+// values of variables.
+func Expand(input string, mapping func(string) string) string {
+	os.Environ()
+	var buf bytes.Buffer
+	checkpoint := 0
+	for cursor := 0; cursor < len(input); cursor++ {
+		if input[cursor] == operator && cursor+1 < len(input) {
+			// Copy the portion of the input string since the last
+			// checkpoint into the buffer
+			buf.WriteString(input[checkpoint:cursor])
+
+			// Attempt to read the variable name as defined by the
+			// syntax from the input string
+			read, isVar, advance := tryReadVariableName(input[cursor+1:])
+
+			if isVar {
+				// We were able to read a variable name correctly;
+				// apply the mapping to the variable name and copy the
+				// bytes into the buffer
+				buf.WriteString(mapping(read))
+			} else {
+				// Not a variable name; copy the read bytes into the buffer
+				buf.WriteString(read)
+			}
+
+			// Advance the cursor in the input string to account for
+			// bytes consumed to read the variable name expression
+			cursor += advance
+
+			// Advance the checkpoint in the input string
+			checkpoint = cursor + 1
+		}
+	}
+
+	// Return the buffer and any remaining unwritten bytes in the
+	// input string.
+	return buf.String() + input[checkpoint:]
+}
+
+// tryReadVariableName attempts to read a variable name from the input
+// string and returns the content read from the input, whether that content
+// represents a variable name to perform mapping on, and the number of bytes
+// consumed in the input string.
+//
+// The input string is assumed not to contain the initial operator.
+func tryReadVariableName(input string) (string, bool, int) {
+	switch input[0] {
+	case operator:
+		// Escaped operator; return it.
+		return input[0:1], false, 1
+	case referenceOpener:
+		// Scan to expression closer
+		for i := 1; i < len(input); i++ {
+			if input[i] == referenceCloser {
+				return input[1:i], true, i + 1
+			}
+		}
+
+		// Incomplete reference; return it.
+		return string(operator) + string(referenceOpener), false, 1
+	default:
+		// Not the beginning of an expression, ie, an operator
+		// that doesn't begin an expression.  Return the operator
+		// and the first rune in the string.
+		return (string(operator) + string(input[0])), false, 1
+	}
+}
diff --git a/config/expand_env_test.go b/config/expand_env_test.go
new file mode 100644
index 0000000000..3b522c9e0e
--- /dev/null
+++ b/config/expand_env_test.go
@@ -0,0 +1,70 @@
+package config
+
+import (
+	"os"
+	"testing"
+)
+
+func TestOnlyResolveEnvironmentConfigIfEnabled(t *testing.T) {
+	// Setting one env variable that will be ignored since RESOLVE_ENV_IN_CONFIG won't be set
+	os.Setenv("USERNAME", "any")
+	defer os.Unsetenv("USERNAME")
+
+	config, err := LoadFile("testdata/conf.env-variables.yml")
+	if err != nil {
+		t.Errorf("Error parsing %s: %s", "testdata/conf.good-env-variables.yml", err)
+	}
+
+	if config.Global.SMTPAuthUsername != "$(USERNAME)" {
+		t.Error(`An environment variable (smtp_auth_username: '$(USERNAME)') was resolved without having resolution enabled`)
+	}
+}
+
+func TestWontFailOnMissingEnvironmentVariables(t *testing.T) {
+	// Setting the resolve flag: RESOLVE_ENV_IN_CONFIG but no other env variables so nothing will be subsituted
+	os.Setenv("RESOLVE_ENV_IN_CONFIG", "true")
+	defer os.Unsetenv("RESOLVE_ENV_IN_CONFIG")
+
+	config, err := LoadFile("testdata/conf.env-variables.yml")
+	if err != nil {
+		t.Errorf("Error parsing %s: %s", "testdata/conf.good-env-variables.yml", err)
+	}
+
+	if config.Global.SMTPAuthUsername != "$(USERNAME)" {
+		t.Error(`An environment variable (smtp_auth_username: '$(USERNAME)') was resolved without having resolution enabled`)
+	}
+}
+
+func TestResolveEnvironmentVariables(t *testing.T) {
+	for env, value := range map[string]string{
+		"RESOLVE_ENV_IN_CONFIG": "true",
+		"EXAMPLE":               "example",
+		"USERNAME":              "username",
+		"PASSWORD":              "password",
+		"RECEIVER_NAME":         "my_receiver",
+	} {
+		os.Setenv(env, value)
+		defer os.Unsetenv(env)
+	}
+
+	config, err := LoadFile("testdata/conf.env-variables.yml")
+	if err != nil {
+		t.Errorf("Error parsing %s: %s", "testdata/conf.good-env-variables.yml", err)
+	}
+
+	if config.Receivers[0].Name != "my_receiver" {
+		t.Error("$(RECEIVER_NAME) was not resolved")
+	}
+
+	if config.Global.SMTPFrom != "alertmanager@example.org" {
+		t.Error("$(EXAMPLE) was not resolved")
+	}
+
+	if config.Global.SMTPAuthUsername != "username" {
+		t.Error("$(USERNAME) was not resolved")
+	}
+
+	if config.Global.SMTPAuthPassword != "password" {
+		t.Error("$(PASSWORD) was not resolved")
+	}
+}
diff --git a/config/testdata/conf.env-variables.yml b/config/testdata/conf.env-variables.yml
new file mode 100644
index 0000000000..9d8841494b
--- /dev/null
+++ b/config/testdata/conf.env-variables.yml
@@ -0,0 +1,26 @@
+global:
+  smtp_smarthost: 'localhost:25'
+  smtp_from: 'alertmanager@$(EXAMPLE).org'
+  smtp_auth_username: '$(USERNAME)'
+  smtp_auth_password: '$(PASSWORD)'
+  smtp_hello: ''
+  slack_api_url: 'https://slack.com/webhook'
+
+
+
+templates:
+- '/etc/alertmanager/template/*.tmpl'
+
+route:
+  group_by: ['alertname', 'cluster', 'service']
+
+  receiver: $(RECEIVER_NAME)
+  routes:
+  - match_re:
+      service: ^(foo1|foo2|baz)$
+    receiver: $(RECEIVER_NAME)
+
+receivers:
+- name: '$(RECEIVER_NAME)'
+  email_configs:
+  - to: 'team-X+alerts@$(EXAMPLE).org'