Environment variables are configuration values stored outside your application's code, allowing you to manage settings without modifying source files. They're essential for separating configuration from code, especially in web hosting environments where security and flexibility matter.

Think of environment variables as secret notes your application reads when it starts. They typically store:

• Sensitive data like database passwords and API keys
• Configuration settings such as debug modes or feature flags
• System paths and directory locations
• Third-party service credentials

In hosting environments, you can set these variables through:

• Your hosting control panel (cPanel, Plesk, or custom dashboards)
• Configuration files like .env or .htaccess
• Command-line interfaces or deployment scripts

Key benefits include: Enhanced security (credentials aren't hard-coded), easier deployment across different environments (development, staging, production), and simplified configuration management for teams.

For beginners: Start by identifying what configuration changes between environments, then move those values to environment variables. Most modern frameworks and hosting platforms provide straightforward methods to implement this pattern.