diff --git a/pkg/engine/cmd.go b/pkg/engine/cmd.go
index 4cc956eb..a00d8856 100644
--- a/pkg/engine/cmd.go
+++ b/pkg/engine/cmd.go
@@ -40,7 +40,12 @@ func (e *Engine) runCommand(ctx context.Context, tool types.Tool, input string)
 		return tool.BuiltinFunc(ctx, e.Env, input)
 	}
 
-	cmd, stop, err := e.newCommand(ctx, nil, tool.Instructions, input)
+	var extraEnv []string
+	if tool.WorkingDir != "" {
+		extraEnv = append(extraEnv, "GPTSCRIPT_TOOL_DIR="+tool.WorkingDir)
+	}
+
+	cmd, stop, err := e.newCommand(ctx, extraEnv, tool.Instructions, input)
 	if err != nil {
 		return "", err
 	}
@@ -59,9 +64,6 @@ func (e *Engine) runCommand(ctx context.Context, tool types.Tool, input string)
 	cmd.Stdin = strings.NewReader(input)
 	cmd.Stderr = io.MultiWriter(all, os.Stderr)
 	cmd.Stdout = io.MultiWriter(all, output)
-	if tool.WorkingDir != "" {
-		cmd.Dir = tool.WorkingDir
-	}
 
 	if err := cmd.Run(); err != nil {
 		_, _ = os.Stderr.Write(output.Bytes())
@@ -82,10 +84,6 @@ func (e *Engine) newCommand(ctx context.Context, extraEnv []string, instructions
 	envMap := map[string]string{}
 	for _, env := range env {
 		key, value, _ := strings.Cut(env, "=")
-		key, ok := strings.CutPrefix(key, "GPTSCRIPT_VAR_")
-		if !ok {
-			continue
-		}
 		envMap[key] = value
 	}
 
diff --git a/pkg/engine/http.go b/pkg/engine/http.go
index c48838c5..0ff30cb7 100644
--- a/pkg/engine/http.go
+++ b/pkg/engine/http.go
@@ -17,12 +17,10 @@ const DaemonURLSuffix = ".daemon.gpt.local"
 
 func (e *Engine) runHTTP(ctx context.Context, prg *types.Program, tool types.Tool, input string) (cmdRet *Return, cmdErr error) {
 	envMap := map[string]string{}
+
 	for _, env := range e.Env {
-		v, ok := strings.CutPrefix(env, "GPTSCRIPT_VAR_")
-		if ok {
-			k, v, _ := strings.Cut(v, "=")
-			envMap[k] = v
-		}
+		k, v, _ := strings.Cut(env, "=")
+		envMap[k] = v
 	}
 
 	toolURL := strings.Split(tool.Instructions, "\n")[0][2:]
@@ -64,10 +62,6 @@ func (e *Engine) runHTTP(ctx context.Context, prg *types.Program, tool types.Too
 
 	req.Header.Set("X-GPTScript-Tool-Name", tool.Parameters.Name)
 
-	for k, v := range envMap {
-		req.Header.Set("X-GPTScript-Var-"+k, v)
-	}
-
 	if err := json.Unmarshal([]byte(input), &map[string]any{}); err == nil {
 		req.Header.Set("Content-Type", "application/json")
 	} else {
diff --git a/pkg/runner/log.go b/pkg/runner/log.go
deleted file mode 100644
index 72772a6c..00000000
--- a/pkg/runner/log.go
+++ /dev/null
@@ -1,5 +0,0 @@
-package runner
-
-import "github.com/gptscript-ai/gptscript/pkg/mvl"
-
-var log = mvl.Package()
diff --git a/pkg/runner/runner.go b/pkg/runner/runner.go
index fa2f9571..7c55ccba 100644
--- a/pkg/runner/runner.go
+++ b/pkg/runner/runner.go
@@ -2,7 +2,6 @@ package runner
 
 import (
 	"context"
-	"os"
 	"sync"
 	"time"
 
@@ -21,41 +20,30 @@ type Monitor interface {
 }
 
 type Options struct {
-	WorkingDir     string
 	MonitorFactory MonitorFactory `usage:"-"`
 }
 
 func complete(opts ...Options) (result Options) {
 	for _, opt := range opts {
-		result.WorkingDir = types.FirstSet(opt.WorkingDir, result.WorkingDir)
 		result.MonitorFactory = types.FirstSet(opt.MonitorFactory, result.MonitorFactory)
 	}
 	if result.MonitorFactory == nil {
 		result.MonitorFactory = noopFactory{}
 	}
-	if result.WorkingDir == "" {
-		var err error
-		result.WorkingDir, err = os.Getwd()
-		if err != nil {
-			log.Fatalf("failed to determine current working directory: %v", err)
-		}
-	}
 	return
 }
 
 type Runner struct {
-	c          engine.Model
-	factory    MonitorFactory
-	workingDir string
+	c       engine.Model
+	factory MonitorFactory
 }
 
 func New(client engine.Model, opts ...Options) (*Runner, error) {
 	opt := complete(opts...)
 
 	return &Runner{
-		c:          client,
-		factory:    opt.MonitorFactory,
-		workingDir: opt.WorkingDir,
+		c:       client,
+		factory: opt.MonitorFactory,
 	}, nil
 }
 
@@ -106,10 +94,6 @@ func (r *Runner) call(callCtx engine.Context, monitor Monitor, env []string, inp
 		Env:      env,
 	}
 
-	if r.workingDir != "" {
-		e.Env = append(e.Env, "GPTSCRIPT_VAR_WORKDIR="+r.workingDir)
-	}
-
 	monitor.Event(Event{
 		Time:        time.Now(),
 		CallContext: &callCtx,
diff --git a/pkg/tests/testdata/TestCwd/call3.golden b/pkg/tests/testdata/TestCwd/call3.golden
index f564ec3f..8116fbc0 100644
--- a/pkg/tests/testdata/TestCwd/call3.golden
+++ b/pkg/tests/testdata/TestCwd/call3.golden
@@ -71,7 +71,7 @@
       "role": "tool",
       "content": [
         {
-          "text": "/testdata/TestCwd\nthe data"
+          "text": "testdata/TestCwd\nthe data"
         }
       ],
       "toolCall": {
diff --git a/pkg/tests/testdata/TestCwd/subtool/test.gpt b/pkg/tests/testdata/TestCwd/subtool/test.gpt
index 43bd9f40..41314bbe 100644
--- a/pkg/tests/testdata/TestCwd/subtool/test.gpt
+++ b/pkg/tests/testdata/TestCwd/subtool/test.gpt
@@ -1,6 +1,8 @@
 #
-#!/bin/bash
+#!/usr/bin/env X=${GPTSCRIPT_TOOL_DIR} /bin/bash
 set -e -x
 
+[ ${X} = ${GPTSCRIPT_TOOL_DIR} ]
+cd $X
 echo sub
 cat sub.txt
\ No newline at end of file
diff --git a/pkg/tests/testdata/TestCwd/test.gpt b/pkg/tests/testdata/TestCwd/test.gpt
index 2d3460bc..5185635a 100644
--- a/pkg/tests/testdata/TestCwd/test.gpt
+++ b/pkg/tests/testdata/TestCwd/test.gpt
@@ -8,6 +8,8 @@ name: local
 #!/bin/bash
 set -e -x
 
+[ "" = "${TOOL_DIR}" ]
 P=$(pwd)
-echo ${P##${GPTSCRIPT_VAR_WORKDIR}}
+echo ${GPTSCRIPT_TOOL_DIR##${P}}
+cd $GPTSCRIPT_TOOL_DIR
 cat data.txt
\ No newline at end of file