In Kubernetes, environment variables can be used to configure and manage the behavior of applications running on the cluster. Environment variables can be set directly in configuration files or using various tools such as kubectl. There are two ways to define environment variables with Kubernetes: by setting them directly in a configuration file or using configMaps. ConfigMaps provide a way to decouple configuration from image content and infrastructure, while secrets store sensitive information such as passwords and access keys. Environment variables can be used to set values for fields and resources, and can also be used to populate environment variables from other sources. Kubernetes provides various ways to manage environment variables, including using kubectl commands, configMaps, secrets, and variable references.