diff --git a/pkg/library/container/mountSources.go b/pkg/library/container/mountSources.go
index 1827baa9e..7afe963ae 100644
--- a/pkg/library/container/mountSources.go
+++ b/pkg/library/container/mountSources.go
@@ -81,13 +81,17 @@ func handleMountSources(k8sContainer *corev1.Container, devfileContainer *dw.Con
 		return err
 	}
 
-	k8sContainer.Env = append(k8sContainer.Env, corev1.EnvVar{
-		Name:  devfileConstants.ProjectsRootEnvVar,
-		Value: sourceMapping,
-	}, corev1.EnvVar{
-		Name:  devfileConstants.ProjectsSourceEnvVar,
-		Value: path.Join(sourceMapping, projectsSourcePath),
-	})
+	// The $PROJECT_ROOT and $PROJECT_SOURCE environment variables must be the first
+	// environment variables defined in the container so that other environment variables can reference them.
+	k8sContainer.Env = append([]corev1.EnvVar{
+		{
+			Name:  devfileConstants.ProjectsRootEnvVar,
+			Value: sourceMapping,
+		},
+		{
+			Name:  devfileConstants.ProjectsSourceEnvVar,
+			Value: path.Join(sourceMapping, projectsSourcePath),
+		}}, k8sContainer.Env...)
 
 	return nil
 }
diff --git a/pkg/library/container/testdata/component/converts-all-fields.yaml b/pkg/library/container/testdata/component/converts-all-fields.yaml
index 2260202b2..b2e15e5a7 100644
--- a/pkg/library/container/testdata/component/converts-all-fields.yaml
+++ b/pkg/library/container/testdata/component/converts-all-fields.yaml
@@ -51,14 +51,14 @@ output:
             memory: "-1"
             cpu: "-1"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-1"
-          - name: "TEST_ENVVAR"
-            value: "TEST_VALUE"
           - name: "PROJECTS_ROOT"
             value: "/source-mapping"
           - name: "PROJECT_SOURCE"
             value: "/source-mapping"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-1"
+          - name: "TEST_ENVVAR"
+            value: "TEST_VALUE"
         command:
           - "test"
           - "command"
diff --git a/pkg/library/container/testdata/mountsources/projects-source-and-root-first-env-vars.yaml.yaml b/pkg/library/container/testdata/mountsources/projects-source-and-root-first-env-vars.yaml.yaml
new file mode 100644
index 000000000..9084ed25a
--- /dev/null
+++ b/pkg/library/container/testdata/mountsources/projects-source-and-root-first-env-vars.yaml.yaml
@@ -0,0 +1,116 @@
+name: "Ensures  PROJECT_ROOT and PROJECT_SOURCE env vars are first in list of env vars"
+
+input:
+  projects:
+  - name: test_project
+    clonePath: clone-path
+  components:
+    - name: testing-container-1
+      container:
+        image: testing-image-1
+        memoryRequest: "-1"  # isolate test to not include this field
+        memoryLimit: "-1"  # isolate test to not include this field
+        cpuRequest: "-1"  # isolate test to not include this field
+        cpuLimit: "-1"  # isolate test to not include this field
+        # no mountSources defined -> should mount sources
+        env:
+          - name: user-env-var-1
+            value: value1
+          - name: user-env-var-1
+            value: value1
+    - name: testing-container-2
+      container:
+        image: testing-image-2
+        memoryRequest: "-1"  # isolate test to not include this field
+        memoryLimit: "-1"  # isolate test to not include this field
+        cpuRequest: "-1"  # isolate test to not include this field
+        cpuLimit: "-1"  # isolate test to not include this field
+        # No sourceMapping -> defaults to "/projects"
+        mountSources: true # mountSources: true -> should mount sources
+        env:
+          - name: user-env-var-2
+            value: value1
+          - name: user-env-var-3
+            value: value1
+    - name: testing-container-3
+      container:
+        image: testing-image-3
+        memoryRequest: "-1"  # isolate test to not include this field
+        memoryLimit: "-1"  # isolate test to not include this field
+        cpuRequest: "-1"  # isolate test to not include this field
+        cpuLimit: "-1"  # isolate test to not include this field
+        sourceMapping: "/projects"
+        mountSources: false # mountSources: false -> should not mount sources
+        env:
+          - name: user-env-var-4
+            value: value1
+          - name: user-env-var-5
+            value: value1
+output:
+  podAdditions:
+    containers:
+      - name: testing-container-1
+        image: testing-image-1
+        imagePullPolicy: Always
+        resources:
+          requests:
+            memory: "-1"
+            cpu: "-1"
+          limits:
+            memory: "-1"
+            cpu: "-1"
+        volumeMounts:
+          - name: "projects"
+            mountPath: "/projects"
+        env:
+          - name: "PROJECTS_ROOT"
+            value: "/projects"
+          - name: "PROJECT_SOURCE"
+            value: "/projects/clone-path"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-1"
+          - name: user-env-var-1
+            value: value1
+          - name: user-env-var-1
+            value: value1
+      - name: testing-container-2
+        image: testing-image-2
+        imagePullPolicy: Always
+        resources:
+          requests:
+            memory: "-1"
+            cpu: "-1"
+          limits:
+            memory: "-1"
+            cpu: "-1"
+        volumeMounts:
+          - name: "projects"
+            mountPath: "/projects"
+        env:
+          - name: "PROJECTS_ROOT"
+            value: "/projects"
+          - name: "PROJECT_SOURCE"
+            value: "/projects/clone-path"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-2"
+          - name: user-env-var-2
+            value: value1
+          - name: user-env-var-3
+            value: value1
+      - name: testing-container-3
+        image: testing-image-3
+        imagePullPolicy: Always
+        env:
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-3"
+          - name: user-env-var-4
+            value: value1
+          - name: user-env-var-5
+            value: value1
+        resources:
+          requests:
+            memory: "-1"
+            cpu: "-1"
+          limits:
+            memory: "-1"
+            cpu: "-1"
diff --git a/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-clonepath.yaml b/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-clonepath.yaml
index 1da0d2253..8f3780d98 100644
--- a/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-clonepath.yaml
+++ b/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-clonepath.yaml
@@ -51,12 +51,12 @@ output:
           - name: "projects"
             mountPath: "/testdir1"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-1"
           - name: "PROJECTS_ROOT"
             value: "/testdir1"
           - name: "PROJECT_SOURCE"
             value: "/testdir1/clone-path"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-1"
       - name: testing-container-2
         image: testing-image-2
         imagePullPolicy: Always
@@ -71,12 +71,12 @@ output:
           - name: "projects"
             mountPath: "/projects"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-2"
           - name: "PROJECTS_ROOT"
             value: "/projects"
           - name: "PROJECT_SOURCE"
             value: "/projects/clone-path"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-2"
       - name: testing-container-3
         image: testing-image-3
         imagePullPolicy: Always
diff --git a/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-project-name.yaml b/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-project-name.yaml
index b9e1bc3da..cc9109585 100644
--- a/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-project-name.yaml
+++ b/pkg/library/container/testdata/mountsources/projects-source-is-set-correctly-from-project-name.yaml
@@ -50,12 +50,12 @@ output:
           - name: "projects"
             mountPath: "/testdir1"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-1"
           - name: "PROJECTS_ROOT"
             value: "/testdir1"
           - name: "PROJECT_SOURCE"
             value: "/testdir1/test_project"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-1"
       - name: testing-container-2
         image: testing-image-2
         imagePullPolicy: Always
@@ -70,12 +70,12 @@ output:
           - name: "projects"
             mountPath: "/projects"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-2"
           - name: "PROJECTS_ROOT"
             value: "/projects"
           - name: "PROJECT_SOURCE"
             value: "/projects/test_project"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-2"
       - name: testing-container-3
         image: testing-image-3
         imagePullPolicy: Always
diff --git a/pkg/library/container/testdata/volume/container-that-mounts-projects-directly.yaml b/pkg/library/container/testdata/volume/container-that-mounts-projects-directly.yaml
index e77e3b75b..d0a25af70 100644
--- a/pkg/library/container/testdata/volume/container-that-mounts-projects-directly.yaml
+++ b/pkg/library/container/testdata/volume/container-that-mounts-projects-directly.yaml
@@ -35,9 +35,9 @@ output:
           - name: "projects"
             mountPath: "/not-source-mapping"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-1"
           - name: "PROJECTS_ROOT"
             value: "/not-source-mapping"
           - name: "PROJECT_SOURCE"
             value: "/not-source-mapping"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-1"
diff --git a/pkg/library/container/testdata/volume/mountSources.yaml b/pkg/library/container/testdata/volume/mountSources.yaml
index 5b54c2597..7e4772981 100644
--- a/pkg/library/container/testdata/volume/mountSources.yaml
+++ b/pkg/library/container/testdata/volume/mountSources.yaml
@@ -46,12 +46,12 @@ output:
           - name: "projects"
             mountPath: "/testdir1"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-1"
           - name: "PROJECTS_ROOT"
             value: "/testdir1"
           - name: "PROJECT_SOURCE"
             value: "/testdir1"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-1"
       - name: testing-container-2
         image: testing-image-2
         imagePullPolicy: Always
@@ -66,12 +66,12 @@ output:
           - name: "projects"
             mountPath: "/projects"
         env:
-          - name: "DEVWORKSPACE_COMPONENT_NAME"
-            value: "testing-container-2"
           - name: "PROJECTS_ROOT"
             value: "/projects"
           - name: "PROJECT_SOURCE"
             value: "/projects"
+          - name: "DEVWORKSPACE_COMPONENT_NAME"
+            value: "testing-container-2"
       - name: testing-container-3
         image: testing-image-3
         imagePullPolicy: Always