Short version: your script starts with a shell comment, but Prefect’s run_shell_script step isn’t running your text through a shell. It tries to execute each line as a command; the first “command” it sees is “#”, which is not a file or executable — hence [Errno 2] No such file or directory: '#'. What to change - Remove the comment line, or - Explicitly invoke a shell yourself (bash/sh) so comments are handled, or - Replace the comment with an echo if you want visible context. Also, if you intend to pull a Prefect Variable, use Jinja to inject it directly; $PREFECT_VAR_* will not be set automatically. If you truly want $VAR expansion, set expand_env_vars: true and provide the env var. Working examples 1) Simple, no comments, inject Prefect Variable directly pull: - prefect.deployments.steps.run_shell_script: id: install_wheel script: | VERSION="{{ prefect.variables.bess_prefect_version }}" echo "Installing bess_prefect==$VERSION" pip install "bess_prefect==${VERSION}" 2) Keep comments by invoking a shell explicitly (Linux/macOS) pull: - prefect.deployments.steps.run_shell_script: id: install_wheel script: | bash -lc ' # Install bess_prefect wheel from GitHub Releases VERSION="{{ prefect.variables.bess_prefect_version }}" echo "Installing bess_prefect==$VERSION" pip install "bess_prefect==${VERSION}" ' 3) If you really want $VAR expansion (ensure the env var exists) pull: - prefect.deployments.steps.run_shell_script: id: install_wheel expand_env_vars: true env: PREFECT_VAR_bess_prefect_version: "{{ prefect.variables.bess_prefect_version }}" script: | echo "Installing bess_prefect using $PREFECT_VAR_bess_prefect_version" pip install "bess_prefect==$PREFECT_VAR_bess_prefect_version" Notes - Jinja in prefect.yaml: use {{ prefect.variables.my_var }} for Prefect Variables. Don’t rely on a magic PREFECT_VAR_* environment variable unless you set it. - If you need cross-platform support, invoking bash won’t work on Windows without WSL or Git Bash. Docs, for when you can’t sleep: - run_shell_script API: https://docs-3.prefect.io/v3/api-ref/python/prefect-deployments-steps-utility - prefect.yaml templating and steps: https://docs-3.prefect.io/v3/how-to-guides/deployments/prefect-yaml - Prefect Variables: https://docs-3.prefect.io/v3/concepts/variables If you share your OS/runner image and whether that version is a Prefect Variable or an env var, I can tailor the exact snippet.