diff --git a/pkg/reconciler/v1alpha1/taskrun/resources/apply.go b/pkg/reconciler/v1alpha1/taskrun/resources/apply.go
index 967ba3f0a3e..b07b0964e82 100644
--- a/pkg/reconciler/v1alpha1/taskrun/resources/apply.go
+++ b/pkg/reconciler/v1alpha1/taskrun/resources/apply.go
@@ -65,10 +65,16 @@ func ApplyReplacements(spec *v1alpha1.TaskSpec, replacements map[string]string)
 	}
 
 	// Apply variable expansion to containerTemplate fields.
+	// Should eventually be removed; ContainerTemplate is the deprecated previous name of the StepTemplate field (#977).
 	if spec.ContainerTemplate != nil {
 		applyContainerReplacements(spec.ContainerTemplate, replacements)
 	}
 
+	// Apply variable expansion to stepTemplate fields.
+	if spec.StepTemplate != nil {
+		applyContainerReplacements(spec.StepTemplate, replacements)
+	}
+
 	// Apply variable expansion to the build's volumes
 	for i, v := range spec.Volumes {
 		spec.Volumes[i].Name = templating.ApplyReplacements(v.Name, replacements)
diff --git a/pkg/reconciler/v1alpha1/taskrun/resources/apply_test.go b/pkg/reconciler/v1alpha1/taskrun/resources/apply_test.go
index a6398d4a216..b2013038dc3 100644
--- a/pkg/reconciler/v1alpha1/taskrun/resources/apply_test.go
+++ b/pkg/reconciler/v1alpha1/taskrun/resources/apply_test.go
@@ -79,6 +79,7 @@ var envTaskSpec = &v1alpha1.TaskSpec{
 	}},
 }
 
+// containerTemplate is deprecated but is functional (and tested) for now (#977).
 var containerTemplateTaskSpec = &v1alpha1.TaskSpec{
 	ContainerTemplate: &corev1.Container{
 		Env: []corev1.EnvVar{{
@@ -99,6 +100,26 @@ var containerTemplateTaskSpec = &v1alpha1.TaskSpec{
 	}},
 }
 
+var stepTemplateTaskSpec = &v1alpha1.TaskSpec{
+	StepTemplate: &corev1.Container{
+		Env: []corev1.EnvVar{{
+			Name:  "template-var",
+			Value: "${inputs.params.FOO}",
+		}},
+	},
+	Steps: []corev1.Container{{
+		Name:  "simple-image",
+		Image: "${inputs.params.myimage}",
+	}, {
+		Name:  "image-with-env-specified",
+		Image: "some-other-image",
+		Env: []corev1.EnvVar{{
+			Name:  "template-var",
+			Value: "overridden-value",
+		}},
+	}},
+}
+
 var volumeMountTaskSpec = &v1alpha1.TaskSpec{
 	Steps: []corev1.Container{{
 		Name:  "foo",
@@ -269,6 +290,7 @@ func TestApplyParameters(t *testing.T) {
 			spec.Steps[0].Image = "busybox:world"
 		}),
 	}, {
+		// containerTemplate is deprecated but is functional (and tested) for now (#977).
 		name: "containerTemplate parameter",
 		args: args{
 			ts: containerTemplateTaskSpec,
@@ -293,6 +315,31 @@ func TestApplyParameters(t *testing.T) {
 			spec.ContainerTemplate.Env[0].Value = "BAR"
 			spec.Steps[0].Image = "replaced-image-name"
 		}),
+	}, {
+		name: "stepTemplate parameter",
+		args: args{
+			ts: stepTemplateTaskSpec,
+			tr: &v1alpha1.TaskRun{
+				Spec: v1alpha1.TaskRunSpec{
+					Inputs: v1alpha1.TaskRunInputs{
+						Params: []v1alpha1.Param{{
+							Name:  "FOO",
+							Value: "BAR",
+						}},
+					},
+				},
+			},
+			dp: []v1alpha1.ParamSpec{
+				{
+					Name:    "myimage",
+					Default: "replaced-image-name",
+				},
+			},
+		},
+		want: applyMutation(stepTemplateTaskSpec, func(spec *v1alpha1.TaskSpec) {
+			spec.StepTemplate.Env[0].Value = "BAR"
+			spec.Steps[0].Image = "replaced-image-name"
+		}),
 	}, {
 		name: "with default parameter",
 		args: args{