Why Adding Environment Variables Inside vercel.json Causes Deployment Errors on Vercel — and the Correct Way to Configure API Keys

Many developers run into deployment failures on Vercel when environment variables are written directly inside vercel.json. Although this may seem like a convenient configuration method, it conflicts with how Vercel manages secrets internally. As a result, the build can fail or halt entirely. This article explains why this happens, the structure behind Vercel’s environment variable handling, and how to configure variables the correct and stable way.

The Core Issue: Environment Variables Should Not Be Hardcoded in vercel.json

In the case discussed here, deployment failed because environment variables were placed inside a vercel.json configuration file. Vercel does not allow sensitive values—such as API keys—to be inserted directly in this file. Instead, the platform expects all secrets and runtime variables to be registered through its UI or CLI. When a conflicting setup is detected, Vercel’s build pipeline blocks the deployment to prevent leaks and misconfigurations.

A typical (incorrect) example looks like this:

{
  "env": {
    "API_KEY_NAME": "your-key-here"
  }
}

Vercel interprets this as a misconfiguration and may halt deployment, because configuration files are not an approved location for secrets.

Why Vercel Enforces This Restriction

Vercel’s environment system is intentionally separated from project configuration for security and reliability reasons:

• Prevents accidental exposure of API keys committed to version control
• Ensures environment parity across Production, Preview, and Development
• Provides rotation and management features unavailable through static files
• Avoids conflicts between file-defined values and Vercel’s secret storage engine

If a key is placed in vercel.json, Vercel blocks or interferes with the build to avoid unsafe deployments.

Correct Workflow for Setting Environment Variables

To deploy safely, environment variables must be registered using Vercel’s CLI or dashboard. This ensures that keys are encrypted, versioned, and scoped correctly.

1. Deploy the Project Without Environment Variables in the Config File

vercel

2. Add Each Environment Variable via CLI

Example for a generic variable:

vercel env add API_KEY_NAME

After entering the value, enable it for:

• Production
• Preview
• Development

3. Redeploy With Variables Applied

vercel --prod

Vercel now injects the environment variables into the build process securely and consistently across environments.

When This Problem Usually Appears

This error often shows up when:

• Migrating from another hosting platform
• Following outdated tutorials that use vercel.json for everything
• Attempting to inline secrets for quick testing
• Cloning a project with leftover configuration files

In all these cases, eliminating the env block from vercel.json resolves the error immediately.

Key Takeaways

The deployment failure did not come from your code but from the location of your environment variable configuration. Vercel intentionally prohibits API keys inside configuration files to maintain security and consistency. Using the official CLI workflow not only fixes the build but ensures long-term stability of your deployment pipeline.

References

1. Vercel Documentation – Environment Variables
   https://vercel.com/docs/projects/environment-variables
2. Vercel – Configuration (vercel.json)
   https://vercel.com/docs/projects/project-configuration
3. Vercel CLI – Managing Variables
   https://vercel.com/docs/cli/env