Question: This may sound like an easy question but the answers on the net all point to the basics of setting up an environment and referencing it in the project/package.

The scenario that I have encountered was never mentioned anywhere so I thought it would be good to document the behaviour here.

Below is the steps to reproduce the problem:  

1. Create a new package: `Package1.dtsx`  

2. Create a new (package) parameter: `Test, Int32, Required`  

3. Deploy the project.  

4. Goto Integration Services Catalogs and navigate to the package.  

5. Right click on the package and then Configure...  

6. Click on "..." next to the package parameter `Test`  

7. You will see that `"Use environment variable"` option is disabled/grayed out.

![Set Parameter Value](https://i.stack.imgur.com/MOwvY.png)

**Why is that?**

Answer: 
Before you can map them together, you have to click References and Add the Environment that you created for that package, then it will be enabled for you.
We have to first add environment variable in refernce inside package.