By default awk and sed do not expand shell or system variables and do not pass their own variables back to the shell. To use shell variables awk and sed statements must be included in double-quotes. Here are a few examples:

1) You have a file (words.txt) containing a list of words and their replacements as shown below.

blue red
yellow green
stormy blue
dark clear

You also have a text file (text.txt) where you need to replace the words from the list above with the corresponding alternatives.

blue flowers were growing on a yellow lawn under a dark stormy sky

Here’s a shell script to do it:

#!/bin/ksh
cat words.txt | while read LINE
do
     O=$(echo "$LINE" | awk '{print $1}')
     R=$(echo "$LINE" | awk '{print $2}')

     cat text.txt | sed "s/$O/$R/g" > tmp.txt
     mv tmp.txt text.txt
done

The resulting text.txt file would read:

red flowers were growing on a green lawn under a clear blue sky