diff --git a/pkg/porter/cnab.go b/pkg/porter/cnab.go
index 2e003eaf2..7eeea21a9 100644
--- a/pkg/porter/cnab.go
+++ b/pkg/porter/cnab.go
@@ -234,11 +234,20 @@ func (o *sharedOptions) parseParams() error {
 
 // parseParamSets parses the variable assignments in ParameterSets.
 func (o *sharedOptions) parseParamSets(p *Porter) error {
-	parsed, err := p.loadParameterSets(o.ParameterSets)
-	if err != nil {
-		return errors.Wrapf(err, "unable to process provided parameter sets: %v", o.ParameterSets)
+	if len(o.ParameterSets) > 0 {
+		// Load the manifest as it may be needed to determine if any
+		// parameters are of the Porter-exclusive type of 'file'
+		err := p.LoadManifestFrom(o.File)
+		if err != nil {
+			return err
+		}
+
+		parsed, err := p.loadParameterSets(o.ParameterSets)
+		if err != nil {
+			return errors.Wrapf(err, "unable to process provided parameter sets: %v", o.ParameterSets)
+		}
+		o.parsedParamSets = parsed
 	}
-	o.parsedParamSets = parsed
 	return nil
 }
 
diff --git a/pkg/porter/cnab_test.go b/pkg/porter/cnab_test.go
index bef422b6e..1aeb87e62 100644
--- a/pkg/porter/cnab_test.go
+++ b/pkg/porter/cnab_test.go
@@ -6,6 +6,7 @@ import (
 	"testing"
 
 	"get.porter.sh/porter/pkg/build"
+	"get.porter.sh/porter/pkg/config"
 	"get.porter.sh/porter/pkg/context"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
@@ -91,6 +92,10 @@ func TestSharedOptions_defaultDriver(t *testing.T) {
 
 func TestParseParamSets_viaPathOrName(t *testing.T) {
 	p := NewTestPorter(t)
+	cxt := p.TestConfig.TestContext
+
+	// Add manifest used to parse parameter sets
+	cxt.AddTestFile("testdata/porter.yaml", config.Name)
 
 	p.TestParameters.TestSecrets.AddSecret("foo_secret", "foo_value")
 	p.TestParameters.TestSecrets.AddSecret("PARAM2_SECRET", "VALUE2")
@@ -102,6 +107,9 @@ func TestParseParamSets_viaPathOrName(t *testing.T) {
 			"HELLO_CUSTOM",
 			"/paramset.json",
 		},
+		bundleFileOptions: bundleFileOptions{
+			File: config.Name,
+		},
 	}
 
 	err := opts.parseParamSets(p.Porter)
@@ -114,6 +122,33 @@ func TestParseParamSets_viaPathOrName(t *testing.T) {
 	assert.Equal(t, wantParams, opts.parsedParamSets, "resolved unexpected parameter values")
 }
 
+func TestParseParamSets_FileType(t *testing.T) {
+	p := NewTestPorter(t)
+	cxt := p.TestConfig.TestContext
+
+	// Add manifest used to parse parameter sets
+	cxt.AddTestFile("testdata/porter-with-file-param.yaml", config.Name)
+
+	p.TestConfig.TestContext.AddTestFile("testdata/paramset-with-file-param.json", "/paramset.json")
+
+	opts := sharedOptions{
+		ParameterSets: []string{
+			"/paramset.json",
+		},
+		bundleFileOptions: bundleFileOptions{
+			File: config.Name,
+		},
+	}
+
+	err := opts.parseParamSets(p.Porter)
+	assert.NoError(t, err)
+
+	wantParams := map[string]string{
+		"my-file-param": "/local/path/to/my-file-param",
+	}
+	assert.Equal(t, wantParams, opts.parsedParamSets, "resolved unexpected parameter values")
+}
+
 func TestCombineParameters(t *testing.T) {
 	t.Run("no override present, no parameter set present", func(t *testing.T) {
 		opts := sharedOptions{}
diff --git a/pkg/porter/lifecycle_test.go b/pkg/porter/lifecycle_test.go
index 7cdd22d7c..731d9d162 100644
--- a/pkg/porter/lifecycle_test.go
+++ b/pkg/porter/lifecycle_test.go
@@ -4,6 +4,7 @@ import (
 	"path/filepath"
 	"testing"
 
+	"get.porter.sh/porter/pkg/config"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 )
@@ -84,6 +85,10 @@ func TestInstallFromTagIgnoresCurrentBundle(t *testing.T) {
 
 func TestBundleLifecycleOpts_ToActionArgs(t *testing.T) {
 	p := NewTestPorter(t)
+	cxt := p.TestConfig.TestContext
+
+	// Add manifest which is used to parse parameter sets
+	cxt.AddTestFile("testdata/porter.yaml", config.Name)
 
 	deps := &dependencyExecutioner{}
 
@@ -118,6 +123,7 @@ func TestBundleLifecycleOpts_ToActionArgs(t *testing.T) {
 			sharedOptions: sharedOptions{
 				bundleFileOptions: bundleFileOptions{
 					RelocationMapping: "relocation-mapping.json",
+					File:              config.Name,
 				},
 				Name: "MyClaim",
 				Params: []string{
diff --git a/pkg/porter/parameters.go b/pkg/porter/parameters.go
index 84523fea4..ca26baf00 100644
--- a/pkg/porter/parameters.go
+++ b/pkg/porter/parameters.go
@@ -307,6 +307,23 @@ func (p *Porter) loadParameterSets(params []string) (valuesource.Set, error) {
 			return nil, err
 		}
 
+		// A parameter may correspond to a Porter-specific parameter type of 'file'
+		// If so, add value (filepath) directly to map and remove from pset
+		for _, paramDef := range p.Manifest.Parameters {
+			if paramDef.Type == "file" {
+				for i, param := range pset.Parameters {
+					if param.Name == paramDef.Name {
+						// Pass through value (filepath) directly to resolvedParameters
+						resolvedParameters[param.Name] = param.Source.Value
+						// Eliminate this param from pset to prevent its resolution by
+						// the cnab-go library, which doesn't support this parameter type
+						pset.Parameters[i] = pset.Parameters[len(pset.Parameters)-1]
+						pset.Parameters = pset.Parameters[:len(pset.Parameters)-1]
+					}
+				}
+			}
+		}
+
 		rc, err := p.Parameters.ResolveAll(pset)
 		if err != nil {
 			return nil, err
diff --git a/pkg/porter/testdata/paramset-with-file-param.json b/pkg/porter/testdata/paramset-with-file-param.json
new file mode 100644
index 000000000..6a3856522
--- /dev/null
+++ b/pkg/porter/testdata/paramset-with-file-param.json
@@ -0,0 +1,13 @@
+{
+  "name": "mypset",
+  "created": "1983-04-18T01:02:03.000000004Z",
+  "modified": "1983-04-18T01:02:03.000000004Z",
+  "parameters": [
+    {
+      "name": "my-file-param",
+      "source": {
+        "path": "/local/path/to/my-file-param"
+      }
+    }
+  ]
+}
diff --git a/pkg/porter/testdata/porter-with-file-param.yaml b/pkg/porter/testdata/porter-with-file-param.yaml
new file mode 100644
index 000000000..f80b04c26
--- /dev/null
+++ b/pkg/porter/testdata/porter-with-file-param.yaml
@@ -0,0 +1,27 @@
+name: HELLO_CUSTOM
+version: 0.1.0
+description: "A bundle with a custom action"
+tag: getporter/porter-hello:v0.1.0
+
+parameters:
+  - name: my-file-param
+    description: "My file param"
+    type: file
+    path: /container/path/to/file
+
+mixins:
+  - exec
+
+install:
+  - exec:
+      description: "cat file"
+      command: bash
+      flags:
+        c: '"cat /container/path/to/file"'
+
+uninstall:
+  - exec:
+      description: "cat file"
+      command: bash
+      flags:
+        c: '"cat /container/path/to/file"'
diff --git a/tests/install_test.go b/tests/install_test.go
index 20df66c56..ccd5a7bc6 100644
--- a/tests/install_test.go
+++ b/tests/install_test.go
@@ -51,9 +51,11 @@ func TestInstall_fileParam(t *testing.T) {
 	p.TestConfig.TestContext.AddTestFile(filepath.Join(p.TestDir, "testdata/bundle-with-file-params.yaml"), "porter.yaml")
 	p.TestConfig.TestContext.AddTestFile(filepath.Join(p.TestDir, "testdata/helpers.sh"), "helpers.sh")
 	p.TestConfig.TestContext.AddTestFile(filepath.Join(p.TestDir, "testdata/myfile"), "./myfile")
+	p.TestConfig.TestContext.AddTestFile(filepath.Join(p.TestDir, "testdata/myotherfile"), "./myotherfile")
 
 	installOpts := porter.InstallOptions{}
 	installOpts.Params = []string{"myfile=./myfile"}
+	installOpts.ParameterSets = []string{filepath.Join(p.TestDir, "testdata/parameter-set-with-file-param.json")}
 
 	err := installOpts.Validate([]string{}, p.Porter)
 	require.NoError(t, err)
@@ -67,5 +69,6 @@ func TestInstall_fileParam(t *testing.T) {
 
 	claim, err := p.Claims.Read(p.Manifest.Name)
 	require.NoError(t, err, "could not fetch claim")
-	require.Equal(t, "Hello World!", claim.Outputs["myfile"], "expected output to match the decoded file contents")
+	require.Equal(t, "Hello World!", claim.Outputs["myfile"], "expected output 'myfile' to match the decoded file contents")
+	require.Equal(t, "Hello Other World!", claim.Outputs["myotherfile"], "expected output 'myotherfile' to match the decoded file contents")
 }
diff --git a/tests/testdata/bundle-with-file-params.yaml b/tests/testdata/bundle-with-file-params.yaml
index 5ebab2f31..677f65f62 100644
--- a/tests/testdata/bundle-with-file-params.yaml
+++ b/tests/testdata/bundle-with-file-params.yaml
@@ -10,6 +10,9 @@ parameters:
   - name: myfile
     type: file
     path: /root/myfile
+  - name: myotherfile
+    type: file
+    path: /root/myotherfile
   # This is added to cover bug fix for https://github.com/deislabs/porter/issues/835
   # It will be inherently exercised in install_test.go via a default bundle installation
   - name: onlyUpgrade
@@ -22,6 +25,11 @@ outputs:
     type: string
     applyTo:
       - install
+  - name: myotherfile
+    type: file
+    path: /root/myotherfile
+    applyTo:
+      - install
 
 install:
   - exec:
diff --git a/tests/testdata/myotherfile b/tests/testdata/myotherfile
new file mode 100644
index 000000000..cbe6fe039
--- /dev/null
+++ b/tests/testdata/myotherfile
@@ -0,0 +1 @@
+Hello Other World!
\ No newline at end of file
diff --git a/tests/testdata/parameter-set-with-file-param.json b/tests/testdata/parameter-set-with-file-param.json
new file mode 100644
index 000000000..4a98695cd
--- /dev/null
+++ b/tests/testdata/parameter-set-with-file-param.json
@@ -0,0 +1,13 @@
+{
+  "name": "mybun",
+  "created": "2020-06-23T13:31:06.22727-06:00",
+  "modified": "2020-06-23T13:31:44.692834-06:00",
+  "parameters": [
+    {
+      "name": "myotherfile",
+      "source": {
+        "path": "./myotherfile"
+      }
+    }
+  ]
+}
\ No newline at end of file