Hi Erik, Thank you for your response. I did edit and sourced the setup file, I also got the first step run_pestica_ica.sh to run without an error. Do I understand correctly that the  resp_mean_mni.nii is part of the distribution? it wasn't part of the package I downloaded. Here's the list of files that was in the pestica_afni_v1_2:
apply_PESTICA2.m          
meanepi_mni.nii
assemble_slices_to_timeseries.m   
optimize_pmu.m
card_mean_mni.nii             
prepare_ICA_decomp.m
disassemble_timeseries_to_slices.m
README                   

resp_mean_mni.nii
epi_132vols.nii                  
run_irfret.sh
epi_mask.nii                    
run_pestica_est.sh
example_physio.asv     
 run_pestica_ica.sh
example_physio.m                 
setup_pestica.sh
filter_pestica_est.sh           
tfilter_fft.m
get_correlation_threshold.m       
view_and_correct_estimator.m
get_slice_timing.m

Also, here's the full error including the complete path:



And the  PESTICA_DIR is set to: PESTICA_DIR=/net/synapse/nt/ekat/test_pestica/pestica_afni_v1_2
 FATAL ERROR: can't open --source dataset '/net/synapse/nt/ekat/test_pestica/pestica_afni_v1_2/resp_mean_mni.nii' :-(
FATAL ERROR: can't open --source dataset '/net/synapse/nt/ekat/test_pestica/pestica_afni_v1_2/card_mean_mni.nii' :-(

thank you for your help
Ekaterina