Thanks a million to all for helpful suggestions. Dear Marshall, I made all changes as suggested. I am not getting any errors But looks like the "if ($File2Parts{$PartNumber})" is not working as expected. If I put the "print F3 ..." line outside the if condition it is writing File3. Any ideas? Here is my modified code:

#!/usr/bin/perl -w

use strict;

my $FILE1 = "D:/Data/WES/File1.txt";  # You can use "/"
my $FILE2 = "D:/Data/WES/File2.txt";  # avoids this \\ stuff
my $FILE3 = "D:/Data/WES/File3.txt";

open(F1,'<', $FILE1) or die "Can't open $FILE1\n";
open(F2,'<', $FILE2) or die "Can't open $FILE2\n";
open(F3,'>', $FILE3) or die "Can't open $FILE3\n";

#F3 header goes here

my %File2Parts;  # why call it F1parts? these numbers are
                 # coming from file 2. names matter.

while (my $PartNumber = <F2>) 
{
    chomp $PartNumber;
    next if $PartNumber =~ /^\s*$/;      # skip blank lines 
                              # often a "unseen" trailing blank line
                              # can cause troubles
    $File2Parts{$PartNumber} = 1;
}
    
close F2;

while (my $uline = <F1>) 
{
    chomp $uline;  #you need this when splitting on other than white s
+pace
    
    my @ufields = split(/\|/, $uline);
        
    my ($PartNumber, $Std_Cost, $Last_Paid_Price,
        $Qty_In_Stock, $Moto_Preferred_Part, $Rev,
        $Agile_Description) = (@ufields)[0,1,2,3,7,9,10];
    
    # print F3 "$PartNumber|$Std_Cost|$Last_Paid_Price|$Qty_In_Stock|$
+Moto_Preferred_Part|$Rev|$Agile_Description\n";
        
    if ($File2Parts{$PartNumber}) 
    {   
        print F3 "$PartNumber|$Std_Cost|$Last_Paid_Price|$Qty_In_Stock
+|$Moto_Preferred_Part|$Rev|$Agile_Description\n";
    }
}

close F1;
close F3;
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