diff --git a/src/config.cpp b/src/config.cpp
index bfdffc1..dd4a0ce 100644
--- a/src/config.cpp
+++ b/src/config.cpp
@@ -519,14 +519,14 @@ CParseResult CConfig::parseLine(std::string line, bool dynamic) {
             return result;
         }
 
-        if (*LHS.begin() == '$')
-            return parseVariable(LHS, RHS, dynamic);
+        const bool ISVARIABLE = *LHS.begin() == '$';
 
         // limit unwrapping iterations to 100. if exceeds, raise error
         for (size_t i = 0; i < 100; ++i) {
             bool anyMatch = false;
             for (auto& var : impl->variables) {
-                const auto LHSIT = LHS.find("$" + var.name);
+                // don't parse LHS variables if this is a variable...
+                const auto LHSIT = ISVARIABLE ? std::string::npos : LHS.find("$" + var.name);
                 const auto RHSIT = RHS.find("$" + var.name);
 
                 if (LHSIT != std::string::npos)
@@ -551,6 +551,9 @@ CParseResult CConfig::parseLine(std::string line, bool dynamic) {
             }
         }
 
+        if (ISVARIABLE)
+            return parseVariable(LHS, RHS, dynamic);
+
         bool found = false;
         for (auto& h : impl->handlers) {
             if (!h.options.allowFlags && h.name != LHS)
diff --git a/tests/config/config.conf b/tests/config/config.conf
index e0f564f..f08b8b7 100644
--- a/tests/config/config.conf
+++ b/tests/config/config.conf
@@ -67,6 +67,10 @@ specialAnonymous {
 
 testCategory:testValueHex = 0xFFfFaAbB
 
+$RECURSIVE1 = a
+$RECURSIVE2 = $RECURSIVE1b
+testStringRecursive = $RECURSIVE2c
+
 testStringQuotes = "Hello World!"
 #testDefault = 123
 
diff --git a/tests/parse/main.cpp b/tests/parse/main.cpp
index ef7524f..ae2c4f8 100644
--- a/tests/parse/main.cpp
+++ b/tests/parse/main.cpp
@@ -89,6 +89,7 @@ int main(int argc, char** argv, char** envp) {
         config.addConfigValue("testEnv", "");
         config.addConfigValue("testVar", (Hyprlang::INT)0);
         config.addConfigValue("testStringQuotes", "");
+        config.addConfigValue("testStringRecursive", "");
         config.addConfigValue("testCategory:testValueInt", (Hyprlang::INT)0);
         config.addConfigValue("testCategory:testValueHex", (Hyprlang::INT)0xA);
         config.addConfigValue("testCategory:nested1:testValueNest", (Hyprlang::INT)0);
@@ -178,12 +179,16 @@ int main(int argc, char** argv, char** envp) {
         // test variables
         std::cout << " → Testing variables\n";
         EXPECT(std::any_cast<int64_t>(config.getConfigValue("testVar")), 13371337);
+        EXPECT(std::any_cast<const char*>(config.getConfigValue("testStringRecursive")), std::string{"abc"});
 
         // test dynamic variables
         std::cout << " → Testing dynamic variables\n";
         EXPECT(config.parseDynamic("$MY_VAR_2 = 420").error, false);
         EXPECT(std::any_cast<int64_t>(config.getConfigValue("testVar")), 1337420);
 
+        EXPECT(config.parseDynamic("$RECURSIVE1 = d").error, false);
+        EXPECT(std::any_cast<const char*>(config.getConfigValue("testStringRecursive")), std::string{"dbc"});
+
         // test env variables
         std::cout << " → Testing env variables\n";
         EXPECT(std::any_cast<const char*>(config.getConfigValue("testEnv")), std::string{getenv("SHELL")});