diff --git a/changes/33502-longer-vars-not-processed-in-right-order b/changes/33502-longer-vars-not-processed-in-right-order
new file mode 100644
index 0000000000..66ecb887fe
--- /dev/null
+++ b/changes/33502-longer-vars-not-processed-in-right-order
@@ -0,0 +1 @@
+* Fixed an issue where longer variable names ($FLEET_VAR_HOST_END_USER_IDP_USERNAME_LOCAL_PART) with the same base ($FLEET_VAR_HOST_END_USER_IDP_USERNAME) was not processed in the right order.
\ No newline at end of file
diff --git a/server/variables/variables.go b/server/variables/variables.go
index aaad7508b7..3757330cc0 100644
--- a/server/variables/variables.go
+++ b/server/variables/variables.go
@@ -5,6 +5,7 @@ package variables
 
 import (
 	"regexp"
+	"sort"
 	"strings"
 )
 
@@ -59,7 +60,14 @@ func FindKeepDuplicates(contents string) []string {
 			}
 		}
 	}
-	return result
+
+	// sort result array by length descending, to ensure longer variables are processed first
+	sortedResults := make([]string, len(result))
+	copy(sortedResults, result)
+	sort.Slice(sortedResults, func(i, j int) bool {
+		return len(sortedResults[i]) > len(sortedResults[j])
+	})
+	return sortedResults
 }
 
 // dedupe removes duplicates from the slice and returns a map for O(1) lookups.
diff --git a/server/variables/variables_test.go b/server/variables/variables_test.go
index 2940485092..f83e621d81 100644
--- a/server/variables/variables_test.go
+++ b/server/variables/variables_test.go
@@ -102,7 +102,16 @@ func TestFindKeepDuplicates(t *testing.T) {
 		{
 			name:     "mixed variables with duplicates",
 			content:  "$FLEET_VAR_HOST_UUID, $FLEET_VAR_HOST_EMAIL, ${FLEET_VAR_HOST_UUID}",
-			expected: []string{"HOST_UUID", "HOST_EMAIL", "HOST_UUID"},
+			expected: []string{"HOST_EMAIL", "HOST_UUID", "HOST_UUID"},
+		},
+		{
+			name:    "sorted by length",
+			content: "$FLEET_VAR_HOST_END_USER_IDP_USERNAME, $FLEET_VAR_HOST_END_USER_IDP_USERNAME_LOCAL_PART, $FLEET_VAR_HOST_UUID",
+			expected: []string{
+				"HOST_END_USER_IDP_USERNAME_LOCAL_PART",
+				"HOST_END_USER_IDP_USERNAME",
+				"HOST_UUID",
+			},
 		},
 	}