diff --git a/CHANGELOG.md b/CHANGELOG.md
index 688218f8aee..5433b39cba5 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -11,6 +11,7 @@
 * [CHANGE] **BREAKING CHANGE** Remove deprecated ingester gRPC endpoint and data encoding. The current data encoding was introduced in v1.0.  If running earlier versions, first upgrade to v1.0 through v1.2 and allow time for all blocks to be switched to the "v1" data encoding. [#1215](https://github.com/grafana/tempo/pull/1215) (@mdisibio)
 * [FEATURE] Added support for full backend search. [#1174](https://github.com/grafana/tempo/pull/1174) (@joe-elliott)
   **BREAKING CHANGE** Moved `querier.search_max_result_limit` and `querier.search_default_result_limit` to `query_frontend.search.max_result_limit` and `query_frontend.search.default_result_limit`
+* [ENHANCEMENT]: Improve variables expansion support [#1212](https://github.com/grafana/tempo/pull/1212) @irizzant
 * [ENHANCEMENT] Expose `upto` parameter on hedged requests for each backend with `hedge_requests_up_to`. [#1085](https://github.com/grafana/tempo/pull/1085) (@joe-elliott)
 * [ENHANCEMENT] Search: drop use of TagCache, extract tags and tag values on-demand [#1068](https://github.com/grafana/tempo/pull/1068) (@kvrhdn)
 * [ENHANCEMENT] Jsonnet: add `$._config.namespace` to filter by namespace in cortex metrics [#1098](https://github.com/grafana/tempo/pull/1098) (@mapno)
diff --git a/operations/jsonnet/microservices/compactor.libsonnet b/operations/jsonnet/microservices/compactor.libsonnet
index 875f83acf4f..95b51487e64 100644
--- a/operations/jsonnet/microservices/compactor.libsonnet
+++ b/operations/jsonnet/microservices/compactor.libsonnet
@@ -21,12 +21,14 @@
       '-config.file=/conf/tempo.yaml',
       '-mem-ballast-size-mbs=' + $._config.ballast_size_mbs,
     ]) +
+    (if $._config.variables_expansion then container.withEnvMixin($._config.variables_expansion_env_mixin) else {}) +
     container.withVolumeMounts([
       volumeMount.new(tempo_config_volume, '/conf'),
       volumeMount.new(tempo_overrides_config_volume, '/overrides'),
     ]) +
     $.util.withResources($._config.compactor.resources) +
-    $.util.readinessProbe,
+    $.util.readinessProbe +
+    (if $._config.variables_expansion then container.withArgsMixin(['--config.expand-env=true']) else {}),
 
   tempo_compactor_deployment:
     deployment.new(target_name,
diff --git a/operations/jsonnet/microservices/config.libsonnet b/operations/jsonnet/microservices/config.libsonnet
index be2cc146e44..b3f15da7d4c 100644
--- a/operations/jsonnet/microservices/config.libsonnet
+++ b/operations/jsonnet/microservices/config.libsonnet
@@ -9,6 +9,8 @@
 
   _config+:: {
     gossip_member_label: 'tempo-gossip-member',
+    variables_expansion: false,
+    variables_expansion_env_mixin: null,
     compactor: {
       replicas: 1,
       resources: {
diff --git a/operations/jsonnet/microservices/distributor.libsonnet b/operations/jsonnet/microservices/distributor.libsonnet
index 983d22b624a..1fae4221225 100644
--- a/operations/jsonnet/microservices/distributor.libsonnet
+++ b/operations/jsonnet/microservices/distributor.libsonnet
@@ -21,12 +21,14 @@
       '-config.file=/conf/tempo.yaml',
       '-mem-ballast-size-mbs=' + $._config.ballast_size_mbs,
     ]) +
+    (if $._config.variables_expansion then container.withEnvMixin($._config.variables_expansion_env_mixin) else {}) +
     container.withVolumeMounts([
       volumeMount.new(tempo_config_volume, '/conf'),
       volumeMount.new(tempo_overrides_config_volume, '/overrides'),
     ]) +
     $.util.withResources($._config.distributor.resources) +
-    $.util.readinessProbe,
+    $.util.readinessProbe +
+    (if $._config.variables_expansion then container.withArgsMixin(['--config.expand-env=true']) else {}),
 
   tempo_distributor_deployment:
     deployment.new(target_name,
diff --git a/operations/jsonnet/microservices/frontend.libsonnet b/operations/jsonnet/microservices/frontend.libsonnet
index 210e8125f38..3ec220463e0 100644
--- a/operations/jsonnet/microservices/frontend.libsonnet
+++ b/operations/jsonnet/microservices/frontend.libsonnet
@@ -23,11 +23,13 @@
       '-config.file=/conf/tempo.yaml',
       '-mem-ballast-size-mbs=' + $._config.ballast_size_mbs,
     ]) +
+    (if $._config.variables_expansion then container.withEnvMixin($._config.variables_expansion_env_mixin) else {}) +
     container.withVolumeMounts([
       volumeMount.new(tempo_config_volume, '/conf'),
     ]) +
     $.util.withResources($._config.query_frontend.resources) +
-    $.util.readinessProbe,
+    $.util.readinessProbe +
+    (if $._config.variables_expansion then container.withArgsMixin(['--config.expand-env=true']) else {}),
 
   tempo_query_container::
     container.new('tempo-query', $._images.tempo_query) +
diff --git a/operations/jsonnet/microservices/ingester.libsonnet b/operations/jsonnet/microservices/ingester.libsonnet
index 2d855fa918a..38c002209b9 100644
--- a/operations/jsonnet/microservices/ingester.libsonnet
+++ b/operations/jsonnet/microservices/ingester.libsonnet
@@ -33,13 +33,15 @@
       '-config.file=/conf/tempo.yaml',
       '-mem-ballast-size-mbs=' + $._config.ballast_size_mbs,
     ]) +
+    (if $._config.variables_expansion then container.withEnvMixin($._config.variables_expansion_env_mixin) else {}) +
     container.withVolumeMounts([
       volumeMount.new(tempo_config_volume, '/conf'),
       volumeMount.new(tempo_data_volume, '/var/tempo'),
       volumeMount.new(tempo_overrides_config_volume, '/overrides'),
     ]) +
     $.util.withResources($._config.ingester.resources) +
-    $.util.readinessProbe,
+    $.util.readinessProbe +
+    (if $._config.variables_expansion then container.withArgsMixin(['--config.expand-env=true']) else {}),
 
   tempo_ingester_statefulset:
     statefulset.new(
diff --git a/operations/jsonnet/microservices/querier.libsonnet b/operations/jsonnet/microservices/querier.libsonnet
index e3061a9d9ba..9ba6451722e 100644
--- a/operations/jsonnet/microservices/querier.libsonnet
+++ b/operations/jsonnet/microservices/querier.libsonnet
@@ -20,12 +20,14 @@
       '-config.file=/conf/tempo.yaml',
       '-mem-ballast-size-mbs=' + $._config.ballast_size_mbs,
     ]) +
+    (if $._config.variables_expansion then container.withEnvMixin($._config.variables_expansion_env_mixin) else {}) +
     container.withVolumeMounts([
       volumeMount.new(tempo_config_volume, '/conf'),
       volumeMount.new(tempo_overrides_config_volume, '/overrides'),
     ]) +
     $.util.withResources($._config.querier.resources) +
-    $.util.readinessProbe,
+    $.util.readinessProbe +
+    (if $._config.variables_expansion then container.withArgsMixin(['--config.expand-env=true']) else {}),
 
   tempo_querier_deployment:
     deployment.new(