diff --git a/.chloggen/confmap-fix-non-string-nil-case.yaml b/.chloggen/confmap-fix-non-string-nil-case.yaml
new file mode 100644
index 00000000000..7f9a9871640
--- /dev/null
+++ b/.chloggen/confmap-fix-non-string-nil-case.yaml
@@ -0,0 +1,25 @@
+# Use this changelog template to create an entry for release notes.
+
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: bug_fix
+
+# The name of the component, or a single word describing the area of concern, (e.g. otlpreceiver)
+component: confmap
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: Fix bug where an unset env var used with a non-string field resulted in a panic
+
+# One or more tracking issues or pull requests related to the change
+issues: [10950]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext:
+
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: []
diff --git a/confmap/confmap.go b/confmap/confmap.go
index 781ad68ef36..a340dabbd1c 100644
--- a/confmap/confmap.go
+++ b/confmap/confmap.go
@@ -250,13 +250,13 @@ func caseSensitiveMatchName(a, b string) bool {
 	return a == b
 }
 
-func castTo(exp expandedValue, useOriginal bool) (any, error) {
+func castTo(exp expandedValue, useOriginal bool) any {
 	// If the target field is a string, use `exp.Original` or fail if not available.
 	if useOriginal {
-		return exp.Original, nil
+		return exp.Original
 	}
 	// Otherwise, use the parsed value (previous behavior).
-	return exp.Value, nil
+	return exp.Value
 }
 
 // Check if a reflect.Type is of the form T, where:
@@ -284,7 +284,14 @@ func useExpandValue() mapstructure.DecodeHookFuncType {
 		to reflect.Type,
 		data any) (any, error) {
 		if exp, ok := data.(expandedValue); ok {
-			return castTo(exp, to.Kind() == reflect.String)
+			v := castTo(exp, to.Kind() == reflect.String)
+			// See https://github.com/open-telemetry/opentelemetry-collector/issues/10949
+			// If the `to.Kind` is not a string, then expandValue's original value is useless and
+			// the casted-to value will be nil. In that scenario, we need to use the default value of `to`'s kind.
+			if v == nil {
+				return reflect.Zero(to).Interface(), nil
+			}
+			return v, nil
 		}
 
 		switch to.Kind() {
diff --git a/confmap/internal/e2e/types_test.go b/confmap/internal/e2e/types_test.go
index 875fd44bc4c..ed84d4faef5 100644
--- a/confmap/internal/e2e/types_test.go
+++ b/confmap/internal/e2e/types_test.go
@@ -645,3 +645,14 @@ func TestIssue10937_ComplexType(t *testing.T) {
 	require.NoError(t, err)
 	require.Equal(t, []map[string][]any{{"key": {1234}}}, cfgNotStringy.Field)
 }
+
+func TestIssue10949_UnsetVar(t *testing.T) {
+	resolver := NewResolver(t, "types_expand.yaml")
+	conf, err := resolver.Resolve(context.Background())
+	require.NoError(t, err)
+
+	var cfg TargetConfig[int]
+	err = conf.Unmarshal(&cfg)
+	require.NoError(t, err)
+	require.Equal(t, 0, cfg.Field)
+}