diff --git a/llmfoundry/utils/config_utils.py b/llmfoundry/utils/config_utils.py
index 6b63cc669f..e5298ee46c 100644
--- a/llmfoundry/utils/config_utils.py
+++ b/llmfoundry/utils/config_utils.py
@@ -236,6 +236,22 @@ def to_container(
         return cfg  # type: ignore (dicts and lists are already in the correct format)
 
 
+def move_variables_to_section(cfg: Dict[str, Any]) -> Dict[str, Any]:
+    """Moves variables from the root of the config to the variables section.
+
+    This function is used to move variables from the root of the config to the
+    variables section. This is necessary because the variables section is
+    required for interpolation.
+    """
+    if 'variables' not in cfg:
+        cfg['variables'] = {}
+    for key in list(cfg.keys()):
+        if 'variables.' in key:
+            _, suffix = key.split('.', 1)
+            cfg['variables'][suffix] = cfg.pop(key)
+    return cfg
+
+
 T = TypeVar('T')
 
 
@@ -249,6 +265,8 @@ def make_dataclass_and_log_config(
 ) -> Tuple[Dict[str, Any], T]:
     """Converts a DictConfig to a dataclass and creates a logged config."""
     # Resolve all interpolation variables as early as possible
+    # before resolving, convert keys of the form `variables.key` to `variables[key]`.
+    cfg = move_variables_to_section(cfg)
     unstructured_config = om.to_container(cfg, resolve=True)
     assert isinstance(unstructured_config, dict)
     assert all(isinstance(k, str) for k in unstructured_config.keys())