diff --git a/CHANGELOG.md b/CHANGELOG.md
index f7f7f567..ff1f274f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -15,6 +15,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - #822: The CPF resource processor now supports system expressions and macros in CPF merge files
 - #578 Added functionality to record and display IPM history of install, uninstall, load, and update
 - #961: Adding creation of a lock file for a module by using the `-create-lockfile` flag on install.
+- #1013: Implement recursive placeholder resolution in Default parameters
 
 ### Changed
 - #316: All parameters, except developer mode, included with a `load`, `install` or `update` command will be propagated to dependencies
diff --git a/src/cls/IPM/Storage/Module.cls b/src/cls/IPM/Storage/Module.cls
index ce8ba82c..6215a3a7 100644
--- a/src/cls/IPM/Storage/Module.cls
+++ b/src/cls/IPM/Storage/Module.cls
@@ -1775,6 +1775,7 @@ Method %Evaluate(
     set customParams("version") = ..VersionString
     set customParams("verbose") = +$get(pParams("Verbose"))
     set tAttrValue = ##class(%IPM.Utils.Module).%EvaluateMacro(tAttrValue)
+    do ##class(%IPM.Storage.ModuleSetting.Default).ResolvePlaceholders(.customParams)
     set tAttrValue = ##class(%IPM.Storage.ModuleSetting.Default).EvaluateAttribute(tAttrValue,.customParams)
     set attrValue = ##class(%IPM.Utils.Module).%EvaluateSystemExpression(tAttrValue)
 
diff --git a/src/cls/IPM/Storage/ModuleSetting/Default.cls b/src/cls/IPM/Storage/ModuleSetting/Default.cls
index 543500c3..e4544437 100644
--- a/src/cls/IPM/Storage/ModuleSetting/Default.cls
+++ b/src/cls/IPM/Storage/ModuleSetting/Default.cls
@@ -57,6 +57,40 @@ ClassMethod EvaluateAttribute(
     return attribute
 }
 
+ClassMethod ResolvePlaceholders(ByRef customParams)
+{
+    set found = 1
+    set maxLevels = 20
+
+    while (found && (maxLevels > 0)) {
+        set found = 0
+        set maxLevels = maxLevels - 1
+        set param = ""
+
+        for {
+            set param = $order(customParams(param), 1, data)
+            quit:param=""
+            continue:data'["${"
+
+            set varExpr = "${" _ $piece($piece(data, "${", 2), "}") _ "}"
+            set resolved = ##class(%IPM.Utils.Module).%EvaluateSystemExpression(varExpr)
+
+            if resolved = varExpr {
+                set internalVar = $piece($piece(data, "${", 2), "}")
+                set resolved = $get(customParams(internalVar), varExpr)
+            }
+
+            if resolved '= varExpr {
+                set prefix = $piece(data, "${", 1)
+                set suffix = $piece(data, "}", 2, *)
+                set customParams(param) = prefix _ resolved _ suffix
+                set found = 1
+            }
+
+        }
+    }
+}
+
 Storage Default
 {
 <Data name="DefaultState">
diff --git a/tests/integration_tests/Test/PM/Integration/Module.cls b/tests/integration_tests/Test/PM/Integration/Module.cls
new file mode 100644
index 00000000..945b9336
--- /dev/null
+++ b/tests/integration_tests/Test/PM/Integration/Module.cls
@@ -0,0 +1,88 @@
+Class Test.PM.Integration.Module Extends Test.PM.Integration.Base
+{
+
+Parameter CommonPathPrefix As STRING = "varresolver";
+
+Parameter ModuleName As STRING = "demo-module1";
+
+/// This test validates that the IPM engine can handle "chained" ${variables}
+/// (placeholders that resolve to other placeholders).
+/// 1. Generates a 'module.xml' from XData with deep variable dependencies.
+/// 2. Executes IPM Shell 'load' to verify multi-pass expansion.
+/// 3. Ensures no unresolved placeholders remain after the load process.
+Method TestNestedPlaceholderVar()
+{
+    do $$$LogMessage(" start Loading the "_..#ModuleName_" module")
+    set status = ..CreateModuleXml(.moduleDir)
+    do $$$AssertStatusOK(status,"Created the xml file on "_moduleDir)
+
+    set status = ##class(%IPM.Main).Shell("load "_moduleDir)
+    do $$$AssertStatusOK(status,"Loaded "_..#CommonPathPrefix_" module successfully from "_moduleDir)
+
+    set module = ##class(%IPM.Storage.Module).NameOpen(..#ModuleName)
+    do $$$AssertTrue($isobject(module), "Module "_..#ModuleName_" exists in IPM and version is "_ module.Version.ToString())
+
+        do $$$LogMessage("List all modules")
+    set status = ##class(%IPM.Main).Shell("list")
+
+    set status = ##class(%IPM.Main).Shell("uninstall "_..#ModuleName)
+    do $$$AssertStatusOK(status,"uninstalled module "_..#ModuleName_" successfully.")
+
+    set status = ##class(%File).Delete(##class(%File).NormalizeFilename("module.xml",moduleDir))
+    do $$$AssertStatusOK(status,"Deleted the module.xml file from "_moduleDir)
+}
+
+Method CreateModuleXml(Output pModuleDir) As %Status
+{
+    #define NormalizeDirectory(%path)   ##class(%File).NormalizeDirectory(%path)
+    #define UTRoot                      ^UnitTestRoot
+
+    set sc = 1
+    set testRoot = $$$NormalizeDirectory($get($$$UTRoot))
+    set pModuleDir = $$$NormalizeDirectory(##class(%File).GetDirectory(testRoot)_"/_data/"_..#CommonPathPrefix_"/")
+
+    if '##class(%File).DirectoryExists(pModuleDir) {
+        set sc = ##class(%File).CreateDirectoryChain(pModuleDir)
+    }
+    do $$$AssertStatusOK(sc,"Directory created "_pModuleDir)
+    set stream = ##class(%Dictionary.CompiledXData).%OpenId(..%ClassName(1)_"||TestModuleXML").Data
+    set fileStream = ##class(%Stream.FileBinary).%New()
+    set fileStream.Filename=##class(%File).NormalizeFilename("module.xml",pModuleDir)
+    set sc = fileStream.CopyFromAndSave(stream)
+    do $$$AssertStatusOK(1,"module.xml File created on "_pModuleDir)
+
+    return sc
+}
+
+/// Sample module file
+XData TestModuleXML [ MimeType = application/xml ]
+{
+<?xml version="1.0" encoding="UTF-8"?>
+<Export generator="Cache" version="25">
+	<Document name="demo-module1.ZPM">
+		<Module>
+			<Name>demo-module1</Name>
+			<Version>1.0.0</Version>
+			<Description>testing the name resolved</Description>
+			<Packaging>module</Packaging>
+			<Default Name="count" Value="7"/>
+			<Default Name="dataversion" Value="${version}/" />
+			<Default Name="datadefaultmgrdir" Value="${mgrdir}/" />
+			<Default Name="mTestPlaceHolder" Value="${dataDefaultTest2}/xtest/${version}/${mgrdir}/${mTestVersion}/${datapath1}" />
+			<Default Name="datadefaultcspdir" Value="${cspdir}/" />
+			<Default Name="dataDefaultTest2" Value="${datadefaultcspdir}/xdata" />
+			<Default Name="dataDefaultTest3" Value="${dataDefaultTest2}/xtest" />
+			<Default Name="mTestVersion" Value="${dataDefaultTest2}/xtest/${version}" />
+			<Default Name="ipmtest" Value="TESTING MY STRING"/>
+			<Default Name="ipmdir" Value="/usr/irissys/mgr/user/mts"/>
+			<Default Name="datapath" Value="${libdir}data/" />
+			<Default Name="datapath1" Value="${ipmdir}data/" />
+			<SystemRequirements Version=">=2020.1" Interoperability="enabled"/>
+			<SourcesRoot>src</SourcesRoot>
+			<AfterInstallMessage>Module installed successfully!</AfterInstallMessage>
+		</Module>
+	</Document>
+</Export>
+}
+
+}
diff --git a/tests/unit_tests/Test/PM/Unit/Module.cls b/tests/unit_tests/Test/PM/Unit/Module.cls
index bffe7cd1..447f42e1 100644
--- a/tests/unit_tests/Test/PM/Unit/Module.cls
+++ b/tests/unit_tests/Test/PM/Unit/Module.cls
@@ -60,4 +60,47 @@ Method TestFixUndefinedCLIGenCommand()
     do $$$AssertStatusOK(sc, "AddWebApps method must now process web app list without error.")
 }
 
+Method TestResolveAllVariables()
+{
+    //Setup Test Data
+    set customParams("count") = 7
+    set customParams("version") = "1.0.0"
+    set customParams("datadefaultcspdir") = "${cspdir}"
+    set customParams("datadefaultmgrdir") = "${mgrdir}"
+    set customParams("dataversion") = "${version}"
+    set customParams("dataDefaultTest2") = "${datadefaultcspdir}xdata"
+    set customParams("dataDefaultTest3") = "${dataDefaultTest2}xtest"
+    set customParams("datapath") = "${libdir}data/"
+    set customParams("ipmdir") = "/usr/irissys/mgr/user/mts"
+    set customParams("datapath1") = "${ipmdir}data/"
+    set customParams("mTestVersion") = "${dataDefaultTest2}/xtest/${version}"
+    set customParams("mTestPlaceHolder") = "${dataDefaultTest2}/xtest/${version}${mgrdir}${mTestVersion}${datapath1}"
+
+    merge customParamsIn = customParams
+    // output
+    set customParamsOut("count")=7
+    set customParamsOut("dataDefaultTest2")="/usr/irissys/csp/xdata"
+    set customParamsOut("dataDefaultTest3")="/usr/irissys/csp/xdataxtest"
+    set customParamsOut("datadefaultcspdir")=##class(%IPM.Utils.Module).%EvaluateSystemExpression("${cspdir}")
+    set customParamsOut("datadefaultmgrdir")=##class(%IPM.Utils.Module).%EvaluateSystemExpression("${mgrdir}")
+    set customParamsOut("datapath")=##class(%IPM.Utils.Module).%EvaluateSystemExpression("${libdir}")_"data/"
+    set customParamsOut("datapath1")="/usr/irissys/mgr/user/mtsdata/"
+    set customParamsOut("dataversion")="1.0.0"
+    set customParamsOut("ipmdir")="/usr/irissys/mgr/user/mts"
+    set customParamsOut("mTestPlaceHolder")="/usr/irissys/csp/xdata/xtest/1.0.0/usr/irissys/mgr//usr/irissys/csp/xdata/xtest/1.0.0/usr/irissys/mgr/user/mtsdata/"
+    set customParamsOut("mTestVersion")="/usr/irissys/csp/xdata/xtest/1.0.0"
+    set customParamsOut("version")="1.0.0"
+
+    do ##class(%IPM.Storage.ModuleSetting.Default).ResolvePlaceholders(.customParams)
+
+    do $$$LogMessage("Validate all placholder variables")
+
+    set variables = $listbuild("count","dataDefaultTest2","dataDefaultTest3","datadefaultcspdir","datadefaultmgrdir","datapath","datapath1","dataversion","ipmdir","mTestPlaceHolder","mTestVersion","version")
+
+    set ptr=0
+    while $listnext(variables, ptr, variable){
+        do $$$AssertEquals(customParams(variable), customParamsOut(variable), variable_" is resolved correctly and the placeholder "_customParamsIn(variable)_" value is "_customParamsOut(variable))
+    }
+}
+
 }