diff --git a/doc/stacker_yaml.md b/doc/stacker_yaml.md
index 450170d4..62ba9103 100644
--- a/doc/stacker_yaml.md
+++ b/doc/stacker_yaml.md
@@ -352,6 +352,9 @@ substitution file. An error will be printed that explains how to rewrite it:
 
    error "A=B" was provided as a substitution and unsupported placeholder "${A}" was found. Replace "${A}" with "${{A}}" to use the substitution.
 
+Shell variables whose names only start with a provided key, such as `$FOO_BAR`
+when `FOO` is provided, are not placeholders for that key and are left alone.
+
 Substitutions can also be specified in a yaml file given with the argument
 `--substitute-file`, with any number of key: value pairs:
 
diff --git a/pkg/types/stackerfile.go b/pkg/types/stackerfile.go
index f19de39e..a42bb0d1 100644
--- a/pkg/types/stackerfile.go
+++ b/pkg/types/stackerfile.go
@@ -77,14 +77,28 @@ func substitute(content string, substitutions []string) (string, error) {
 		nobracket := fmt.Sprintf("$%s", membs[0])
 		onebracket := fmt.Sprintf("${%s}", membs[0])
 		bad_content := content
-		for _, unsupp_placeholder := range []string{nobracket, onebracket} {
-			if strings.Contains(content, unsupp_placeholder) {
-				msg := fmt.Sprintf("%q was provided as a substitution "+
-					"and unsupported placeholder %q was found. "+
-					"Replace %q with \"${{%s}}\" to use the substitution.\n", subst,
-					unsupp_placeholder, unsupp_placeholder, membs[0])
-				unsupported_messages = append(unsupported_messages, msg)
-			}
+
+		// $FOO is only a placeholder for FOO if it isn't followed by
+		// another character of a variable name, e.g. $FOO_BAR is not.
+		nobracket_re, err := regexp.Compile(regexp.QuoteMeta(nobracket) + `([^A-Za-z0-9_]|$)`)
+		if err != nil {
+			return "", err
+		}
+
+		unsupp_placeholders := []string{}
+		if nobracket_re.MatchString(content) {
+			unsupp_placeholders = append(unsupp_placeholders, nobracket)
+		}
+		if strings.Contains(content, onebracket) {
+			unsupp_placeholders = append(unsupp_placeholders, onebracket)
+		}
+
+		for _, unsupp_placeholder := range unsupp_placeholders {
+			msg := fmt.Sprintf("%q was provided as a substitution "+
+				"and unsupported placeholder %q was found. "+
+				"Replace %q with \"${{%s}}\" to use the substitution.\n", subst,
+				unsupp_placeholder, unsupp_placeholder, membs[0])
+			unsupported_messages = append(unsupported_messages, msg)
 		}
 
 		// the ${FOO:bar} syntax never worked! but since we documented it
diff --git a/pkg/types/types_test.go b/pkg/types/types_test.go
index c741150f..45c5d879 100644
--- a/pkg/types/types_test.go
+++ b/pkg/types/types_test.go
@@ -108,6 +108,27 @@ func TestSubstitute(t *testing.T) {
 		t.Fatalf("substitution with unsupported placeholders should have failed but didn't")
 	}
 
+	// variables which merely start with the name of a provided
+	// substitution, e.g. $VERSION_ID for VERSION, are not placeholders
+	s = "$VERSION_ID $VERSIONS ${VERSION_ID} ${VERSIONS:-1} ${{VERSION}}"
+	result, err = substitute(s, []string{"VERSION=1.0"})
+	if err != nil {
+		t.Fatalf("failed substitution: %s", err)
+	}
+
+	expected = "$VERSION_ID $VERSIONS ${VERSION_ID} ${VERSIONS:-1} 1.0"
+	if result != expected {
+		t.Fatalf("bad substitution result, expected '%s' got '%s'", expected, result)
+	}
+
+	// but $VERSION followed by a non-name character still is
+	for _, s := range []string{"$VERSION", "$VERSION/bin", "$VERSION-rc1", "\"$VERSION\""} {
+		_, err = substitute(s, []string{"VERSION=1.0"})
+		if err == nil {
+			t.Fatalf("substitution of %q with unsupported placeholder should have failed but didn't", s)
+		}
+	}
+
 	// a double bracket placeholder with no default value must be provided
 	s = "${{NOT_SET}}"
 	_, err = substitute(s, []string{})