diff --git a/.chloggen/confmap-fix-escape-bug.yaml b/.chloggen/confmap-fix-escape-bug.yaml
new file mode 100644
index 00000000000..7d8098e4177
--- /dev/null
+++ b/.chloggen/confmap-fix-escape-bug.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: Fixes issue where confmap could not escape `$$` when `confmap.unifyEnvVarExpansion` is enabled.
+
+# One or more tracking issues or pull requests related to the change
+issues: [10560]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext:
+
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: []
diff --git a/confmap/expand.go b/confmap/expand.go
index 8372ef120d2..16ef9dbe22f 100644
--- a/confmap/expand.go
+++ b/confmap/expand.go
@@ -81,6 +81,7 @@ func (mr *Resolver) expandValue(ctx context.Context, value any) (any, bool, erro
 // findURI attempts to find the first potentially expandable URI in input. It returns a potentially expandable
 // URI, or an empty string if none are found.
 // Note: findURI is only called when input contains a closing bracket.
+// We do not support escaping nested URIs (such as ${env:$${FOO}}, since that would result in an invalid outer URI (${env:${FOO}}).
 func (mr *Resolver) findURI(input string) string {
 	closeIndex := strings.Index(input, "}")
 	remaining := input[closeIndex+1:]
@@ -98,6 +99,21 @@ func (mr *Resolver) findURI(input string) string {
 		return mr.findURI(remaining)
 	}
 
+	index := openIndex - 1
+	currentRune := '$'
+	count := 0
+	for index >= 0 && currentRune == '$' {
+		currentRune = rune(input[index])
+		if currentRune == '$' {
+			count++
+		}
+		index--
+	}
+	// if we found an odd number of immediately $ preceding ${, then the expansion is escaped
+	if count%2 == 1 {
+		return ""
+	}
+
 	return input[openIndex : closeIndex+1]
 }
 
diff --git a/confmap/expand_test.go b/confmap/expand_test.go
index 9cca35c7008..25f54496845 100644
--- a/confmap/expand_test.go
+++ b/confmap/expand_test.go
@@ -577,3 +577,46 @@ func TestResolverDefaultProviderExpand(t *testing.T) {
 	require.NoError(t, err)
 	assert.Equal(t, map[string]any{"foo": "localhost"}, cfgMap.ToStringMap())
 }
+
+func Test_EscapedEnvVars(t *testing.T) {
+	const mapValue2 = "some map value"
+
+	expectedMap := map[string]any{
+		"test_map": map[string]any{
+			"recv.1":  "$MAP_VALUE_1",
+			"recv.2":  "$$MAP_VALUE_2",
+			"recv.3":  "$$MAP_VALUE_3",
+			"recv.4":  "$" + mapValue2,
+			"recv.5":  "some${MAP_VALUE_4}text",
+			"recv.6":  "${ONE}${TWO}",
+			"recv.7":  "text$",
+			"recv.8":  "$",
+			"recv.9":  "${1}${env:2}",
+			"recv.10": "some${env:MAP_VALUE_4}text",
+			"recv.11": "${env:" + mapValue2 + "}",
+			"recv.12": "${env:${MAP_VALUE_2}}",
+			"recv.13": "env:MAP_VALUE_2}${MAP_VALUE_2}{",
+			"recv.14": "${env:MAP_VALUE_2${MAP_VALUE_2}",
+			"recv.15": "$" + mapValue2,
+		}}
+
+	fileProvider := newFakeProvider("file", func(_ context.Context, uri string, _ WatcherFunc) (*Retrieved, error) {
+		return NewRetrieved(newConfFromFile(t, uri[5:]))
+	})
+	envProvider := newFakeProvider("env", func(_ context.Context, uri string, _ WatcherFunc) (*Retrieved, error) {
+		if uri == "env:MAP_VALUE_2" {
+			return NewRetrieved(mapValue2)
+		}
+		return nil, errors.New("should not be expanding any other env vars")
+	})
+
+	resolver, err := NewResolver(ResolverSettings{URIs: []string{filepath.Join("testdata", "expand-escaped-env.yaml")}, ProviderFactories: []ProviderFactory{fileProvider, envProvider}, ConverterFactories: nil, DefaultScheme: "env"})
+	require.NoError(t, err)
+
+	// Test that expanded configs are the same with the simple config with no env vars.
+	cfgMap, err := resolver.Resolve(context.Background())
+	require.NoError(t, err)
+	m := cfgMap.ToStringMap()
+	assert.Equal(t, expectedMap, m)
+
+}
diff --git a/confmap/resolver.go b/confmap/resolver.go
index 7c9ed303c73..148049a5ad3 100644
--- a/confmap/resolver.go
+++ b/confmap/resolver.go
@@ -12,6 +12,8 @@ import (
 
 	"go.uber.org/multierr"
 	"go.uber.org/zap"
+
+	"go.opentelemetry.io/collector/internal/featuregates"
 )
 
 // follows drive-letter specification:
@@ -171,7 +173,13 @@ func (mr *Resolver) Resolve(ctx context.Context) (*Conf, error) {
 		if err != nil {
 			return nil, err
 		}
-		cfgMap[k] = val
+
+		if v, ok := val.(string); ok && featuregates.UseUnifiedEnvVarExpansionRules.IsEnabled() {
+			cfgMap[k] = strings.ReplaceAll(v, "$$", "$")
+		} else {
+			cfgMap[k] = val
+		}
+
 	}
 	retMap = NewFromStringMap(cfgMap)
 
diff --git a/confmap/testdata/expand-escaped-env.yaml b/confmap/testdata/expand-escaped-env.yaml
new file mode 100644
index 00000000000..6b2cd162831
--- /dev/null
+++ b/confmap/testdata/expand-escaped-env.yaml
@@ -0,0 +1,31 @@
+test_map:
+  # $$ -> escaped $
+  recv.1: "$$MAP_VALUE_1"
+  # $$$ -> escaped $ + $MAP_VALUE_2
+  recv.2: "$$$MAP_VALUE_2"
+  # $$$$ -> two escaped $
+  recv.3: "$$$$MAP_VALUE_3"
+  # $$$ -> escaped $ + substituted env var
+  recv.4: "$$${MAP_VALUE_2}"
+  # escaped $ in the middle
+  recv.5: "some$${MAP_VALUE_4}text"
+  # two escaped $
+  recv.6: "$${ONE}$${TWO}"
+  # trailing escaped $
+  recv.7: "text$$"
+  # escaped $ alone
+  recv.8: "$$"
+  # Escape numbers
+  recv.9: "$${1}$${env:2}"
+  # can escape provider
+  recv.10: "some$${env:MAP_VALUE_4}text"
+  # can escape outer when nested
+  recv.11: "$${env:${MAP_VALUE_2}}"
+  # can escape inner and outer when nested
+  recv.12: "$${env:$${MAP_VALUE_2}}"
+  # can escape partial
+  recv.13: "env:MAP_VALUE_2}$${MAP_VALUE_2}{"
+  # can escape partial
+  recv.14: "${env:MAP_VALUE_2$${MAP_VALUE_2}"
+  # $$$ -> escaped $ + substituted env var
+  recv.15: "$$${env:MAP_VALUE_2}"