diff --git a/imagebuildah/executor.go b/imagebuildah/executor.go
index f479eea7398..a3cbc1c3400 100644
--- a/imagebuildah/executor.go
+++ b/imagebuildah/executor.go
@@ -6,6 +6,7 @@ import (
 	"fmt"
 	"io"
 	"os"
+	"regexp"
 	"slices"
 	"strconv"
 	"strings"
@@ -519,6 +520,12 @@ func (b *Executor) getImageTypeAndHistoryAndDiffIDs(ctx context.Context, imageID
 	return oci.OS, oci.Architecture, manifestFormat, oci.History, oci.RootFS.DiffIDs, nil
 }
 
+// Checks if is word is using any variable in the form of `$VAR`, `${VAR}` etc
+func containsVariable(arg string) bool {
+	re := regexp.MustCompile(`\$\{?[a-zA-Z_][a-zA-Z0-9_]*\}?`)
+	return re.MatchString(arg)
+}
+
 func (b *Executor) buildStage(ctx context.Context, cleanupStages map[int]*StageExecutor, stages imagebuilder.Stages, stageIndex int) (imageID string, ref reference.Canonical, onlyBaseImage bool, err error) {
 	stage := stages[stageIndex]
 	ib := stage.Builder
@@ -600,7 +607,26 @@ func (b *Executor) buildStage(ctx context.Context, cleanupStages map[int]*StageE
 				prefix += ": "
 			}
 			suffix := "\n"
-			fmt.Fprintf(stageExecutor.executor.out, prefix+format+suffix, args...)
+			builtinArgs := argsMapToSlice(stage.Builder.BuiltinArgDefaults)
+			headingArgs := argsMapToSlice(stage.Builder.HeadingArgs)
+			userArgs := argsMapToSlice(stage.Builder.Args)
+			userArgs = append(builtinArgs, append(userArgs, headingArgs...)...)
+			processedArgs := make([]any, 0, len(args))
+			for i := range args {
+				if arg, ok := args[i].(string); ok {
+					if containsVariable(arg) {
+						processedArg, err := imagebuilder.ProcessWord(arg, userArgs)
+						if err != nil {
+							processedArg = arg
+							fmt.Fprintf(stageExecutor.executor.err, "while replacing arg variables with values for format in logging %q: %v\n", arg, err)
+						}
+						processedArgs = append(processedArgs, processedArg)
+					} else {
+						processedArgs = append(processedArgs, arg)
+					}
+				}
+			}
+			fmt.Fprintf(stageExecutor.executor.out, prefix+format+suffix, processedArgs...)
 		}
 	}
 	b.stagesLock.Unlock()
diff --git a/tests/bud.bats b/tests/bud.bats
index d0c10e79687..fa749fa1a18 100644
--- a/tests/bud.bats
+++ b/tests/bud.bats
@@ -5425,10 +5425,11 @@ EOM
 
   ${OCI} --version
   _prefetch alpine busybox
-
-  run_buildah build --build-arg base=alpine --build-arg toolchainname=busybox --build-arg destinationpath=/tmp --pull=false $WITH_POLICY_JSON -f $BUDFILES/from-with-arg/Containerfile .
+  toolchainname=busybox
+  destinationpath=/tmp
+  run_buildah build --build-arg base=alpine --build-arg toolchainname=$toolchainname --build-arg destinationpath=$destinationpath --pull=false $WITH_POLICY_JSON -f $BUDFILES/from-with-arg/Containerfile .
   expect_output --substring "FROM alpine"
-  expect_output --substring 'STEP 4/4: COPY --from=\$\{toolchainname\} \/ \$\{destinationpath\}'
+  expect_output --substring "STEP 4/4: COPY --from=$toolchainname \/ $destinationpath"
   run_buildah rm -a
 }
 
@@ -6186,7 +6187,7 @@ _EOF
   # must push cache twice i.e for first step and second step
   run printf "STEP 2/3: ARG VAR=hello\n--> Pushing cache"
   step1=$output
-  run printf "STEP 3/3: RUN echo \"Hello \$VAR\""
+  run printf "STEP 3/3: RUN echo \"Hello hello\""
   step2=$output
   run printf "Hello hello"
   step3=$output
@@ -8874,3 +8875,42 @@ _EOF
   run_buildah --root=${TEST_SCRATCH_DIR}/newroot --storage-opt=imagestore=${TEST_SCRATCH_DIR}/root build --pull=never ${contextdir}
   run_buildah --root=${TEST_SCRATCH_DIR}/newroot --storage-opt=imagestore=${TEST_SCRATCH_DIR}/root build --pull=never --squash ${contextdir}
 }
+
+@test "bud build argument expansion in log" {
+  _prefetch alpine
+  target=build-arg-expand-log
+
+  # Test basic build argument expansion
+  run_buildah build $WITH_POLICY_JSON -t ${target} --build-arg foo=foovalue -f $BUDFILES/build-arg/Dockerfile $BUDFILES/build-arg
+  expect_output --substring "RUN echo foovalue"
+
+  # Test with a more complex build argument
+  run_buildah build $WITH_POLICY_JSON -t ${target}-complex --build-arg foo="/usr/local/bin" -f $BUDFILES/build-arg/Dockerfile $BUDFILES/build-arg
+  expect_output --substring "RUN echo /usr/local/bin"
+
+  # Test with multiple build arguments
+  contextdir=${TEST_SCRATCH_DIR}/build-arg-expansion
+  mkdir -p $contextdir
+
+  cat > $contextdir/Containerfile << _EOF
+FROM alpine
+ARG NEWROOT
+ARG PREFIX
+RUN mkdir \$NEWROOT
+RUN echo \$PREFIX/bin
+_EOF
+
+  run_buildah build $WITH_POLICY_JSON -t ${target}-multi --build-arg NEWROOT=/new-root-fs --build-arg PREFIX=/usr $contextdir
+  expect_output --substring "RUN mkdir /new-root-fs"
+  expect_output --substring "RUN echo /usr/bin"
+
+  # Test that unexpanded variables show as empty when no build-arg is provided
+  cat > $contextdir/Containerfile2 << _EOF
+FROM alpine
+ARG UNDEFINEDVAR
+RUN echo \$UNDEFINEDVAR hello
+_EOF
+
+  run_buildah build $WITH_POLICY_JSON -t ${target}-undefined -f $contextdir/Containerfile2 $contextdir
+  expect_output --substring "RUN echo  hello"
+}