diff --git a/HISTORY.rst b/HISTORY.rst
index 3b4ee12eb7..714af4b22e 100644
--- a/HISTORY.rst
+++ b/HISTORY.rst
@@ -26,6 +26,7 @@ test-driven methodologies, and modern toolchains for unrivaled success.
 * Preserved custom formatting, comments, and settings in ``.vscode/extensions.json`` during project IDE initialization instead of unconditionally overwriting the file (`issue #5473 <https://github.com/platformio/platformio-core/issues/5473>`_)
 * Fixed path parsing in `pio ci <https://docs.platformio.org/en/latest/core/userguide/cmd_ci.html>`__ on Windows by using OS-native path separators for the ``PLATFORMIO_CI_SRC`` environment variable (`pull #5514 <https://github.com/platformio/platformio-core/pull/5514>`_)
 * Fixed an issue where undefine flags with spaces (e.g., ``-U MACRO``) in ``build_flags`` were parsed incorrectly, passing only a bare ``-U`` to the compiler (`issue #5237 <https://github.com/platformio/platformio-core/issues/5237>`_)
+* Fixed an issue where a legacy ``$PROJECT_HASH`` variable at the start of an option value was not expanded when the value also ended with a ``$`` character (`issue #5520 <https://github.com/platformio/platformio-core/issues/5520>`_)
 
 6.2.0 (2026-09-05)
 ~~~~~~~~~~~~~~~~~~
diff --git a/platformio/project/config.py b/platformio/project/config.py
index 82b76abf09..176180dd5d 100644
--- a/platformio/project/config.py
+++ b/platformio/project/config.py
@@ -323,7 +323,7 @@ def _expand_interpolations(self, section, option, value):
             stop = True
             for name in legacy_vars:
                 x = value.find(f"${name}")
-                if x < 0 or value[x - 1] == "$":
+                if x < 0 or (x > 0 and value[x - 1] == "$"):
                     continue
                 value = "%s${%s}%s" % (value[:x], name, value[x + len(name) + 1 :])
                 stop = False
diff --git a/tests/project/test_config.py b/tests/project/test_config.py
index d21fd22e5b..bd01b81f07 100644
--- a/tests/project/test_config.py
+++ b/tests/project/test_config.py
@@ -672,6 +672,23 @@ def test_nested_interpolation(tmp_path: Path):
     assert testing_command[5] == '${UPLOAD_PORT and "-p "+UPLOAD_PORT}'
 
 
+def test_legacy_variable_at_value_start(tmp_path: Path):
+    # A legacy (brace-less) $PROJECT_HASH at the start of a value must be expanded
+    # even when the value ends with "$". The escaped-variable guard used to read the
+    # last character (value[-1]) for a match at index 0 and wrongly skip expansion.
+    project_conf = tmp_path / "platformio.ini"
+    project_conf.write_text("""
+[env:myenv]
+build_flags = $PROJECT_HASH-$
+""")
+    with fs.cd(str(tmp_path)):
+        config = ProjectConfig(str(project_conf))
+        value = config.get("env:myenv", "build_flags")[0]
+    assert "$PROJECT_HASH" not in value
+    assert value.startswith(os.path.basename(str(tmp_path)) + "-")
+    assert value.endswith("-$")
+
+
 def test_extends_order(tmp_path: Path):
     project_conf = tmp_path / "platformio.ini"
     project_conf.write_text("""