diff --git a/CHANGELOG.md b/CHANGELOG.md
index 112388a..771ef33 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,12 @@ All notable changes to this project will be documented in this file.
 The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.1.0/).
 This project uses [Semantic Versioning](https://semver.org).
 
+## [0.5.1] - 2026-07-30
+
+### Fixed
+
+- **AND-group variable cascading** — variables set by an earlier AND-group member's `variables:` block are now visible when evaluating later members' `if:` conditions. Previously all members were evaluated with the same base context, so a group like `[{if: "$CI_COMMIT_TAG", variables: {DEPLOY: "true"}}, {if: "$DEPLOY"}]` would never fire because `$DEPLOY` was not yet injected when the second element was tested. This matches GitLab CI's actual behaviour.
+
 ## [0.5.0] - 2026-07-30
 
 ### Added
diff --git a/README.md b/README.md
index 7281a5b..50e99b8 100644
--- a/README.md
+++ b/README.md
@@ -6,7 +6,7 @@
 
 <p align="center">
   <a href="LICENSE"><img src="https://img.shields.io/badge/license-Apache%202.0-blue.svg" alt="License"></a>
-  <a href="CHANGELOG.md"><img src="https://img.shields.io/badge/release-v0.5.0-blue.svg" alt="Release"></a>
+  <a href="CHANGELOG.md"><img src="https://img.shields.io/badge/release-v0.5.1-blue.svg" alt="Release"></a>
 </p>
 
 > **Disclaimer:** This tool was built through iterative AI-assisted development with [Claude](https://claude.ai). It is experimental, incomplete, and not intended for production use. Coverage of GitLab CI keywords is best-effort and may lag behind GitLab's evolving spec. Use it at your own discretion — no correctness guarantees are made. Contributions and bug reports are welcome.
diff --git a/internal/cicontext/reachability.go b/internal/cicontext/reachability.go
index 644963a..8f48d1b 100644
--- a/internal/cicontext/reachability.go
+++ b/internal/cicontext/reachability.go
@@ -96,21 +96,31 @@ func EvalJob(job model.Job, ctx *Context) JobState {
 // All conditions in the group must match for the group to fire.
 // Returns (matched, effectiveWhen, mergedVars). When strict=true, unparseable
 // if: expressions count as no-match; when false, they count as match (permissive).
+//
+// Variables defined on an earlier member of the AND-group are cascaded to later
+// members when evaluating their if: conditions. This matches GitLab CI behaviour
+// where e.g. element 0 sets DEPLOY=true and element 1 can then test $DEPLOY.
 func evalRuleGroup(group []model.Rule, vars func(string) string, ctx *Context, strict bool) (bool, string, map[string]string) {
+	merged := make(map[string]string)
+	effectiveWhen := ""
 	for _, rule := range group {
+		// Cascade: variables accumulated from previous group members are visible
+		// to this member's if: condition, shadowing the base context.
+		cascadeVars := func(key string) string {
+			if v, ok := merged[key]; ok {
+				return v
+			}
+			return vars(key)
+		}
 		var ifOk bool
 		if strict {
-			ifOk = ruleIfMatchesStrict(rule.If, vars)
+			ifOk = ruleIfMatchesStrict(rule.If, cascadeVars)
 		} else {
-			ifOk = ruleIfMatches(rule.If, vars)
+			ifOk = ruleIfMatches(rule.If, cascadeVars)
 		}
 		if !ifOk || !changesMatch(rule.Changes, ctx) {
 			return false, "", nil
 		}
-	}
-	merged := make(map[string]string)
-	effectiveWhen := ""
-	for _, rule := range group {
 		for k, v := range ExtractStringVars(rule.Variables) {
 			merged[k] = v
 		}
diff --git a/testdata/nested_rules.yml b/testdata/nested_rules.yml
index e091784..38ac2ad 100644
--- a/testdata/nested_rules.yml
+++ b/testdata/nested_rules.yml
@@ -17,6 +17,16 @@ workflow:
       variables:
         PIPELINE_NAME: "deploy"
 
+  # AND-group where element 0 sets PHASE=build; element 1 checks $PHASE (cascade).
+  # Without cascading, element 1 would never match because PHASE is not in
+  # pipeline variables. With cascading, element 1 sees PHASE from element 0.
+  - - if: "$CI_COMMIT_BRANCH"
+      variables:
+        PHASE: build
+    - if: "$PHASE"
+      variables:
+        PIPELINE_NAME: "branch-build"
+
 variables:
   DEPLOY: "false"