diff --git a/env/env_yaml.cc b/env/env_yaml.cc
index 8c635e65f..1bbfe6b36 100644
--- a/env/env_yaml.cc
+++ b/env/env_yaml.cc
@@ -620,8 +620,14 @@ absl::Status ParseVariableConfigs(Config& config, absl::string_view yaml,
       }
       variable_config.description = GetString(yaml, description);
     }
-
-    CEL_ASSIGN_OR_RETURN(auto type_info, ParseTypeInfo(variable, yaml));
+    const YAML::Node type = variable["type"];
+    Config::TypeInfo type_info;
+    if (type.IsDefined() && !type.IsScalar()) {
+      // Old format, type spec is in 'type' instead of directly embedded.
+      CEL_ASSIGN_OR_RETURN(type_info, ParseTypeInfo(variable["type"], yaml));
+    } else {
+      CEL_ASSIGN_OR_RETURN(type_info, ParseTypeInfo(variable, yaml));
+    }
     ConstantKindCase constant_kind_case = GetConstantKindCase(type_info.name);
     std::string value_str;
     YAML::Node value = variable["value"];
diff --git a/env/env_yaml_test.cc b/env/env_yaml_test.cc
index f6bde59c9..a60048617 100644
--- a/env/env_yaml_test.cc
+++ b/env/env_yaml_test.cc
@@ -242,6 +242,24 @@ TEST(EnvYamlTest, ParseVariableConfigWithTypeParamsLegacySyntax) {
   EXPECT_THAT(type_info.params[1].params, IsEmpty());
 }
 
+TEST(EnvYamlTest, ParseVariableConfigWithNestedRuleOldFormat) {
+  ASSERT_OK_AND_ASSIGN(Config config, EnvConfigFromYaml(R"yaml(
+                    variables:
+                    - name: "x"
+                      type:
+                        type_name: "int"
+                  )yaml"));
+
+  ASSERT_THAT(config.GetVariableConfigs(), SizeIs(1));
+  const Config::VariableConfig& variable_config =
+      config.GetVariableConfigs()[0];
+  EXPECT_EQ(variable_config.name, "x");
+  const auto& type_info = variable_config.type_info;
+  EXPECT_EQ(type_info.name, "int");
+  EXPECT_FALSE(type_info.is_type_param);
+  EXPECT_THAT(type_info.params, IsEmpty());
+}
+
 struct ParseConstantTestCase {
   std::string type;
   std::string value;