diff --git a/bake/hclparser/hclparser.go b/bake/hclparser/hclparser.go
index ec378cf9..e68c2a8c 100644
--- a/bake/hclparser/hclparser.go
+++ b/bake/hclparser/hclparser.go
@@ -49,29 +49,29 @@ type parser struct {
 	attrs map[string]*hcl.Attribute
 	funcs map[string]*functionDef
 
-	blocks      map[string]map[string][]*hcl.Block
-	blockValues map[*hcl.Block]reflect.Value
-	blockTypes  map[string]reflect.Type
+	blocks       map[string]map[string][]*hcl.Block
+	blockValues  map[*hcl.Block]reflect.Value
+	blockEvalCtx map[*hcl.Block]*hcl.EvalContext
+	blockTypes   map[string]reflect.Type
 
 	ectx *hcl.EvalContext
 
 	progress  map[string]struct{}
 	progressF map[string]struct{}
 	progressB map[*hcl.Block]map[string]struct{}
-	doneF     map[string]struct{}
 	doneB     map[*hcl.Block]map[string]struct{}
 }
 
 var errUndefined = errors.New("undefined")
 
-func (p *parser) loadDeps(exp hcl.Expression, exclude map[string]struct{}, allowMissing bool) hcl.Diagnostics {
+func (p *parser) loadDeps(ectx *hcl.EvalContext, exp hcl.Expression, exclude map[string]struct{}, allowMissing bool) hcl.Diagnostics {
 	fns, hcldiags := funcCalls(exp)
 	if hcldiags.HasErrors() {
 		return hcldiags
 	}
 
 	for _, fn := range fns {
-		if err := p.resolveFunction(fn); err != nil {
+		if err := p.resolveFunction(ectx, fn); err != nil {
 			if allowMissing && errors.Is(err, errUndefined) {
 				continue
 			}
@@ -131,7 +131,7 @@ func (p *parser) loadDeps(exp hcl.Expression, exclude map[string]struct{}, allow
 				return wrapErrorDiagnostic("Invalid expression", err, exp.Range().Ptr(), exp.Range().Ptr())
 			}
 		} else {
-			if err := p.resolveValue(v.RootName()); err != nil {
+			if err := p.resolveValue(ectx, v.RootName()); err != nil {
 				if allowMissing && errors.Is(err, errUndefined) {
 					continue
 				}
@@ -145,16 +145,16 @@ func (p *parser) loadDeps(exp hcl.Expression, exclude map[string]struct{}, allow
 
 // resolveFunction forces evaluation of a function, storing the result into the
 // parser.
-func (p *parser) resolveFunction(name string) error {
-	if _, ok := p.doneF[name]; ok {
+func (p *parser) resolveFunction(ectx *hcl.EvalContext, name string) error {
+	if _, ok := p.ectx.Functions[name]; ok {
+		return nil
+	}
+	if _, ok := ectx.Functions[name]; ok {
 		return nil
 	}
 	f, ok := p.funcs[name]
 	if !ok {
-		if _, ok := p.ectx.Functions[name]; ok {
-			return nil
-		}
-		return errors.Wrapf(errUndefined, "function %q does not exit", name)
+		return errors.Wrapf(errUndefined, "function %q does not exist", name)
 	}
 	if _, ok := p.progressF[name]; ok {
 		return errors.Errorf("function cycle not allowed for %s", name)
@@ -204,7 +204,7 @@ func (p *parser) resolveFunction(name string) error {
 		return diags
 	}
 
-	if diags := p.loadDeps(f.Result.Expr, params, false); diags.HasErrors() {
+	if diags := p.loadDeps(p.ectx, f.Result.Expr, params, false); diags.HasErrors() {
 		return diags
 	}
 
@@ -214,7 +214,6 @@ func (p *parser) resolveFunction(name string) error {
 	if diags.HasErrors() {
 		return diags
 	}
-	p.doneF[name] = struct{}{}
 	p.ectx.Functions[name] = v
 
 	return nil
@@ -222,10 +221,13 @@ func (p *parser) resolveFunction(name string) error {
 
 // resolveValue forces evaluation of a named value, storing the result into the
 // parser.
-func (p *parser) resolveValue(name string) (err error) {
+func (p *parser) resolveValue(ectx *hcl.EvalContext, name string) (err error) {
 	if _, ok := p.ectx.Variables[name]; ok {
 		return nil
 	}
+	if _, ok := ectx.Variables[name]; ok {
+		return nil
+	}
 	if _, ok := p.progress[name]; ok {
 		return errors.Errorf("variable cycle not allowed for %s", name)
 	}
@@ -242,9 +244,10 @@ func (p *parser) resolveValue(name string) (err error) {
 	if _, builtin := p.opt.Vars[name]; !ok && !builtin {
 		vr, ok := p.vars[name]
 		if !ok {
-			return errors.Wrapf(errUndefined, "variable %q does not exit", name)
+			return errors.Wrapf(errUndefined, "variable %q does not exist", name)
 		}
 		def = vr.Default
+		ectx = p.ectx
 	}
 
 	if def == nil {
@@ -257,10 +260,10 @@ func (p *parser) resolveValue(name string) (err error) {
 		return
 	}
 
-	if diags := p.loadDeps(def.Expr, nil, true); diags.HasErrors() {
+	if diags := p.loadDeps(ectx, def.Expr, nil, true); diags.HasErrors() {
 		return diags
 	}
-	vv, diags := def.Expr.Value(p.ectx)
+	vv, diags := def.Expr.Value(ectx)
 	if diags.HasErrors() {
 		return diags
 	}
@@ -364,18 +367,43 @@ func (p *parser) resolveBlock(block *hcl.Block, target *hcl.BodySchema) (err err
 		return FilterExcludeBody(block.Body, filter)
 	}
 
-	// load dependencies from all targeted properties
+	// prepare the output destination and evaluation context
 	t, ok := p.blockTypes[block.Type]
 	if !ok {
 		return nil
 	}
+	var output reflect.Value
+	var ectx *hcl.EvalContext
+	if prev, ok := p.blockValues[block]; ok {
+		output = prev
+		ectx = p.blockEvalCtx[block]
+	} else {
+		output = reflect.New(t)
+		setLabel(output, block.Labels[0]) // early attach labels, so we can reference them
+
+		type ectxI interface {
+			EvalContext(base *hcl.EvalContext, block *hcl.Block) *hcl.EvalContext
+		}
+		if v, ok := output.Interface().(ectxI); ok {
+			ectx = v.EvalContext(p.ectx, block)
+			if ectx != p.ectx && ectx.Parent() != p.ectx {
+				return errors.Errorf("EvalContext must return a context with the correct parent")
+			}
+		} else {
+			ectx = p.ectx
+		}
+	}
+	p.blockValues[block] = output
+	p.blockEvalCtx[block] = ectx
+
+	// load dependencies from all targeted properties
 	schema, _ := gohcl.ImpliedBodySchema(reflect.New(t).Interface())
 	content, _, diag := body().PartialContent(schema)
 	if diag.HasErrors() {
 		return diag
 	}
 	for _, a := range content.Attributes {
-		diag := p.loadDeps(a.Expr, nil, true)
+		diag := p.loadDeps(ectx, a.Expr, nil, true)
 		if diag.HasErrors() {
 			return diag
 		}
@@ -388,18 +416,10 @@ func (p *parser) resolveBlock(block *hcl.Block, target *hcl.BodySchema) (err err
 	}
 
 	// decode!
-	var output reflect.Value
-	if prev, ok := p.blockValues[block]; ok {
-		output = prev
-	} else {
-		output = reflect.New(t)
-		setLabel(output, block.Labels[0]) // early attach labels, so we can reference them
-	}
-	diag = gohcl.DecodeBody(body(), p.ectx, output.Interface())
+	diag = gohcl.DecodeBody(body(), ectx, output.Interface())
 	if diag.HasErrors() {
 		return diag
 	}
-	p.blockValues[block] = output
 
 	// mark all targeted properties as done
 	for _, a := range content.Attributes {
@@ -417,7 +437,7 @@ func (p *parser) resolveBlock(block *hcl.Block, target *hcl.BodySchema) (err err
 		}
 	}
 
-	// store the result into the evaluation context (so if can be referenced)
+	// store the result into the evaluation context (so it can be referenced)
 	outputType, err := gocty.ImpliedType(output.Interface())
 	if err != nil {
 		return err
@@ -475,20 +495,20 @@ func Parse(b hcl.Body, opt Opt, val interface{}) hcl.Diagnostics {
 		attrs: map[string]*hcl.Attribute{},
 		funcs: map[string]*functionDef{},
 
-		blocks:      map[string]map[string][]*hcl.Block{},
-		blockValues: map[*hcl.Block]reflect.Value{},
-		blockTypes:  map[string]reflect.Type{},
-
-		progress:  map[string]struct{}{},
-		progressF: map[string]struct{}{},
-		progressB: map[*hcl.Block]map[string]struct{}{},
+		blocks:       map[string]map[string][]*hcl.Block{},
+		blockValues:  map[*hcl.Block]reflect.Value{},
+		blockEvalCtx: map[*hcl.Block]*hcl.EvalContext{},
+		blockTypes:   map[string]reflect.Type{},
 
-		doneF: map[string]struct{}{},
-		doneB: map[*hcl.Block]map[string]struct{}{},
 		ectx: &hcl.EvalContext{
 			Variables: map[string]cty.Value{},
-			Functions: stdlibFunctions,
+			Functions: Stdlib(),
 		},
+
+		progress:  map[string]struct{}{},
+		progressF: map[string]struct{}{},
+		progressB: map[*hcl.Block]map[string]struct{}{},
+		doneB:     map[*hcl.Block]map[string]struct{}{},
 	}
 
 	for _, v := range defs.Variables {
@@ -532,7 +552,7 @@ func Parse(b hcl.Body, opt Opt, val interface{}) hcl.Diagnostics {
 	delete(p.attrs, "function")
 
 	for k := range p.opt.Vars {
-		_ = p.resolveValue(k)
+		_ = p.resolveValue(p.ectx, k)
 	}
 
 	for _, a := range content.Attributes {
@@ -548,7 +568,7 @@ func Parse(b hcl.Body, opt Opt, val interface{}) hcl.Diagnostics {
 	}
 
 	for k := range p.vars {
-		if err := p.resolveValue(k); err != nil {
+		if err := p.resolveValue(p.ectx, k); err != nil {
 			if diags, ok := err.(hcl.Diagnostics); ok {
 				return diags
 			}
@@ -558,7 +578,7 @@ func Parse(b hcl.Body, opt Opt, val interface{}) hcl.Diagnostics {
 	}
 
 	for k := range p.funcs {
-		if err := p.resolveFunction(k); err != nil {
+		if err := p.resolveFunction(p.ectx, k); err != nil {
 			if diags, ok := err.(hcl.Diagnostics); ok {
 				return diags
 			}
@@ -678,7 +698,7 @@ func Parse(b hcl.Body, opt Opt, val interface{}) hcl.Diagnostics {
 	}
 
 	for k := range p.attrs {
-		if err := p.resolveValue(k); err != nil {
+		if err := p.resolveValue(p.ectx, k); err != nil {
 			if diags, ok := err.(hcl.Diagnostics); ok {
 				return diags
 			}
diff --git a/bake/hclparser/stdlib.go b/bake/hclparser/stdlib.go
index f78b6dce..53d1d416 100644
--- a/bake/hclparser/stdlib.go
+++ b/bake/hclparser/stdlib.go
@@ -124,3 +124,11 @@ var timestampFunc = function.New(&function.Spec{
 		return cty.StringVal(time.Now().UTC().Format(time.RFC3339)), nil
 	},
 })
+
+func Stdlib() map[string]function.Function {
+	funcs := make(map[string]function.Function, len(stdlibFunctions))
+	for k, v := range stdlibFunctions {
+		funcs[k] = v
+	}
+	return funcs
+}