diff --git a/README.md b/README.md
index 1793a96..2b192ff 100644
--- a/README.md
+++ b/README.md
@@ -18,6 +18,7 @@ $aggregator = new ConfigAggregator(
             'parameter_usage' => '%foo%',
             'parameter_name' => '%%foo%%',
             'recursive_parameter_usage' => '%bar.baz%',
+            'parameterized_parameter_usage' => '%bar.quux%',
         ]),
     ],
     null,
@@ -26,6 +27,7 @@ $aggregator = new ConfigAggregator(
             'foo' => 'bar',
             'bar' => [
                 'baz' => 'qoo',
+                'quux' => '%foo%', 
             ],
         ]),
     ]
@@ -37,24 +39,30 @@ var_dump($aggregator->getMergedConfig());
 Result:
 
 ```php
-array(3) {
+array(5) {
   'parameter_usage' =>
   string(3) "bar"
   'parameter_name' =>
   string(5) "%foo%"
   'recursive_parameter_usage' =>
   string(3) "qoo"
+  'parameterized_parameter_usage' =>
+  string(3) "bar"
   'parameters' =>
-  array(3) {
-    'foo' => 
-     string(3) "bar"
+  array(4) {
+    'foo' =>
+    string(3) "bar"
     'bar' =>
-    array(1) {
+    array(2) {
       'baz' =>
       string(3) "qoo"
+      'quux' =>
+      string(3) "bar"
     }
     'bar.baz' =>
     string(3) "qoo"
+    'bar.quux' =>
+    string(3) "bar"
   }
 }
 ```
diff --git a/docs/book/usage.md b/docs/book/usage.md
index 6b9e787..070c30d 100644
--- a/docs/book/usage.md
+++ b/docs/book/usage.md
@@ -15,6 +15,8 @@ Parameters may be defined as nested associative arrays as well; in such cases, a
 `.` character references an additional layer of hierarchy to dereference:
 `%foo.bar%` refers to the paramter found at `'foo' => [ 'bar' => 'value' ]`.
 
+You can use parameters which reference other parameters as well.
+
 If you wish to use a literal `%name%` within your configuration, you **must**
 double-escape the percentage signs: `%%name%%`. Failure to do so will result in
 an exception when post-processing the configuration.
@@ -32,6 +34,7 @@ $aggregator = new ConfigAggregator(
             'parameter_usage' => '%foo%',
             'parameter_name' => '%%foo%%',
             'recursive_parameter_usage' => '%bar.baz%',
+            'parameterized_parameter_usage' => '%bar.quux%',
         ]),
     ],
     null,
@@ -40,6 +43,7 @@ $aggregator = new ConfigAggregator(
             'foo' => 'bar',
             'bar' => [
                 'baz' => 'qoo',
+                'quux' => '%foo%', 
             ],
         ]),
     ]
@@ -51,24 +55,30 @@ var_dump($aggregator->getMergedConfig());
 The result of the above will be:
 
 ```php
-array(3) {
+array(5) {
   'parameter_usage' =>
   string(3) "bar"
   'parameter_name' =>
   string(5) "%foo%"
   'recursive_parameter_usage' =>
   string(3) "qoo"
+  'parameterized_parameter_usage' =>
+  string(3) "bar"
   'parameters' =>
-  array(3) {
-    'foo' => 
-     string(3) "bar"
+  array(4) {
+    'foo' =>
+    string(3) "bar"
     'bar' =>
-    array(1) {
+    array(2) {
       'baz' =>
       string(3) "qoo"
+      'quux' =>
+      string(3) "bar"
     }
     'bar.baz' =>
     string(3) "qoo"
+    'bar.quux' =>
+    string(3) "bar"
   }
 }
 ```
diff --git a/src/ParameterPostProcessor.php b/src/ParameterPostProcessor.php
index 7b231e2..98cdb44 100644
--- a/src/ParameterPostProcessor.php
+++ b/src/ParameterPostProcessor.php
@@ -15,7 +15,7 @@
 class ParameterPostProcessor
 {
     /**
-     * @var ParameterBag
+     * @var array
      */
     private $parameters;
 
@@ -24,19 +24,15 @@ class ParameterPostProcessor
      */
     public function __construct(array $parameters)
     {
-        $this->parameters = new ParameterBag($parameters);
+        $this->parameters = $parameters;
     }
 
     public function __invoke(array $config) : array
     {
-        $parameters = $this->parameters;
-
-        // First, convert values to needed parameters
-        $convertedParameters = $this->convertValues($parameters->all());
-        $parameters->clear();
-        $parameters->add($convertedParameters);
 
         try {
+            $parameters = $this->getResolvedParameters();
+
             array_walk_recursive($config, function (&$value) use ($parameters) {
                 $value = $parameters->unescapeValue($parameters->resolveValue($value));
             });
@@ -49,7 +45,7 @@ public function __invoke(array $config) : array
         return $config;
     }
 
-    private function convertValues(array $values, string $prefix = '') : array
+    private function resolveNestedParameters(array $values, string $prefix = '') : array
     {
         $convertedValues = [];
         foreach ($values as $key => $value) {
@@ -60,10 +56,19 @@ private function convertValues(array $values, string $prefix = '') : array
 
             $convertedValues[$prefix . $key] = $value;
             if (is_array($value)) {
-                $convertedValues += $this->convertValues($value, $prefix . $key . '.');
+                $convertedValues += $this->resolveNestedParameters($value, $prefix . $key . '.');
             }
         }
 
         return $convertedValues;
     }
+
+    private function getResolvedParameters() : ParameterBag
+    {
+        $resolved = $this->resolveNestedParameters($this->parameters);
+        $bag = new ParameterBag($resolved);
+
+        $bag->resolve();
+        return $bag;
+    }
 }
diff --git a/test/ParameterPostProcessorTest.php b/test/ParameterPostProcessorTest.php
index 2e06cdd..17666f0 100644
--- a/test/ParameterPostProcessorTest.php
+++ b/test/ParameterPostProcessorTest.php
@@ -74,4 +74,45 @@ public function testCanDetectMissingParameter()
         $this->expectException(ParameterNotFoundException::class);
         $processor(['foo' => '%foo%']);
     }
+
+    public function testResolvesParameterizedParameters()
+    {
+        $processor = new ParameterPostProcessor([
+            'foo' => 'bar',
+            'bar' => 'baz',
+            'baz' => '%foo%',
+            'nested' => [
+                'foo' => '%bar%',
+                'bar' => '%nested.foo%',
+            ],
+        ]);
+
+        $processed = $processor(['foo' => '%nested.bar%']);
+
+        $this->assertArraySubset([
+            'foo' => 'baz',
+            'parameters' => [
+                'nested' => [
+                    'bar' => 'baz',
+                ],
+            ],
+        ], $processed);
+    }
+
+    public function testResolvesParameterizedParametersInReversedOrder()
+    {
+        $processor = new ParameterPostProcessor([
+            'foo' => '%bar%',
+            'bar' => '%baz%',
+            'baz' => 'qux',
+        ]);
+
+        $processed = $processor([]);
+
+        $this->assertArraySubset([
+            'parameters' => [
+                'foo' => 'qux',
+            ],
+        ], $processed);
+    }
 }