diff --git a/README.md b/README.md
index 5b3b18867..daa64d8a7 100644
--- a/README.md
+++ b/README.md
@@ -149,6 +149,7 @@ expect - see [Known Issues](#known-issues).
       - [Flag `FF_KANIKO_SECUREJOIN_EXTRACTION`](#flag-ff_kaniko_securejoin_extraction)
       - [Flag `FF_KANIKO_RESOLVE_CACHE_KEY`](#flag-ff_kaniko_resolve_cache_key)
       - [Flag `FF_KANIKO_UNTAR_SKIP_ROOT`](#flag-ff_kaniko_untar_skip_root)
+      - [Flag `FF_KANIKO_EXPAND_HEREDOC`](#flag-ff_kaniko_expand_heredoc)
     - [Assertion Overrides](#assertion-overrides)
     - [Debug Image](#debug-image)
   - [Security](#security)
@@ -1305,6 +1306,13 @@ Set this flag to `true` to skip the root `.` entry when untarring.
 Defaults to `false`.
 Becomes default in `v1.29.0`.
 
+#### Flag `FF_KANIKO_EXPAND_HEREDOC`
+
+Docker applies Dockerfile word-expansion to a `COPY` or `ADD` heredoc body when the delimiter is unquoted, so `${VAR}` expands and `\${VAR}` keeps the literal text. A quoted delimiter (`<<'EOF'`) leaves the body verbatim. kaniko writes the body verbatim in every case, so the expanded files diverge from Docker.
+Set this flag to `true` to expand build args and env in unquoted `COPY` and `ADD` heredoc bodies.
+Defaults to `false`.
+Becomes default in `v1.29.0`.
+
 ### Assertion Overrides
 
 Kaniko checks internal invariants at runtime. If one is violated the build stops with a message like:
diff --git a/integration/dockerfiles/Dockerfile_test_issue_mz817 b/integration/dockerfiles/Dockerfile_test_issue_mz817
new file mode 100644
index 000000000..0360601be
--- /dev/null
+++ b/integration/dockerfiles/Dockerfile_test_issue_mz817
@@ -0,0 +1,19 @@
+# mz817: on v1.27.6 COPY heredoc does not expand build variables.
+# Docker applies Dockerfile word-expansion to a COPY heredoc body when the
+# delimiter is unquoted: ${VAR} expands and \${VAR} keeps the literal text with
+# the backslash stripped. A quoted delimiter (<<'EOF') leaves the body verbatim.
+# kaniko writes the body verbatim in every case, so the expanded files diverge.
+FROM scratch
+
+ENV DO_EXPAND=expanded
+
+# unquoted delimiter expands ${DO_EXPAND}, keeps \${DO_EXPAND} literal
+COPY <<EOF /tmp/expand.txt
+value=${DO_EXPAND}
+escaped=\${DO_EXPAND}
+EOF
+
+# quoted delimiter leaves the body untouched
+COPY <<'EOF' /tmp/literal.txt
+value=${DO_EXPAND}
+EOF
diff --git a/integration/images.go b/integration/images.go
index d562468ee..e9d3d2593 100644
--- a/integration/images.go
+++ b/integration/images.go
@@ -112,6 +112,7 @@ var KanikoEnv = []string{
 	"FF_KANIKO_RESOLVE_CACHE_KEY=1",
 	"FF_KANIKO_UNTAR_SKIP_ROOT=1",
 	"FF_KANIKO_REPRODUCIBLE_PRESERVE_BASE_LAYERS=1",
+	"FF_KANIKO_EXPAND_HEREDOC=1",
 	"KANIKO_PRINT_PLAN=1",
 }
 
diff --git a/pkg/commands/copy.go b/pkg/commands/copy.go
index 6f871e49f..f6dce67a4 100644
--- a/pkg/commands/copy.go
+++ b/pkg/commands/copy.go
@@ -157,7 +157,16 @@ func (c *CopyCommand) ExecuteCommand(config *v1.Config, buildArgs *dockerfile.Bu
 			return nil
 		}
 
-		srcFile := strings.NewReader(src.Data)
+		data := src.Data
+		if src.Expand && kConfig.EnvBool("FF_KANIKO_EXPAND_HEREDOC") {
+			expanded, err := util.ResolveEnvironmentReplacementRaw(src.Data, replacementEnvs)
+			if err != nil {
+				return fmt.Errorf("expanding heredoc content: %w", err)
+			}
+			data = expanded
+		}
+
+		srcFile := strings.NewReader(data)
 		err = util.CreateFile(destPath, srcFile, chmod.Apply(0o644), uint32(uid), uint32(gid))
 		if err != nil {
 			return fmt.Errorf("creating file: %w", err)
diff --git a/pkg/util/command_util.go b/pkg/util/command_util.go
index 84157ff27..54ff0ba6c 100644
--- a/pkg/util/command_util.go
+++ b/pkg/util/command_util.go
@@ -97,6 +97,16 @@ func ResolveEnvironmentReplacement(value string, envs []string, isFilepath bool)
 	return fp, nil
 }
 
+// ResolveEnvironmentReplacementRaw resolves env variables in raw content such as a
+// heredoc body. Unlike ResolveEnvironmentReplacement it leaves quotes intact
+// (SkipProcessQuotes), matching how docker expands COPY/ADD heredoc contents.
+func ResolveEnvironmentReplacementRaw(value string, envs []string) (string, error) {
+	shlex := shell.NewLex(parser.DefaultEscapeToken)
+	shlex.SkipProcessQuotes = true
+	fp, _, err := shlex.ProcessWord(value, shell.EnvsFromSlice(envs))
+	return fp, err
+}
+
 func ResolveEnvAndWildcards(sd instructions.SourcesAndDest, fileContext FileContext, envs []string) ([]string, string, error) {
 	// First, resolve any environment replacement
 	resolvedEnvs, err := ResolveEnvironmentReplacementList(sd.SourcePaths, envs, true)