diff --git a/.changeset/blue-dragons-shout.md b/.changeset/blue-dragons-shout.md
new file mode 100644
index 0000000000..c74d469bad
--- /dev/null
+++ b/.changeset/blue-dragons-shout.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-catalog-backend-module-gitlab': patch
+---
+
+restrictUsersToGroup should use the entire groupPath
diff --git a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
index 277a5a8c51..bbd926ab93 100644
--- a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
+++ b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
@@ -396,13 +396,13 @@ export class GitlabOrgDiscoveryEntityProvider implements EntityProvider {
       groups = (await this.gitLabClient.listDescendantGroups(this.config.group))
         .items;
       const rootGroupSplit = this.config.group.split('/');
-      const rootGroup = this.config.restrictUsersToGroup
-        ? rootGroupSplit[rootGroupSplit.length - 1]
+      const groupPath = this.config.restrictUsersToGroup
+        ? this.config.group
         : rootGroupSplit[0];
       users = paginated<GitLabUser>(
         options =>
           this.gitLabClient.listSaaSUsers(
-            rootGroup,
+            groupPath,
             options,
             this.config.includeUsersWithoutSeat,
           ),