diff --git a/plugins/catalog-backend-module-gitlab/src/__testUtils__/handlers.ts b/plugins/catalog-backend-module-gitlab/src/__testUtils__/handlers.ts
index 7dc7829874..9b380891ae 100644
--- a/plugins/catalog-backend-module-gitlab/src/__testUtils__/handlers.ts
+++ b/plugins/catalog-backend-module-gitlab/src/__testUtils__/handlers.ts
@@ -144,6 +144,21 @@ const httpHandlers = [
 
 // dynamic handlers
 
+const httpGroupFindByEncodedPathDynamic = all_groups_response.flatMap(group => [
+  // Handler for apiBaseUrl
+  rest.get(`${apiBaseUrl}/groups/${group.full_path}`, (_, res, ctx) => {
+    return res(
+      ctx.json(all_groups_response.find(g => g.full_path === group.full_path)),
+    );
+  }),
+  // Handler for apiSaaSBaseUrl
+  rest.get(`${apiBaseUrlSaas}/groups/${group.full_path}`, (_, res, ctx) => {
+    return res(
+      ctx.json(all_groups_response.find(g => g.full_path === group.full_path)),
+    );
+  }),
+]);
+
 const httpGroupFindByIdDynamic = all_groups_response.map(group => {
   return rest.get(`${apiBaseUrl}/groups/${group.id}`, (_, res, ctx) => {
     return res(ctx.json(all_groups_response.find(g => g.id === group.id)));
@@ -491,7 +506,7 @@ const graphqlHandlers = [
                       {
                         id: 'gid://gitlab/Group/1',
                         name: 'group1',
-                        description: 'description1',
+                        description: '',
                         fullPath: 'path/group1',
                         parent: {
                           id: '123',
@@ -626,4 +641,5 @@ export const handlers = [
   ...httpGroupListDescendantProjectsById,
   ...httpGroupListDescendantProjectsByName,
   ...graphqlHandlers,
+  ...httpGroupFindByEncodedPathDynamic,
 ];
diff --git a/plugins/catalog-backend-module-gitlab/src/lib/client.ts b/plugins/catalog-backend-module-gitlab/src/lib/client.ts
index 58dae9ed31..1e1d8247cd 100644
--- a/plugins/catalog-backend-module-gitlab/src/lib/client.ts
+++ b/plugins/catalog-backend-module-gitlab/src/lib/client.ts
@@ -170,10 +170,7 @@ export class GitLabClient {
     groupPath: string,
     options?: CommonListOptions,
   ): Promise<GitLabGroup> {
-    return this.nonPagedRequest(
-      `/groups/${encodeURIComponent(groupPath)}`,
-      options,
-    );
+    return this.nonPagedRequest(`/groups/${groupPath}`, options);
   }
 
   async listDescendantGroups(
diff --git a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.test.ts b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.test.ts
index a15894b236..5f62cedb71 100644
--- a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.test.ts
+++ b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.test.ts
@@ -435,7 +435,7 @@ describe('GitlabOrgDiscoveryEntityProvider - refresh', () => {
   });
 
   // This should return all members of the self-hosted instance regardless of the group set -> expected_full_members_group_org_scan_entities
-  // All instance members, but only the group entities below the config.group
+  // All instance members, but only the group entities of config.group and below (#26554)
   it('Self-hosted: should get all instance users when restrictUsersToGroup is not set', async () => {
     const config = new ConfigReader(mock.config_org_group_selfHosted);
     const schedule = new PersistingTaskRunner();
diff --git a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
index 0293f90a2c..556f4ae5a4 100644
--- a/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
+++ b/plugins/catalog-backend-module-gitlab/src/providers/GitlabOrgDiscoveryEntityProvider.ts
@@ -396,7 +396,9 @@ export class GitlabOrgDiscoveryEntityProvider implements EntityProvider {
     else {
       groups = (await this.gitLabClient.listDescendantGroups(this.config.group))
         .items;
+
       groups.push(await this.gitLabClient.getGroupByPath(this.config.group));
+
       const rootGroupSplit = this.config.group.split('/');
       const rootGroup = this.config.restrictUsersToGroup
         ? rootGroupSplit[rootGroupSplit.length - 1]