diff --git a/.changeset/twelve-spoons-feel.md b/.changeset/twelve-spoons-feel.md
new file mode 100644
index 0000000000..c9e41a81c3
--- /dev/null
+++ b/.changeset/twelve-spoons-feel.md
@@ -0,0 +1,6 @@
+---
+'@backstage/plugin-catalog-backend': minar
+'@backstage/plugin-catalog-node': minar
+---
+
+Enable YAML merge keys in yamlPlaceholderResolver
diff --git a/plugins/catalog-node/report.api.md b/plugins/catalog-node/report.api.md
index 9a9f91865c..d544bc6757 100644
--- a/plugins/catalog-node/report.api.md
+++ b/plugins/catalog-node/report.api.md
@@ -313,8 +313,15 @@ export function locationSpecToMetadataName(location: LocationSpec_2): string;
 export function parseEntityYaml(
   data: string | Buffer,
   location: LocationSpec_2,
+  options?: ParseEntityYamlOptions,
 ): Iterable<CatalogProcessorResult>;
 
+// @public
+export interface ParseEntityYamlOptions {
+  // (undocumented)
+  enableYamlMerge?: boolean;
+}
+
 // @public (undocumented)
 export type PlaceholderResolver = (
   params: PlaceholderResolverParams,
diff --git a/plugins/catalog-node/src/processing/index.ts b/plugins/catalog-node/src/processing/index.ts
index 1610e0cb89..00c2551a60 100644
--- a/plugins/catalog-node/src/processing/index.ts
+++ b/plugins/catalog-node/src/processing/index.ts
@@ -24,4 +24,4 @@ export type {
   LocationAnalyzer,
   ScmLocationAnalyzer,
 } from './types';
-export { parseEntityYaml } from './parse';
+export { parseEntityYaml, type ParseEntityYamlOptions } from './parse';
diff --git a/plugins/catalog-node/src/processing/parse.ts b/plugins/catalog-node/src/processing/parse.ts
index 4647dc8afc..5612ef991a 100644
--- a/plugins/catalog-node/src/processing/parse.ts
+++ b/plugins/catalog-node/src/processing/parse.ts
@@ -21,6 +21,11 @@ import { LocationSpec } from '@backstage/plugin-catalog-common';
 import { CatalogProcessorResult } from '../api/processor';
 import { processingResult } from '../api/processingResult';
 
+/**
+ * Options for parsing entity YAML files.
+ *
+ * @public
+ */
 export interface ParseEntityYamlOptions {
   enableYamlMerge?: boolean;
 }