diff --git a/bundle/config/root_test.go b/bundle/config/root_test.go
index c95e6e86..d2c7a9b1 100644
--- a/bundle/config/root_test.go
+++ b/bundle/config/root_test.go
@@ -139,7 +139,7 @@ func TestRootMergeTargetOverridesWithVariables(t *testing.T) {
 		},
 		Targets: map[string]*Target{
 			"development": {
-				Variables: map[string]*variable.Variable{
+				Variables: map[string]*variable.TargetVariable{
 					"foo": {
 						Default:     "bar",
 						Description: "wrong",
diff --git a/bundle/config/target.go b/bundle/config/target.go
index a2ef4d73..fc6ba7b5 100644
--- a/bundle/config/target.go
+++ b/bundle/config/target.go
@@ -38,7 +38,26 @@ type Target struct {
 	// Override default values or lookup name for defined variables
 	// Does not permit defining new variables or redefining existing ones
 	// in the scope of an target
-	Variables map[string]*variable.Variable `json:"variables,omitempty"`
+	//
+	// There are two valid ways to define a variable override in a target:
+	// 1. Direct value override. We normalize this to the variable.Variable
+	//    struct format when loading the configuration YAML:
+	//
+	//   variables:
+	//     foo: "value"
+	//
+	// 2. Override matching the variable.Variable struct.
+	//
+	//   variables:
+	//     foo:
+	//       default: "value"
+	//
+	// OR
+	//
+	//   variables:
+	//     foo:
+	//       lookup: "resource_name"
+	Variables map[string]*variable.TargetVariable `json:"variables,omitempty"`
 
 	Git Git `json:"git,omitempty"`
 
diff --git a/bundle/config/variable/variable.go b/bundle/config/variable/variable.go
index ba94f9c8..2362ad10 100644
--- a/bundle/config/variable/variable.go
+++ b/bundle/config/variable/variable.go
@@ -16,6 +16,11 @@ const (
 	VariableTypeComplex VariableType = "complex"
 )
 
+// We alias it here to override the JSON schema associated with a variable value
+// in a target override. This is because we allow for directly specifying the value
+// in addition to the variable.Variable struct format in a target override.
+type TargetVariable Variable
+
 // An input variable for the bundle config
 type Variable struct {
 	// A type of the variable. This is used to validate the value of the variable
diff --git a/bundle/internal/schema/main.go b/bundle/internal/schema/main.go
index 3c1fb5da..4a237147 100644
--- a/bundle/internal/schema/main.go
+++ b/bundle/internal/schema/main.go
@@ -21,6 +21,22 @@ func addInterpolationPatterns(typ reflect.Type, s jsonschema.Schema) jsonschema.
 		return s
 	}
 
+	// The variables block in a target override allows for directly specifying
+	// the value of the variable.
+	if typ == reflect.TypeOf(variable.TargetVariable{}) {
+		return jsonschema.Schema{
+			AnyOf: []jsonschema.Schema{
+				// We keep the original schema so that autocomplete suggestions
+				// continue to work.
+				s,
+				// All values are valid for a variable value, be it primitive types
+				// like string/bool or complex ones like objects/arrays. Thus we override
+				// the schema to allow all valid JSON values.
+				{},
+			},
+		}
+	}
+
 	switch s.Type {
 	case jsonschema.ArrayType, jsonschema.ObjectType:
 		// arrays and objects can have complex variable values specified.
diff --git a/bundle/schema/jsonschema.json b/bundle/schema/jsonschema.json
index 4fe978b8..2db1a5ab 100644
--- a/bundle/schema/jsonschema.json
+++ b/bundle/schema/jsonschema.json
@@ -642,6 +642,29 @@
                   }
                 ]
               },
+              "variable.TargetVariable": {
+                "anyOf": [
+                  {
+                    "type": "object",
+                    "properties": {
+                      "default": {
+                        "$ref": "#/$defs/interface"
+                      },
+                      "description": {
+                        "$ref": "#/$defs/string"
+                      },
+                      "lookup": {
+                        "$ref": "#/$defs/github.com/databricks/cli/bundle/config/variable.Lookup"
+                      },
+                      "type": {
+                        "$ref": "#/$defs/github.com/databricks/cli/bundle/config/variable.VariableType"
+                      }
+                    },
+                    "additionalProperties": false
+                  },
+                  {}
+                ]
+              },
               "variable.Variable": {
                 "type": "object",
                 "properties": {
@@ -995,7 +1018,7 @@
                       "$ref": "#/$defs/github.com/databricks/cli/bundle/config.Sync"
                     },
                     "variables": {
-                      "$ref": "#/$defs/map/github.com/databricks/cli/bundle/config/variable.Variable"
+                      "$ref": "#/$defs/map/github.com/databricks/cli/bundle/config/variable.TargetVariable"
                     },
                     "workspace": {
                       "$ref": "#/$defs/github.com/databricks/cli/bundle/config.Workspace"
@@ -4993,6 +5016,20 @@
                     }
                   ]
                 },
+                "variable.TargetVariable": {
+                  "anyOf": [
+                    {
+                      "type": "object",
+                      "additionalProperties": {
+                        "$ref": "#/$defs/github.com/databricks/cli/bundle/config/variable.TargetVariable"
+                      }
+                    },
+                    {
+                      "type": "string",
+                      "pattern": "\\$\\{(var(\\.[a-zA-Z]+([-_]?[a-zA-Z0-9]+)*(\\[[0-9]+\\])*)+)\\}"
+                    }
+                  ]
+                },
                 "variable.Variable": {
                   "anyOf": [
                     {