diff --git a/changelogs/fragments/53152-create-groups-using-composed-variables.yaml b/changelogs/fragments/53152-create-groups-using-composed-variables.yaml
new file mode 100644
index 00000000000..7afb92d4a1a
--- /dev/null
+++ b/changelogs/fragments/53152-create-groups-using-composed-variables.yaml
@@ -0,0 +1,2 @@
+bugfixes:
+  - inventory plugins - Fix creating groups from composed variables by getting the latest host variables
diff --git a/lib/ansible/plugins/inventory/__init__.py b/lib/ansible/plugins/inventory/__init__.py
index 8bc9950fe4c..45a8917c93b 100644
--- a/lib/ansible/plugins/inventory/__init__.py
+++ b/lib/ansible/plugins/inventory/__init__.py
@@ -34,6 +34,7 @@ from ansible.module_utils.parsing.convert_bool import boolean
 from ansible.module_utils.six import string_types
 from ansible.template import Templar
 from ansible.utils.display import Display
+from ansible.utils.vars import combine_vars
 
 display = Display()
 
@@ -366,6 +367,7 @@ class Constructable(object):
         ''' helper to create complex groups for plugins based on jinja2 conditionals, hosts that meet the conditional are added to group'''
         # process each 'group entry'
         if groups and isinstance(groups, dict):
+            variables = combine_vars(variables, self.inventory.get_host(host).get_vars())
             self.templar.set_available_variables(variables)
             for group_name in groups:
                 conditional = "{%% if %s %%} True {%% else %%} False {%% endif %%}" % groups[group_name]
@@ -389,6 +391,7 @@ class Constructable(object):
             for keyed in keys:
                 if keyed and isinstance(keyed, dict):
 
+                    variables = combine_vars(variables, self.inventory.get_host(host).get_vars())
                     try:
                         key = self._compose(keyed.get('key'), variables)
                     except Exception as e: