diff --git a/src/java/org/apache/commons/lang/text/VariableFormatter.java b/src/java/org/apache/commons/lang/text/VariableFormatter.java
index a069fad92..3bb0e9dbf 100644
--- a/src/java/org/apache/commons/lang/text/VariableFormatter.java
+++ b/src/java/org/apache/commons/lang/text/VariableFormatter.java
@@ -390,16 +390,16 @@ private Object doReplace(Object obj, List priorVariables) {
                     objResult = doReplace(objResult, priorVariables);
                     result.append(objResult);
                     objLen = objResult.toString().length();
-
-                    // pop the interpolated variable off the stack
-                    // this maintains priorVariables correctness for
-                    // properties with multiple interpolations, e.g.
-                    // prop.name=${some.other.prop1}/blahblah/${some.other.prop2}
-                    priorVariables.remove(priorVariables.size() - 1);
                 } else {
                     // variable not defined - so put it back in the value
                     result.append(getVariablePrefix()).append(variable).append(getVariableSuffix());
                 }
+
+                // pop the interpolated variable off the stack
+                // this maintains priorVariables correctness for
+                // properties with multiple interpolations, e.g.
+                // prop.name=${some.other.prop1}/blahblah/${some.other.prop2}
+                priorVariables.remove(priorVariables.size() - 1);
             }
 
             prec = end;
diff --git a/src/test/org/apache/commons/lang/text/VariableFormatterTest.java b/src/test/org/apache/commons/lang/text/VariableFormatterTest.java
index c101ebe18..268955009 100644
--- a/src/test/org/apache/commons/lang/text/VariableFormatterTest.java
+++ b/src/test/org/apache/commons/lang/text/VariableFormatterTest.java
@@ -226,6 +226,13 @@ public void testReplace() {
         assertEquals("Variable ${var} is unknown!", this.getFormat().replace("Variable ${var} is unknown!"));
     }
 
+    /**
+     * Tests a replace template with missing empty marker strings.
+     */
+    public void testReplaceEmptyKeys() {
+        testReplaceNoElement(REPLACE_TEMPLATE_EMPTY_KEYS);
+    }
+
     void testReplaceNoElement(String badReplaceTemplate) {
         assertEquals(badReplaceTemplate, this.getFormat().replaceObject(badReplaceTemplate));
         Map map = this.getValueMap();
@@ -242,13 +249,6 @@ public void testReplaceNoEscape() {
         testReplaceNoElement(REPLACE_TEMPLATE_NO_ESCAPE);
     }
 
-    /**
-     * Tests a replace template with missing prefix strings.
-     */
-    public void testReplaceNoPrefix() {
-        testReplaceNoElement(REPLACE_TEMPLATE_NO_PREFIX);
-    }
-
     /**
      * Tests a replace template with missing marker strings.
      */
@@ -257,15 +257,10 @@ public void testReplaceNoMarkers() {
     }
 
     /**
-     * Tests a replace template with missing empty marker strings.
+     * Tests a replace template with missing prefix strings.
      */
-    public void testReplaceEmptyKeys() {
-        try {
-            testReplaceNoElement(REPLACE_TEMPLATE_EMPTY_KEYS);
-            fail("Expected IllegalStateException.");
-        } catch (IllegalStateException e) {
-            // expected for now.
-        }
+    public void testReplaceNoPrefix() {
+        testReplaceNoElement(REPLACE_TEMPLATE_NO_PREFIX);
     }
 
     /**