diff --git a/public/app/plugins/datasource/cloud-monitoring/datasource.test.ts b/public/app/plugins/datasource/cloud-monitoring/datasource.test.ts
index aff5ccd9100..c3ab51e16e8 100644
--- a/public/app/plugins/datasource/cloud-monitoring/datasource.test.ts
+++ b/public/app/plugins/datasource/cloud-monitoring/datasource.test.ts
@@ -1,7 +1,7 @@
 import { get } from 'lodash';
 import { lastValueFrom, of } from 'rxjs';
 
-import { CustomVariableModel } from '@grafana/data';
+import { CustomVariableModel, ScopedVars } from '@grafana/data';
 import { getTemplateSrv } from '@grafana/runtime';
 
 import { createMockInstanceSetttings } from './__mocks__/cloudMonitoringInstanceSettings';
@@ -72,6 +72,33 @@ describe('Cloud Monitoring Datasource', () => {
       expect(templatedQuery[0]).toHaveProperty('datasource');
       expect(templatedQuery[0].timeSeriesList?.projectName).toEqual('project-variable');
     });
+    it('should correctly apply template variables for PromQLQuery (single-value)', () => {
+      const templateSrv = getTemplateSrv();
+      templateSrv.replace = jest.fn().mockReturnValue('filter-variable');
+      const mockInstanceSettings = createMockInstanceSetttings();
+      const ds = new Datasource(mockInstanceSettings, templateSrv);
+      const query = createMockQuery({ promQLQuery: { expr: '$testVar', projectName: 'test-project', step: '1' } });
+      const templatedQuery = ds.interpolateVariablesInQueries([query], {});
+      expect(templatedQuery[0]).toHaveProperty('datasource');
+      expect(templatedQuery[0].promQLQuery?.expr).toContain('filter-variable');
+    });
+    it('should correctly apply template variables for PromQLQuery (multi-value)', () => {
+      const templateSrv = getTemplateSrv();
+      templateSrv.replace = jest
+        .fn()
+        .mockImplementation((_target: string, _v2: ScopedVars, formatFunction: Function) => {
+          if (formatFunction) {
+            return formatFunction(['filter-variable', 'filter-variable2']);
+          }
+          return undefined;
+        });
+      const mockInstanceSettings = createMockInstanceSetttings();
+      const ds = new Datasource(mockInstanceSettings, templateSrv);
+      const query = createMockQuery({ promQLQuery: { expr: '$testVar', projectName: 'test-project', step: '1' } });
+      const templatedQuery = ds.interpolateVariablesInQueries([query], {});
+      expect(templatedQuery[0]).toHaveProperty('datasource');
+      expect(templatedQuery[0].promQLQuery?.expr).toContain('filter-variable|filter-variable2');
+    });
   });
 
   describe('migrateQuery', () => {
diff --git a/public/app/plugins/datasource/cloud-monitoring/datasource.ts b/public/app/plugins/datasource/cloud-monitoring/datasource.ts
index 11a062d40b2..09fc1b954b3 100644
--- a/public/app/plugins/datasource/cloud-monitoring/datasource.ts
+++ b/public/app/plugins/datasource/cloud-monitoring/datasource.ts
@@ -6,6 +6,7 @@ import {
   DataQueryRequest,
   DataQueryResponse,
   DataSourceInstanceSettings,
+  QueryVariableModel,
   ScopedVars,
   SelectableValue,
   TimeRange,
@@ -84,7 +85,7 @@ export default class CloudMonitoringDatasource extends DataSourceWithBackend<
         ),
       },
       sloQuery: sloQuery && this.interpolateProps(sloQuery, scopedVars),
-      promQLQuery: promQLQuery && this.interpolateProps(promQLQuery, scopedVars),
+      promQLQuery: promQLQuery && this.interpolateProps(promQLQuery, scopedVars, { expr: this.interpolatePromQLQuery }),
     };
   }
 
@@ -294,11 +295,31 @@ export default class CloudMonitoringDatasource extends DataSourceWithBackend<
     return query;
   }
 
-  interpolateProps<T extends Record<string, any>>(object: T, scopedVars: ScopedVars = {}): T {
+  interpolatePromQLQuery(value: string | string[], _variable: QueryVariableModel) {
+    if (isArray(value)) {
+      return value.join('|');
+    }
+    return value;
+  }
+
+  interpolateProps<T extends Record<string, any>>(
+    object: T,
+    scopedVars: ScopedVars = {},
+    formattingFunctions?: { [key: string]: Function | undefined }
+  ): T {
     return Object.entries(object).reduce((acc, [key, value]) => {
+      let interpolatedValue = value;
+      if (value && isString(value)) {
+        // Pass a function to the template service for formatting
+        interpolatedValue = this.templateSrv.replace(
+          value,
+          scopedVars,
+          formattingFunctions && formattingFunctions[key]
+        );
+      }
       return {
         ...acc,
-        [key]: value && isString(value) ? this.templateSrv.replace(value, scopedVars) : value,
+        [key]: interpolatedValue,
       };
     }, {} as T);
   }