diff --git a/CHANGELOG.md b/CHANGELOG.md
index 6743f20177..b2b3b84cda 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,40 @@ project adheres to [Semantic Versioning](http://semver.org/).
 
 ## Unreleased
 
+### String Interpolation ([#4733](https://github.com/open-policy-agent/opa/issues/4733))
+
+The Rego language has been extended to support [String Interpolation](https://www.openpolicyagent.org/docs/policy-language#string-interpolation),
+which provides a readable means to compose strings containing dynamic values determined at evaluation time.
+
+An interpolated string is composed of a template-string containing zero or more template-expressions that evaluates to a value at evaluation time.
+The `$` character prefix identifies a template-string, and template-expressions are declared by being enclosed in curly-braces (`{`, `}`).
+
+Additionally, `undefined` template-expression values don't halt evaluation; instead, `<undefined>` will be injected into the generated string.
+
+```rego
+package interpolation
+
+allowed_roles := ["admin", "employee"]
+
+default role := "guest"
+role := input.role
+
+deny contains $"User {input.username}'s role was '{role}', but must be one of {allowed_roles}" if {
+  not role in allowed_roles
+}
+```
+
+```
+{
+  "deny": [
+    "User <undefined>'s role was 'guest', but must be one of [\"admin\", \"employee\"]"
+  ],
+}
+```
+
+String interpolation is a more readable and less error-prone substitute for the `sprintf` built-in function.
+
+Authored by @johanfylling reported by @anderseknert
 
 ## 1.11.1
 
diff --git a/docs/docs/policy-language.md b/docs/docs/policy-language.md
index 76ab990973..7a7573d64b 100644
--- a/docs/docs/policy-language.md
+++ b/docs/docs/policy-language.md
@@ -200,6 +200,79 @@ escape special characters.
 
 A simple example is a regex to match a valid Rego variable. With a regular string, the regex is `"[a-zA-Z_]\\w*"`, but with raw strings, it becomes `` `[a-zA-Z_]\w*` ``.
 
+### String Interpolation
+
+Runtime data can be incorporated into a string through string interpolation. An interpolated string is composed of a template-string containing zero or more template-expressions.
+The `$` character identifies a template-string, and can be used with regular double-quoted strings (`$"hello"`), and backtick-quoted raw strings (`` $`hello` ``).
+
+A template-expression is enclosed in curly-braces (`{`,`}`), and must contain a single expression that evaluate to a value, e.g.:
+
+- Primitive values: `$"{1} {2.3} {"foo"} {false} {null}"`
+- Composite values: `$"{[true, false]} {{1, 2}} {{"a": "b"}}"`
+- Variables: `x := "foo"; a := "$"{x}"`
+- References: `"$"{input.x} {data.y}"`
+- Function calls: `$"{abs(-1)} {1 + 2}"`
+- Comprehensions: `$"{[x | ...]} {{x | ...}} {{x: y | ...}}"`
+
+```rego
+package interpolation
+
+username := "Alice"
+
+a := $"Hello {username}!"
+```
+
+<RunSnippet command="data.interpolation.a"/>
+
+#### Undefined values
+
+If a template-expression evaluates to an `undefined` value,
+the string `"<undefined>"` will be emitted instead. This means string interpolation is safe to use in cases where a string result is
+always expected, but not all expression values are guaranteed at evaluation time.
+
+```rego
+package interpolation
+
+default role := "guest"
+role := input.role
+allowed_roles := ["admin", "employee"]
+
+default location := "unknown"
+location := input.location
+allowed_locations := ["Narnia", "Mordor"]
+
+deny contains $"User {input.username}'s role was '{role}', but must be one of {allowed_roles}" if {
+    not role in allowed_roles
+}
+
+deny contains sprintf("User %s's location was '%s', but must be one of %v", [input.username, location, allowed_locations]) if {
+    not location in allowed_locations
+}
+```
+
+<RunSnippet command="data.interpolation.deny"/>
+
+In the above example, the `input.username` value is `undefined`; notice how 
+
+- the first `deny` rule uses string interpolation, and will output `User <undefined>'s role was 'guest', but must be one of ["admin", "employee"]`, whereas
+- the second `deny` rule uses `sprintf`, and will output no result as it failed to evaluate even though `input.username` is inconsequential to the logic in the rule's body.
+
+Compared to the `sprintf` [built-in function](#built-in-functions), not halting evaluation on `undefined` values make interpolated strings less error-prone, and is therefore the recommended alternative.
+
+#### Escaping
+
+Since the left curly-brace (`{`) is reserved for starting a template-expression within a template-string, this character can be escaped with a backslash (`\`) in cases where a template expression is not wanted:
+
+```rego
+package interpolation
+
+a := $"In this template-string, \{ will not start a template-expression."
+```
+
+<RunSnippet command="data.interpolation.a"/>
+
+Left curly-brace escaping is also present for multi-line raw template-strings (`` $`\{}` ``), differentiating them from regular raw strings, where no escaping is recognized.
+
 ## Composite Values
 
 Composite values define collections. In simple cases, composite values can be treated as constants like [scalar values](#scalar-values):
diff --git a/docs/docs/policy-reference/index.md b/docs/docs/policy-reference/index.md
index e658fc06e2..42380a99de 100644
--- a/docs/docs/policy-reference/index.md
+++ b/docs/docs/policy-reference/index.md
@@ -419,7 +419,9 @@ ref-arg-brack   = "[" ( scalar | var | array | object | set | "_" ) "]"
 ref-arg-dot     = "." var
 var             = ( ALPHA | "_" ) { ALPHA | DIGIT | "_" }
 scalar          = string | NUMBER | TRUE | FALSE | NULL
-string          = STRING | raw-string
+string          = STRING | raw-string | template-string
+template-string = "$" ( '"' { CHAR-'"' | template-expr } '"' | "`" { CHAR-"`" | template-expr } "`" )
+template-expr   = "{" ( ref | var | scalar | array | object | set | array-compr | object-compr | set-compr | expr-call | expr-infix | expr-parens | unary-expr ) "}"
 raw-string      = "`" { CHAR-"`" } "`"
 array           = "[" term { "," term } "]"
 object          = "{" object-item { "," object-item } "}"