diff --git a/pkg/background/generate/clone.go b/pkg/background/generate/clone.go
index fbfe04f54ff6..76235fdc975f 100644
--- a/pkg/background/generate/clone.go
+++ b/pkg/background/generate/clone.go
@@ -13,15 +13,14 @@ import (
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 )
 
-func manageClone(log logr.Logger, target, sourceSpec kyvernov1.ResourceSpec, severSideApply bool, rule kyvernov1.Rule, client dclient.Interface) generateResponse {
+func manageClone(log logr.Logger, target, sourceSpec kyvernov1.ResourceSpec, severSideApply bool, pattern kyvernov1.GeneratePatterns, client dclient.Interface) generateResponse {
 	source := sourceSpec
-	clone := rule.Generation
-	if clone.Clone.Name != "" {
+	if pattern.Clone.Name != "" {
 		source = kyvernov1.ResourceSpec{
 			APIVersion: target.GetAPIVersion(),
 			Kind:       target.GetKind(),
-			Namespace:  clone.Clone.Namespace,
-			Name:       clone.Clone.Name,
+			Namespace:  pattern.Clone.Namespace,
+			Name:       pattern.Clone.Name,
 		}
 	}
 
@@ -80,14 +79,13 @@ func manageClone(log logr.Logger, target, sourceSpec kyvernov1.ResourceSpec, sev
 	return newCreateGenerateResponse(sourceObjCopy.UnstructuredContent(), target, nil)
 }
 
-func manageCloneList(log logr.Logger, targetNamespace string, severSideApply bool, rule kyvernov1.Rule, client dclient.Interface) []generateResponse {
+func manageCloneList(log logr.Logger, targetNamespace string, severSideApply bool, pattern kyvernov1.GeneratePatterns, client dclient.Interface) []generateResponse {
 	var responses []generateResponse
-	cloneList := rule.Generation.CloneList
-	sourceNamespace := cloneList.Namespace
-	kinds := cloneList.Kinds
+	sourceNamespace := pattern.CloneList.Namespace
+	kinds := pattern.CloneList.Kinds
 	for _, kind := range kinds {
 		apiVersion, kind := kubeutils.GetKindFromGVK(kind)
-		sources, err := client.ListResource(context.TODO(), apiVersion, kind, sourceNamespace, cloneList.Selector)
+		sources, err := client.ListResource(context.TODO(), apiVersion, kind, sourceNamespace, pattern.CloneList.Selector)
 		if err != nil {
 			responses = append(responses,
 				newSkipGenerateResponse(
@@ -101,13 +99,13 @@ func manageCloneList(log logr.Logger, targetNamespace string, severSideApply boo
 		for _, source := range sources.Items {
 			target := newResourceSpec(source.GetAPIVersion(), source.GetKind(), targetNamespace, source.GetName())
 
-			if (cloneList.Kinds != nil) && (source.GetNamespace() == target.GetNamespace()) {
+			if (pattern.CloneList.Kinds != nil) && (source.GetNamespace() == target.GetNamespace()) {
 				log.V(4).Info("skip resource self-clone")
 				responses = append(responses, newSkipGenerateResponse(nil, target, nil))
 				continue
 			}
 			responses = append(responses,
-				manageClone(log, target, newResourceSpec(source.GetAPIVersion(), source.GetKind(), source.GetNamespace(), source.GetName()), severSideApply, rule, client))
+				manageClone(log, target, newResourceSpec(source.GetAPIVersion(), source.GetKind(), source.GetNamespace(), source.GetName()), severSideApply, pattern, client))
 		}
 	}
 	return responses
diff --git a/pkg/background/generate/controller.go b/pkg/background/generate/controller.go
index 132fadfe1968..6694c6ec20c7 100644
--- a/pkg/background/generate/controller.go
+++ b/pkg/background/generate/controller.go
@@ -10,6 +10,7 @@ import (
 	"time"
 
 	"github.com/go-logr/logr"
+	gojmespath "github.com/kyverno/go-jmespath"
 	kyvernov1 "github.com/kyverno/kyverno/api/kyverno/v1"
 	kyvernov2 "github.com/kyverno/kyverno/api/kyverno/v2"
 	"github.com/kyverno/kyverno/pkg/background/common"
@@ -311,16 +312,20 @@ func (c *GenerateController) ApplyGeneratePolicy(log logr.Logger, policyContext
 		}
 		logger := log.WithValues("rule", rule.Name)
 		contextLoader := c.engine.ContextLoader(policy, rule)
-		// if rule, err = variables.SubstituteAllInRule(log, policyContext.JSONContext(), rule); err != nil {
-		// 	log.Error(err, "variable substitution failed for rule", "rule", rule.Name)
-		// 	return nil, err
-		// }
+		if err := contextLoader(context.TODO(), rule.Context, policyContext.JSONContext()); err != nil {
+			if _, ok := err.(gojmespath.NotFoundError); ok {
+				logger.V(3).Info("failed to load rule level context", "reason", err.Error())
+			} else {
+				logger.Error(err, "failed to load rule level context")
+			}
+			return nil, fmt.Errorf("failed to load rule level context: %v", err)
+		}
 
 		if rule.Generation.ForEachGeneration != nil {
 			g := newForeachGenerator(c.client, logger, policyContext, policy, rule, rule.Context, rule.GetAnyAllConditions(), policyContext.NewResource(), rule.Generation.ForEachGeneration, contextLoader)
 			genResource, err = g.generateForeach()
 		} else {
-			g := newGenerator(c.client, logger, policyContext, policy, rule, rule.Context, rule.GetAnyAllConditions(), policyContext.NewResource(), contextLoader)
+			g := newGenerator(c.client, logger, policyContext, policy, rule, rule.Context, rule.GetAnyAllConditions(), policyContext.NewResource(), rule.Generation.GeneratePatterns, contextLoader)
 			genResource, err = g.generate()
 		}
 
diff --git a/pkg/background/generate/generator.go b/pkg/background/generate/generator.go
index d1c725675476..acde93fc7977 100644
--- a/pkg/background/generate/generator.go
+++ b/pkg/background/generate/generator.go
@@ -28,6 +28,7 @@ type generator struct {
 	anyAllConditions any
 	trigger          unstructured.Unstructured
 	forEach          []kyvernov1.ForEachGeneration
+	pattern          kyvernov1.GeneratePatterns
 	contextLoader    engineapi.EngineContextLoader
 }
 
@@ -39,6 +40,7 @@ func newGenerator(client dclient.Interface,
 	contextEntries []kyvernov1.ContextEntry,
 	anyAllConditions any,
 	trigger unstructured.Unstructured,
+	pattern kyvernov1.GeneratePatterns,
 	contextLoader engineapi.EngineContextLoader,
 ) *generator {
 	return &generator{
@@ -50,6 +52,7 @@ func newGenerator(client dclient.Interface,
 		contextEntries:   contextEntries,
 		anyAllConditions: anyAllConditions,
 		trigger:          trigger,
+		pattern:          pattern,
 		contextLoader:    contextLoader,
 	}
 }
@@ -65,10 +68,18 @@ func newForeachGenerator(client dclient.Interface,
 	forEach []kyvernov1.ForEachGeneration,
 	contextLoader engineapi.EngineContextLoader,
 ) *generator {
-
-	g := newGenerator(client, logger, policyContext, policy, rule, contextEntries, anyAllConditions, trigger, contextLoader)
-	g.forEach = forEach
-	return g
+	return &generator{
+		client:           client,
+		logger:           logger,
+		policyContext:    policyContext,
+		policy:           policy,
+		rule:             rule,
+		contextEntries:   contextEntries,
+		anyAllConditions: anyAllConditions,
+		trigger:          trigger,
+		forEach:          forEach,
+		contextLoader:    contextLoader,
+	}
 }
 
 func (g *generator) generate() ([]kyvernov1.ResourceSpec, error) {
@@ -95,22 +106,22 @@ func (g *generator) generate() ([]kyvernov1.ResourceSpec, error) {
 		return newGenResources, nil
 	}
 
-	rule, err := variables.SubstituteAllInRule(g.logger, g.policyContext.JSONContext(), g.rule)
+	pattern, err := variables.SubstituteAllInType(g.logger, g.policyContext.JSONContext(), &g.pattern)
 	if err != nil {
-		g.logger.Error(err, "variable substitution failed for rule", "rule", rule.Name)
+		g.logger.Error(err, "variable substitution failed for rule", "rule", g.rule.Name)
 		return nil, err
 	}
 
-	target := rule.Generation.ResourceSpec
+	target := pattern.ResourceSpec
 	logger := g.logger.WithValues("target", target.String())
 
-	if rule.Generation.Clone.Name != "" {
-		resp := manageClone(logger.WithValues("type", "clone"), target, kyvernov1.ResourceSpec{}, g.policy.GetSpec().UseServerSideApply, rule, g.client)
+	if pattern.Clone.Name != "" {
+		resp := manageClone(logger.WithValues("type", "clone"), target, kyvernov1.ResourceSpec{}, g.policy.GetSpec().UseServerSideApply, *pattern, g.client)
 		responses = append(responses, resp)
-	} else if len(rule.Generation.CloneList.Kinds) != 0 {
-		responses = manageCloneList(logger.WithValues("type", "cloneList"), target.GetNamespace(), g.policy.GetSpec().UseServerSideApply, rule, g.client)
+	} else if len(pattern.CloneList.Kinds) != 0 {
+		responses = manageCloneList(logger.WithValues("type", "cloneList"), target.GetNamespace(), g.policy.GetSpec().UseServerSideApply, *pattern, g.client)
 	} else {
-		resp := manageData(logger.WithValues("type", "data"), target, rule.Generation.RawData, rule.Generation.Synchronize, g.client)
+		resp := manageData(logger.WithValues("type", "data"), target, pattern.RawData, g.rule.Generation.Synchronize, g.client)
 		responses = append(responses, resp)
 	}
 
@@ -140,7 +151,7 @@ func (g *generator) generate() ([]kyvernov1.ResourceSpec, error) {
 		}
 
 		newResource.SetAPIVersion(targetMeta.GetAPIVersion())
-		common.ManageLabels(newResource, g.trigger, g.policy, rule.Name)
+		common.ManageLabels(newResource, g.trigger, g.policy, g.rule.Name)
 		if response.GetAction() == Create {
 			newResource.SetResourceVersion("")
 			if g.policy.GetSpec().UseServerSideApply {
@@ -169,7 +180,7 @@ func (g *generator) generate() ([]kyvernov1.ResourceSpec, error) {
 				}
 				newGenResources = append(newGenResources, targetMeta)
 			} else {
-				if !rule.Generation.Synchronize {
+				if !g.rule.Generation.Synchronize {
 					logger.V(4).Info("synchronize disabled, skip syncing changes")
 					continue
 				}
@@ -253,6 +264,7 @@ func (g *generator) generateElements(foreach kyvernov1.ForEachGeneration, elemen
 			foreach.Context,
 			foreach.AnyAllConditions,
 			g.trigger,
+			foreach.GeneratePatterns,
 			g.contextLoader).
 			generate()
 		if err != nil {