diff --git a/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h b/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h
index 9aa31af97a..ef14555061 100644
--- a/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h
+++ b/Gems/Atom/RPI/Code/Include/Atom/RPI.Edit/Material/MaterialTypeSourceData.h
@@ -285,7 +285,8 @@ namespace AZ
             //! Return false to terminate the traversal.
             using EnumeratePropertyGroupsCallback = AZStd::function<bool(
                 const PropertyGroup*, // the next property group in the tree
-                const MaterialNameContext& // The PropertyGroup's name context, used to scope properties and shader connections (i.e. "levelA.levelB.")
+                const MaterialNameContext&, // The name context defined by the PropertyGroup, used to scope the contents of the property group
+                const MaterialNameContext&  // The name context that the PropertyGroup is in, used to scope the property group name
                 )>;
 
             //! Recursively traverses all of the property groups contained in the material type, executing a callback function for each.
@@ -296,7 +297,7 @@ namespace AZ
             //! Return false to terminate the traversal.
             using EnumeratePropertiesCallback = AZStd::function<bool(
                 const PropertyDefinition*, // the property definition object 
-                const MaterialNameContext& // The property's name context, used to scope properties and shader connections (i.e. "levelA.levelB.")
+                const MaterialNameContext& // The name context that the property is in, used to scope properties and shader connections (i.e. "levelA.levelB.")
                 )>;
             
             //! Recursively traverses all of the properties contained in the material type, executing a callback function for each.
@@ -318,8 +319,8 @@ namespace AZ
             PropertyDefinition* FindProperty(AZStd::span<AZStd::string_view> parsedPropertyId, AZStd::span<AZStd::unique_ptr<PropertyGroup>> inPropertyGroupList);
             
             // Function overloads for recursion, returns false to indicate that recursion should end.
-            bool EnumeratePropertyGroups(const EnumeratePropertyGroupsCallback& callback, MaterialNameContext materialNameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const;
-            bool EnumerateProperties(const EnumeratePropertiesCallback& callback, MaterialNameContext materialNameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const;
+            bool EnumeratePropertyGroups(const EnumeratePropertyGroupsCallback& callback, MaterialNameContext nameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const;
+            bool EnumerateProperties(const EnumeratePropertiesCallback& callback, MaterialNameContext nameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const;
             
             static MaterialNameContext ExtendNameContext(MaterialNameContext nameContext, const MaterialTypeSourceData::PropertyGroup& propertyGroup);
 
diff --git a/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp b/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp
index 725041eab4..874039d605 100644
--- a/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp
+++ b/Gems/Atom/RPI/Code/Source/RPI.Edit/Material/MaterialTypeSourceData.cpp
@@ -377,18 +377,18 @@ namespace AZ
             return parts;
         }
 
-        bool MaterialTypeSourceData::EnumeratePropertyGroups(const EnumeratePropertyGroupsCallback& callback, MaterialNameContext materialNameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const
+        bool MaterialTypeSourceData::EnumeratePropertyGroups(const EnumeratePropertyGroupsCallback& callback, MaterialNameContext nameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const
         {
             for (auto& propertyGroup : inPropertyGroupList)
             {
-                MaterialNameContext materialNameContext2 = ExtendNameContext(materialNameContext, *propertyGroup);
+                MaterialNameContext groupNameContext = ExtendNameContext(nameContext, *propertyGroup);
 
-                if (!callback(propertyGroup.get(), materialNameContext2))
+                if (!callback(propertyGroup.get(), groupNameContext, nameContext))
                 {
-                    return false; // Stop processing
+                    return false;  // Stop processing
                 }
                 
-                if (!EnumeratePropertyGroups(callback, materialNameContext2, propertyGroup->m_propertyGroups))
+                if (!EnumeratePropertyGroups(callback, groupNameContext, propertyGroup->m_propertyGroups))
                 {
                     return false; // Stop processing
                 }
@@ -407,21 +407,21 @@ namespace AZ
             return EnumeratePropertyGroups(callback, {}, m_propertyLayout.m_propertyGroups);
         }
 
-        bool MaterialTypeSourceData::EnumerateProperties(const EnumeratePropertiesCallback& callback, MaterialNameContext materialNameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const
+        bool MaterialTypeSourceData::EnumerateProperties(const EnumeratePropertiesCallback& callback, MaterialNameContext nameContext, const AZStd::vector<AZStd::unique_ptr<PropertyGroup>>& inPropertyGroupList) const
         {
             for (auto& propertyGroup : inPropertyGroupList)
             {
-                MaterialNameContext materialNameContext2 = ExtendNameContext(materialNameContext, *propertyGroup);
+                MaterialNameContext groupNameContext = ExtendNameContext(nameContext, *propertyGroup);
 
                 for (auto& property : propertyGroup->m_properties)
                 {
-                    if (!callback(property.get(), materialNameContext2))
+                    if (!callback(property.get(), groupNameContext))
                     {
                         return false; // Stop processing
                     }
                 }
 
-                if (!EnumerateProperties(callback, materialNameContext2, propertyGroup->m_propertyGroups))
+                if (!EnumerateProperties(callback, groupNameContext, propertyGroup->m_propertyGroups))
                 {
                     return false; // Stop processing
                 }
diff --git a/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp b/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp
index 04b55b3aaf..46cbb1ac46 100644
--- a/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp
+++ b/Gems/Atom/RPI/Code/Tests/Material/MaterialTypeSourceDataTests.cpp
@@ -487,24 +487,30 @@ namespace UnitTest
         struct EnumeratePropertyGroupsResult
         {
             const MaterialTypeSourceData::PropertyGroup* m_propertyGroup;
-            MaterialNameContext m_materialNameContext;
+            MaterialNameContext m_groupNameContext;
+            MaterialNameContext m_parentNameContext;
 
             void Check(AZStd::string expectedIdContext, const MaterialTypeSourceData::PropertyGroup* expectedPropertyGroup)
             {
                 Name groupFullId{m_propertyGroup->GetName()};
-                m_materialNameContext.ContextualizeProperty(groupFullId);
+                m_parentNameContext.ContextualizeProperty(groupFullId);
 
                 AZStd::string expectedPropertyId = expectedIdContext + expectedPropertyGroup->GetName();
 
                 EXPECT_EQ(expectedPropertyId, groupFullId.GetStringView());
                 EXPECT_EQ(expectedPropertyGroup, m_propertyGroup);
+
+                Name imaginaryPropertyName{"someChildProperty"};
+                m_groupNameContext.ContextualizeProperty(imaginaryPropertyName);
+                EXPECT_EQ(AZStd::string(groupFullId.GetStringView()) + ".someChildProperty", imaginaryPropertyName.GetStringView());
             }
         };
         AZStd::vector<EnumeratePropertyGroupsResult> enumeratePropertyGroupsResults;
 
-        sourceData.EnumeratePropertyGroups([&enumeratePropertyGroupsResults](const MaterialTypeSourceData::PropertyGroup* propertyGroup, const MaterialNameContext& nameContext)
+        sourceData.EnumeratePropertyGroups([&enumeratePropertyGroupsResults](
+            const MaterialTypeSourceData::PropertyGroup* propertyGroup, const MaterialNameContext& groupNameContext, const MaterialNameContext& parentNameContext)
             {
-                enumeratePropertyGroupsResults.push_back(EnumeratePropertyGroupsResult{propertyGroup, nameContext});
+                enumeratePropertyGroupsResults.push_back(EnumeratePropertyGroupsResult{propertyGroup, groupNameContext, parentNameContext});
                 return true;
             });
 
diff --git a/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp b/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp
index 9349ad4dc9..e4a99b73ed 100644
--- a/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp
+++ b/Gems/Atom/Tools/MaterialEditor/Code/Source/Document/MaterialDocument.cpp
@@ -783,7 +783,8 @@ namespace MaterialEditor
         // Populate the property map from a combination of source data and assets
         // Assets must still be used for now because they contain the final accumulated value after all other materials
         // in the hierarchy are applied
-        m_materialTypeSourceData.EnumeratePropertyGroups([this, &parentPropertyValues](const MaterialTypeSourceData::PropertyGroup* propertyGroup, const MaterialNameContext& nameContext)
+        m_materialTypeSourceData.EnumeratePropertyGroups([this, &parentPropertyValues](
+            const MaterialTypeSourceData::PropertyGroup* propertyGroup, const MaterialNameContext& groupNameContext, const MaterialNameContext& /*parentNameContext*/)
             {
                 AtomToolsFramework::DynamicPropertyConfig propertyConfig;
 
@@ -791,7 +792,7 @@ namespace MaterialEditor
                 {
                     // Assign id before conversion so it can be used in dynamic description
                     propertyConfig.m_id = propertyDefinition->GetName();
-                    nameContext.ContextualizeProperty(propertyConfig.m_id);
+                    groupNameContext.ContextualizeProperty(propertyConfig.m_id);
 
                     const auto& propertyIndex = m_materialAsset->GetMaterialPropertiesLayout()->FindPropertyIndex(propertyConfig.m_id);
                     const bool propertyIndexInBounds = propertyIndex.IsValid() && propertyIndex.GetIndex() < m_materialAsset->GetPropertyValues().size();
@@ -905,10 +906,10 @@ namespace MaterialEditor
         
         // Add any material functors that are located inside each property group.
         bool enumerateResult = m_materialTypeSourceData.EnumeratePropertyGroups(
-            [this](const MaterialTypeSourceData::PropertyGroup* propertyGroup, const MaterialNameContext& nameContext)
+            [this](const MaterialTypeSourceData::PropertyGroup* propertyGroup, const MaterialNameContext& groupNameContext, const MaterialNameContext& /*parentNameContext*/)
             {
                 const MaterialFunctorSourceData::EditorContext editorContext = MaterialFunctorSourceData::EditorContext(
-                    m_materialSourceData.m_materialType, m_materialAsset->GetMaterialPropertiesLayout(), &nameContext);
+                    m_materialSourceData.m_materialType, m_materialAsset->GetMaterialPropertiesLayout(), &groupNameContext);
 
                 for (Ptr<MaterialFunctorSourceDataHolder> functorData : propertyGroup->GetFunctors())
                 {