diff --git a/public/app/features/scenes/components/Scene.tsx b/public/app/features/scenes/components/Scene.tsx
index 2848d2d2a8e..fe4731c13da 100644
--- a/public/app/features/scenes/components/Scene.tsx
+++ b/public/app/features/scenes/components/Scene.tsx
@@ -14,6 +14,7 @@ interface SceneState extends SceneObjectStatePlain {
   title: string;
   layout: SceneObject;
   actions?: SceneObject[];
+  subMenu?: SceneObject;
   isEditing?: boolean;
 }
 
@@ -33,7 +34,7 @@ export class Scene extends SceneObjectBase<SceneState> {
 }
 
 function SceneRenderer({ model }: SceneComponentProps<Scene>) {
-  const { title, layout, actions = [], isEditing, $editor } = model.useState();
+  const { title, layout, actions = [], isEditing, $editor, subMenu } = model.useState();
 
   const toolbarActions = (actions ?? []).map((action) => <action.Component key={action.state.key} model={action} />);
 
@@ -55,9 +56,12 @@ function SceneRenderer({ model }: SceneComponentProps<Scene>) {
 
   return (
     <Page navId="scenes" pageNav={{ text: title }} layout={PageLayoutType.Canvas} toolbar={pageToolbar}>
-      <div style={{ flexGrow: 1, display: 'flex', gap: '8px', overflow: 'auto' }}>
-        <layout.Component model={layout} isEditing={isEditing} />
-        {$editor && <$editor.Component model={$editor} isEditing={isEditing} />}
+      <div style={{ flexGrow: 1, display: 'flex', flexDirection: 'column', gap: '8px' }}>
+        {subMenu && <subMenu.Component model={subMenu} />}
+        <div style={{ flexGrow: 1, display: 'flex', gap: '8px', overflow: 'auto' }}>
+          <layout.Component model={layout} isEditing={isEditing} />
+          {$editor && <$editor.Component model={$editor} isEditing={isEditing} />}
+        </div>
       </div>
     </Page>
   );
diff --git a/public/app/features/scenes/components/SceneCanvasText.tsx b/public/app/features/scenes/components/SceneCanvasText.tsx
index aee61d0dc85..93b5e9a74a8 100644
--- a/public/app/features/scenes/components/SceneCanvasText.tsx
+++ b/public/app/features/scenes/components/SceneCanvasText.tsx
@@ -4,6 +4,7 @@ import { Field, Input } from '@grafana/ui';
 
 import { SceneObjectBase } from '../core/SceneObjectBase';
 import { SceneComponentProps, SceneLayoutChildState } from '../core/types';
+import { sceneTemplateInterpolator } from '../variables/sceneTemplateInterpolator';
 
 export interface SceneCanvasTextState extends SceneLayoutChildState {
   text: string;
@@ -13,8 +14,10 @@ export interface SceneCanvasTextState extends SceneLayoutChildState {
 
 export class SceneCanvasText extends SceneObjectBase<SceneCanvasTextState> {
   public static Editor = Editor;
+
   public static Component = ({ model }: SceneComponentProps<SceneCanvasText>) => {
     const { text, fontSize = 20, align = 'left' } = model.useState();
+    const textInterpolated = sceneTemplateInterpolator(text, model);
 
     const style: CSSProperties = {
       fontSize: fontSize,
@@ -25,7 +28,7 @@ export class SceneCanvasText extends SceneObjectBase<SceneCanvasTextState> {
       justifyContent: align,
     };
 
-    return <div style={style}>{text}</div>;
+    return <div style={style}>{textInterpolated}</div>;
   };
 }
 
diff --git a/public/app/features/scenes/components/SceneSubMenu.tsx b/public/app/features/scenes/components/SceneSubMenu.tsx
new file mode 100644
index 00000000000..2563c2f2a37
--- /dev/null
+++ b/public/app/features/scenes/components/SceneSubMenu.tsx
@@ -0,0 +1,22 @@
+import React from 'react';
+
+import { SceneObjectBase } from '../core/SceneObjectBase';
+import { SceneLayoutState, SceneComponentProps } from '../core/types';
+
+interface SceneSubMenuState extends SceneLayoutState {}
+
+export class SceneSubMenu extends SceneObjectBase<SceneSubMenuState> {
+  public static Component = SceneSubMenuRenderer;
+}
+
+function SceneSubMenuRenderer({ model }: SceneComponentProps<SceneSubMenu>) {
+  const { children } = model.useState();
+
+  return (
+    <div style={{ display: 'flex', gap: '16px' }}>
+      {children.map((child) => (
+        <child.Component key={child.state.key} model={child} />
+      ))}
+    </div>
+  );
+}
diff --git a/public/app/features/scenes/core/SceneObjectBase.test.ts b/public/app/features/scenes/core/SceneObjectBase.test.ts
index 17c86014163..c8d3f138e76 100644
--- a/public/app/features/scenes/core/SceneObjectBase.test.ts
+++ b/public/app/features/scenes/core/SceneObjectBase.test.ts
@@ -1,4 +1,4 @@
-import { SceneVariableSet } from '../variables/SceneVariableSet';
+import { SceneVariableSet } from '../variables/sets/SceneVariableSet';
 
 import { SceneDataNode } from './SceneDataNode';
 import { SceneObjectBase } from './SceneObjectBase';
diff --git a/public/app/features/scenes/core/SceneObjectBase.tsx b/public/app/features/scenes/core/SceneObjectBase.tsx
index d5871def18b..8c4e029e16d 100644
--- a/public/app/features/scenes/core/SceneObjectBase.tsx
+++ b/public/app/features/scenes/core/SceneObjectBase.tsx
@@ -9,7 +9,9 @@ import { SceneComponentWrapper } from './SceneComponentWrapper';
 import { SceneObjectStateChangedEvent } from './events';
 import { SceneDataState, SceneObject, SceneComponent, SceneEditor, SceneTimeRange, SceneObjectState } from './types';
 
-export abstract class SceneObjectBase<TState extends SceneObjectState = {}> implements SceneObject<TState> {
+export abstract class SceneObjectBase<TState extends SceneObjectState = SceneObjectState>
+  implements SceneObject<TState>
+{
   private _isActive = false;
   private _subject = new Subject<TState>();
   private _state: TState;
diff --git a/public/app/features/scenes/core/types.ts b/public/app/features/scenes/core/types.ts
index 9791ba034e5..b531d6f95e6 100644
--- a/public/app/features/scenes/core/types.ts
+++ b/public/app/features/scenes/core/types.ts
@@ -114,6 +114,7 @@ export interface SceneEditor extends SceneObject<SceneEditorState> {
 }
 
 export interface SceneTimeRangeState extends SceneObjectStatePlain, TimeRange {}
+
 export interface SceneTimeRange extends SceneObject<SceneTimeRangeState> {
   onTimeRangeChange(timeRange: TimeRange): void;
   onIntervalChanged(interval: string): void;
diff --git a/public/app/features/scenes/scenes/index.tsx b/public/app/features/scenes/scenes/index.tsx
index c28184ab78d..0a1db6b2830 100644
--- a/public/app/features/scenes/scenes/index.tsx
+++ b/public/app/features/scenes/scenes/index.tsx
@@ -3,9 +3,10 @@ import { Scene } from '../components/Scene';
 import { getFlexLayoutTest, getScenePanelRepeaterTest } from './demo';
 import { getNestedScene } from './nested';
 import { getSceneWithRows } from './sceneWithRows';
+import { getVariablesDemo } from './variablesDemo';
 
 export function getScenes(): Scene[] {
-  return [getFlexLayoutTest(), getScenePanelRepeaterTest(), getNestedScene(), getSceneWithRows()];
+  return [getFlexLayoutTest(), getScenePanelRepeaterTest(), getNestedScene(), getSceneWithRows(), getVariablesDemo()];
 }
 
 const cache: Record<string, Scene> = {};
diff --git a/public/app/features/scenes/scenes/variablesDemo.tsx b/public/app/features/scenes/scenes/variablesDemo.tsx
new file mode 100644
index 00000000000..45ae1149d8c
--- /dev/null
+++ b/public/app/features/scenes/scenes/variablesDemo.tsx
@@ -0,0 +1,63 @@
+import { getDefaultTimeRange } from '@grafana/data';
+
+import { Scene } from '../components/Scene';
+import { SceneCanvasText } from '../components/SceneCanvasText';
+import { SceneFlexLayout } from '../components/SceneFlexLayout';
+import { SceneSubMenu } from '../components/SceneSubMenu';
+import { SceneTimePicker } from '../components/SceneTimePicker';
+import { SceneTimeRange } from '../core/SceneTimeRange';
+import { VariableValueSelectors } from '../variables/components/VariableValueSelectors';
+import { SceneVariableSet } from '../variables/sets/SceneVariableSet';
+import { TestVariable } from '../variables/variants/TestVariable';
+
+export function getVariablesDemo(): Scene {
+  const scene = new Scene({
+    title: 'Variables',
+    layout: new SceneFlexLayout({
+      direction: 'row',
+      children: [
+        new SceneCanvasText({
+          text: 'Some text with a variable: ${server} - ${pod}',
+          fontSize: 40,
+          align: 'center',
+        }),
+      ],
+    }),
+    $variables: new SceneVariableSet({
+      variables: [
+        new TestVariable({
+          name: 'server',
+          query: 'A.*',
+          value: 'server',
+          text: '',
+          delayMs: 1000,
+          options: [],
+        }),
+        new TestVariable({
+          name: 'pod',
+          query: 'A.$server.*',
+          value: 'pod',
+          delayMs: 1000,
+          text: '',
+          options: [],
+        }),
+        new TestVariable({
+          name: 'handler',
+          query: 'A.$server.$pod.*',
+          value: 'handler',
+          delayMs: 1000,
+          isMulti: true,
+          text: '',
+          options: [],
+        }),
+      ],
+    }),
+    $timeRange: new SceneTimeRange(getDefaultTimeRange()),
+    actions: [new SceneTimePicker({})],
+    subMenu: new SceneSubMenu({
+      children: [new VariableValueSelectors({})],
+    }),
+  });
+
+  return scene;
+}
diff --git a/public/app/features/scenes/variables/components/VariableValueSelect.tsx b/public/app/features/scenes/variables/components/VariableValueSelect.tsx
new file mode 100644
index 00000000000..b70dcc28920
--- /dev/null
+++ b/public/app/features/scenes/variables/components/VariableValueSelect.tsx
@@ -0,0 +1,39 @@
+import { isArray } from 'lodash';
+import React from 'react';
+
+import { Select, MultiSelect } from '@grafana/ui';
+
+import { SceneComponentProps } from '../../core/types';
+import { MultiValueVariable } from '../variants/MultiValueVariable';
+
+export function VariableValueSelect({ model }: SceneComponentProps<MultiValueVariable>) {
+  const { value, key, loading, isMulti, options } = model.useState();
+
+  if (isMulti) {
+    return (
+      <MultiSelect
+        id={key}
+        placeholder="Select value"
+        width="auto"
+        value={isArray(value) ? value : [value]}
+        allowCustomValue
+        isLoading={loading}
+        options={options}
+        onChange={model.onMultiValueChange}
+      />
+    );
+  }
+
+  return (
+    <Select
+      id={key}
+      placeholder="Select value"
+      width="auto"
+      value={value}
+      allowCustomValue
+      isLoading={loading}
+      options={options}
+      onChange={model.onSingleValueChange}
+    />
+  );
+}
diff --git a/public/app/features/scenes/variables/components/VariableValueSelectors.tsx b/public/app/features/scenes/variables/components/VariableValueSelectors.tsx
new file mode 100644
index 00000000000..114cbe8e37c
--- /dev/null
+++ b/public/app/features/scenes/variables/components/VariableValueSelectors.tsx
@@ -0,0 +1,85 @@
+import React from 'react';
+
+import { VariableHide } from '@grafana/data';
+import { selectors } from '@grafana/e2e-selectors';
+import { Tooltip } from '@grafana/ui';
+
+import { SceneObjectBase } from '../../core/SceneObjectBase';
+import { SceneComponentProps, SceneObject, SceneObjectStatePlain } from '../../core/types';
+import { SceneVariables, SceneVariableState } from '../types';
+
+export class VariableValueSelectors extends SceneObjectBase<SceneObjectStatePlain> {
+  public static Component = VariableValueSelectorsRenderer;
+}
+
+function VariableValueSelectorsRenderer({ model }: SceneComponentProps<VariableValueSelectors>) {
+  const variables = getVariables(model).useState();
+
+  return (
+    <>
+      {variables.variables.map((variable) => (
+        <VariableValueSelectWrapper key={variable.state.key} variable={variable} />
+      ))}
+    </>
+  );
+}
+
+function getVariables(model: SceneObject): SceneVariables {
+  if (model.state.$variables) {
+    return model.state.$variables;
+  }
+
+  if (model.parent) {
+    return getVariables(model.parent);
+  }
+
+  throw new Error('No variables found');
+}
+
+function VariableValueSelectWrapper({ variable }: { variable: SceneObject<SceneVariableState> }) {
+  const state = variable.useState();
+
+  if (state.hide === VariableHide.hideVariable) {
+    return null;
+  }
+
+  return (
+    <div className="gf-form">
+      <VariableLabel state={state} />
+      <variable.Component model={variable} />
+    </div>
+  );
+}
+
+function VariableLabel({ state }: { state: SceneVariableState }) {
+  if (state.hide === VariableHide.hideLabel) {
+    return null;
+  }
+
+  const elementId = `var-${state.key}`;
+  const labelOrName = state.label ?? state.name;
+
+  if (state.description) {
+    return (
+      <Tooltip content={state.description} placement={'bottom'}>
+        <label
+          className="gf-form-label gf-form-label--variable"
+          data-testid={selectors.pages.Dashboard.SubMenu.submenuItemLabels(labelOrName)}
+          htmlFor={elementId}
+        >
+          {labelOrName}
+        </label>
+      </Tooltip>
+    );
+  }
+
+  return (
+    <label
+      className="gf-form-label gf-form-label--variable"
+      data-testid={selectors.pages.Dashboard.SubMenu.submenuItemLabels(labelOrName)}
+      htmlFor={elementId}
+    >
+      {labelOrName}
+    </label>
+  );
+}
diff --git a/public/app/features/scenes/variables/getVariableDependencies.test.ts b/public/app/features/scenes/variables/getVariableDependencies.test.ts
new file mode 100644
index 00000000000..ad4d19665be
--- /dev/null
+++ b/public/app/features/scenes/variables/getVariableDependencies.test.ts
@@ -0,0 +1,12 @@
+import { getVariableDependencies } from './getVariableDependencies';
+
+describe('getVariableDependencies', () => {
+  it('Can get dependencies', () => {
+    expect(getVariableDependencies('test.$plain ${withcurly} ${withformat:csv} [[deprecated]]')).toEqual([
+      'plain',
+      'withcurly',
+      'withformat',
+      'deprecated',
+    ]);
+  });
+});
diff --git a/public/app/features/scenes/variables/getVariableDependencies.ts b/public/app/features/scenes/variables/getVariableDependencies.ts
new file mode 100644
index 00000000000..f6d5db66761
--- /dev/null
+++ b/public/app/features/scenes/variables/getVariableDependencies.ts
@@ -0,0 +1,20 @@
+import { variableRegex } from 'app/features/variables/utils';
+
+export function getVariableDependencies(stringToCheck: string): string[] {
+  variableRegex.lastIndex = 0;
+
+  const matches = stringToCheck.matchAll(variableRegex);
+  if (!matches) {
+    return [];
+  }
+
+  const dependencies: string[] = [];
+
+  for (const match of matches) {
+    const [, var1, var2, , var3] = match;
+    const variableName = var1 || var2 || var3;
+    dependencies.push(variableName);
+  }
+
+  return dependencies;
+}
diff --git a/public/app/features/scenes/variables/SceneVariableSet.test.ts b/public/app/features/scenes/variables/sceneTemplateInterpolator.test.ts
similarity index 68%
rename from public/app/features/scenes/variables/SceneVariableSet.test.ts
rename to public/app/features/scenes/variables/sceneTemplateInterpolator.test.ts
index 655b6d8cd68..f79aa4a3f2e 100644
--- a/public/app/features/scenes/variables/SceneVariableSet.test.ts
+++ b/public/app/features/scenes/variables/sceneTemplateInterpolator.test.ts
@@ -1,7 +1,9 @@
 import { SceneObjectBase } from '../core/SceneObjectBase';
 import { SceneObjectStatePlain } from '../core/types';
 
-import { sceneTemplateInterpolator, SceneVariableSet, TextBoxSceneVariable } from './SceneVariableSet';
+import { sceneTemplateInterpolator } from './sceneTemplateInterpolator';
+import { SceneVariableSet } from './sets/SceneVariableSet';
+import { ConstantVariable } from './variants/ConstantVariable';
 
 interface TestSceneState extends SceneObjectStatePlain {
   nested?: TestScene;
@@ -9,27 +11,27 @@ interface TestSceneState extends SceneObjectStatePlain {
 
 class TestScene extends SceneObjectBase<TestSceneState> {}
 
-describe('SceneObject with variables', () => {
+describe('sceneTemplateInterpolator', () => {
   it('Should be interpolate and use closest variable', () => {
     const scene = new TestScene({
       $variables: new SceneVariableSet({
         variables: [
-          new TextBoxSceneVariable({
+          new ConstantVariable({
             name: 'test',
-            current: { value: 'hello' },
+            value: 'hello',
           }),
-          new TextBoxSceneVariable({
+          new ConstantVariable({
             name: 'atRootOnly',
-            current: { value: 'RootValue' },
+            value: 'RootValue',
           }),
         ],
       }),
       nested: new TestScene({
         $variables: new SceneVariableSet({
           variables: [
-            new TextBoxSceneVariable({
+            new ConstantVariable({
               name: 'test',
-              current: { value: 'nestedValue' },
+              value: 'nestedValue',
             }),
           ],
         }),
diff --git a/public/app/features/scenes/variables/SceneVariableSet.ts b/public/app/features/scenes/variables/sceneTemplateInterpolator.ts
similarity index 59%
rename from public/app/features/scenes/variables/SceneVariableSet.ts
rename to public/app/features/scenes/variables/sceneTemplateInterpolator.ts
index c56c1f15e1b..936c9030e40 100644
--- a/public/app/features/scenes/variables/SceneVariableSet.ts
+++ b/public/app/features/scenes/variables/sceneTemplateInterpolator.ts
@@ -1,18 +1,10 @@
+import { isArray } from 'lodash';
+
 import { variableRegex } from 'app/features/variables/utils';
 
-import { SceneObjectBase } from '../core/SceneObjectBase';
 import { SceneObject } from '../core/types';
 
-import { SceneVariable, SceneVariables, SceneVariableSetState, SceneVariableState } from './types';
-
-export class TextBoxSceneVariable extends SceneObjectBase<SceneVariableState> implements SceneVariable {}
-
-export class SceneVariableSet extends SceneObjectBase<SceneVariableSetState> implements SceneVariables {
-  public getVariableByName(name: string): SceneVariable | undefined {
-    // TODO: Replace with index
-    return this.state.variables.find((x) => x.state.name === name);
-  }
-}
+import { SceneVariable } from './types';
 
 export function sceneTemplateInterpolator(target: string, sceneObject: SceneObject) {
   variableRegex.lastIndex = 0;
@@ -25,7 +17,13 @@ export function sceneTemplateInterpolator(target: string, sceneObject: SceneObje
       return match;
     }
 
-    return variable.state.current.value;
+    const value = variable.getValue(fieldPath);
+
+    if (isArray(value)) {
+      return 'not supported yet';
+    }
+
+    return String(value);
   });
 }
 
@@ -39,7 +37,7 @@ function lookupSceneVariable(name: string, sceneObject: SceneObject): SceneVaria
     }
   }
 
-  const found = variables.getVariableByName(name);
+  const found = variables.getByName(name);
   if (found) {
     return found;
   } else if (sceneObject.parent) {
diff --git a/public/app/features/scenes/variables/sets/SceneVariableSet.test.ts b/public/app/features/scenes/variables/sets/SceneVariableSet.test.ts
new file mode 100644
index 00000000000..1fa11457122
--- /dev/null
+++ b/public/app/features/scenes/variables/sets/SceneVariableSet.test.ts
@@ -0,0 +1,95 @@
+import { SceneObjectBase } from '../../core/SceneObjectBase';
+import { SceneObjectStatePlain } from '../../core/types';
+import { TestVariable } from '../variants/TestVariable';
+
+import { SceneVariableSet } from './SceneVariableSet';
+
+interface TestSceneState extends SceneObjectStatePlain {
+  nested?: TestScene;
+}
+
+class TestScene extends SceneObjectBase<TestSceneState> {}
+
+describe('SceneVariableList', () => {
+  describe('When activated', () => {
+    it('Should update variables in dependency order', async () => {
+      const A = new TestVariable({ name: 'A', query: 'A.*', value: '', text: '', options: [] });
+      const B = new TestVariable({ name: 'B', query: 'A.$A', value: '', text: '', options: [] });
+      const C = new TestVariable({ name: 'C', query: 'A.$A.$B.*', value: '', text: '', options: [] });
+
+      const scene = new TestScene({
+        $variables: new SceneVariableSet({ variables: [C, B, A] }),
+      });
+
+      scene.activate();
+
+      // Should start variables with no dependencies
+      expect(A.state.loading).toBe(true);
+      expect(B.state.loading).toBe(undefined);
+      expect(C.state.loading).toBe(undefined);
+
+      // When A complete should start B
+      A.signalUpdateCompleted();
+      expect(A.state.value).toBe('AA');
+      expect(A.state.issuedQuery).toBe('A.*');
+      expect(A.state.loading).toBe(false);
+      expect(B.state.loading).toBe(true);
+
+      // Should wait with C as B is not completed yet
+      expect(C.state.loading).toBe(undefined);
+
+      // When B completes should now start C
+      B.signalUpdateCompleted();
+      expect(B.state.loading).toBe(false);
+      expect(C.state.loading).toBe(true);
+
+      // When C completes issue correct interpolated query containing the new values for A and B
+      C.signalUpdateCompleted();
+      expect(C.state.issuedQuery).toBe('A.AA.AAA.*');
+    });
+  });
+
+  describe('When variable changes value', () => {
+    it('Should start update process', async () => {
+      const A = new TestVariable({ name: 'A', query: 'A.*', value: '', text: '', options: [] });
+      const B = new TestVariable({ name: 'B', query: 'A.$A.*', value: '', text: '', options: [] });
+      const C = new TestVariable({ name: 'C', query: 'A.$A.$B.*', value: '', text: '', options: [] });
+
+      const scene = new TestScene({
+        $variables: new SceneVariableSet({ variables: [C, B, A] }),
+      });
+
+      scene.activate();
+
+      A.signalUpdateCompleted();
+      B.signalUpdateCompleted();
+      C.signalUpdateCompleted();
+
+      // When changing A should start B but not C (yet)
+      A.onSingleValueChange({ value: 'AB', text: 'AB' });
+
+      expect(B.state.loading).toBe(true);
+      expect(C.state.loading).toBe(false);
+
+      B.signalUpdateCompleted();
+      expect(B.state.value).toBe('ABA');
+      expect(C.state.loading).toBe(true);
+    });
+  });
+
+  describe('When deactivated', () => {
+    it('Should cancel running variable queries', async () => {
+      const A = new TestVariable({ name: 'A', query: 'A.*', value: '', text: '', options: [] });
+
+      const scene = new TestScene({
+        $variables: new SceneVariableSet({ variables: [A] }),
+      });
+
+      scene.activate();
+      expect(A.isGettingValues).toBe(true);
+
+      scene.deactivate();
+      expect(A.isGettingValues).toBe(false);
+    });
+  });
+});
diff --git a/public/app/features/scenes/variables/sets/SceneVariableSet.ts b/public/app/features/scenes/variables/sets/SceneVariableSet.ts
new file mode 100644
index 00000000000..8aee2ba3d57
--- /dev/null
+++ b/public/app/features/scenes/variables/sets/SceneVariableSet.ts
@@ -0,0 +1,157 @@
+import { Unsubscribable } from 'rxjs';
+
+import { SceneObjectBase } from '../../core/SceneObjectBase';
+import { SceneVariable, SceneVariables, SceneVariableSetState, SceneVariableValueChangedEvent } from '../types';
+
+export class SceneVariableSet extends SceneObjectBase<SceneVariableSetState> implements SceneVariables {
+  /** Variables that have changed in since the activation or since the first manual value change */
+  // private variablesThatHaveChanged = new Map<string, SceneVariable>();
+
+  /** Variables that are scheduled to be validated and updated */
+  private variablesToUpdate = new Map<string, SceneVariable>();
+
+  /** Cached variable dependencies */
+  private dependencies = new Map<string, string[]>();
+
+  /** Variables currently updating  */
+  private updating = new Map<string, VariableUpdateInProgress>();
+
+  public getByName(name: string): SceneVariable | undefined {
+    // TODO: Replace with index
+    return this.state.variables.find((x) => x.state.name === name);
+  }
+
+  /**
+   * Subscribes to child variable value changes
+   * And starts the variable value validation process
+   */
+  public activate(): void {
+    super.activate();
+
+    // Subscribe to changes to child variables
+    this._subs.add(this.subscribeToEvent(SceneVariableValueChangedEvent, this.onVariableValueChanged));
+    this.validateAndUpdateAll();
+  }
+
+  /**
+   * Cancel all currently running updates
+   */
+  public deactivate(): void {
+    super.deactivate();
+    this.variablesToUpdate.clear();
+
+    for (const update of this.updating.values()) {
+      update.subscription.unsubscribe();
+    }
+  }
+
+  /**
+   * This loops through variablesToUpdate and update all that that can.
+   * If one has a dependency that is currently in variablesToUpdate it will be skipped for now.
+   */
+  private updateNextBatch() {
+    for (const [name, variable] of this.variablesToUpdate) {
+      if (!variable.validateAndUpdate) {
+        throw new Error('Variable added to variablesToUpdate but does not have validateAndUpdate');
+      }
+
+      // Wait for variables that has dependencies that also needs updates
+      if (this.hasDependendencyInUpdateQueue(variable)) {
+        continue;
+      }
+
+      this.updating.set(name, {
+        variable,
+        subscription: variable.validateAndUpdate().subscribe({
+          next: () => this.validateAndUpdateCompleted(variable),
+          error: (err) => this.handleVariableError(variable, err),
+        }),
+      });
+    }
+  }
+
+  /**
+   * A variable has completed it's update process. This could mean that variables that depend on it can now be updated in turn.
+   */
+  private validateAndUpdateCompleted(variable: SceneVariable) {
+    const update = this.updating.get(variable.state.name);
+    update?.subscription.unsubscribe();
+
+    this.updating.delete(variable.state.name);
+    this.variablesToUpdate.delete(variable.state.name);
+    this.updateNextBatch();
+  }
+
+  /**
+   * TODO handle this properly (and show error in UI).
+   * Not sure if this should be handled here on in MultiValueVariable
+   */
+  private handleVariableError(variable: SceneVariable, err: Error) {
+    variable.setState({ loading: false, error: err });
+  }
+
+  /**
+   * Checks if the variable has any dependencies that is currently in variablesToUpdate
+   */
+  private hasDependendencyInUpdateQueue(variable: SceneVariable) {
+    const dependencies = this.dependencies.get(variable.state.name);
+
+    if (dependencies) {
+      for (const dep of dependencies) {
+        for (const otherVariable of this.variablesToUpdate.values()) {
+          if (otherVariable.state.name === dep) {
+            return true;
+          }
+        }
+      }
+    }
+
+    return false;
+  }
+
+  /**
+   * Extract dependencies from all variables and add those that needs update to the variablesToUpdate map
+   * Then it will start the update process.
+   */
+  private validateAndUpdateAll() {
+    for (const variable of this.state.variables) {
+      if (variable.validateAndUpdate) {
+        this.variablesToUpdate.set(variable.state.name, variable);
+      }
+
+      if (variable.getDependencies) {
+        this.dependencies.set(variable.state.name, variable.getDependencies());
+      }
+    }
+
+    this.updateNextBatch();
+  }
+
+  /**
+   * This will trigger an update of all variables that depend on it.
+   * */
+  private onVariableValueChanged = (event: SceneVariableValueChangedEvent) => {
+    const variable = event.payload;
+
+    // Ignore this change if it is currently updating
+    if (this.updating.has(variable.state.name)) {
+      return;
+    }
+
+    for (const [name, deps] of this.dependencies) {
+      if (deps.includes(variable.state.name)) {
+        const otherVariable = this.getByName(name);
+        if (otherVariable) {
+          this.variablesToUpdate.set(name, otherVariable);
+        }
+      }
+    }
+
+    this.updateNextBatch();
+  };
+}
+
+export interface VariableUpdateInProgress {
+  variable: SceneVariable;
+  subscription: Unsubscribable;
+}
diff --git a/public/app/features/scenes/variables/types.ts b/public/app/features/scenes/variables/types.ts
index e99f93b64de..3834c250561 100644
--- a/public/app/features/scenes/variables/types.ts
+++ b/public/app/features/scenes/variables/types.ts
@@ -1,24 +1,62 @@
-import { LoadingState } from '@grafana/data';
+import { Observable } from 'rxjs';
+
+import { BusEventWithPayload } from '@grafana/data';
 import { VariableHide } from 'app/features/variables/types';
 
 import { SceneObject, SceneObjectStatePlain } from '../core/types';
 
 export interface SceneVariableState extends SceneObjectStatePlain {
   name: string;
+  label?: string;
   hide?: VariableHide;
   skipUrlSync?: boolean;
-  state?: LoadingState;
+  loading?: boolean;
   error?: any | null;
   description?: string | null;
-  current: { value: string; text?: string };
+  //text: string | string[];
+  //value: string | string[]; // old current.value
 }
 
-export interface SceneVariable extends SceneObject<SceneVariableState> {}
+export interface SceneVariable<TState extends SceneVariableState = SceneVariableState> extends SceneObject<TState> {
+  /**
+   * Should return a string array of other variables this variable is using in it's definition.
+   */
+  getDependencies?(): string[];
+
+  /**
+   * This function is called on activation or when a dependency changes.
+   */
+  validateAndUpdate?(): Observable<ValidateAndUpdateResult>;
+
+  /**
+   * Should return the value for the given field path
+   */
+  getValue(fieldPath?: string): VariableValue;
+
+  /**
+   * Should return the value display text, used by the "text" formatter
+   * Example: ${podId:text}
+   * Useful for variables that have non user friendly values but friendly display text names.
+   */
+  getValueText?(): string;
+}
+
+export type VariableValue = string | string[] | number | number[] | boolean | boolean[] | null | undefined;
+
+export interface ValidateAndUpdateResult {}
+export interface VariableValueOption {
+  label: string;
+  value: string;
+}
 
 export interface SceneVariableSetState extends SceneObjectStatePlain {
   variables: SceneVariable[];
 }
 
 export interface SceneVariables extends SceneObject<SceneVariableSetState> {
-  getVariableByName(name: string): SceneVariable | undefined;
+  getByName(name: string): SceneVariable | undefined;
+}
+
+export class SceneVariableValueChangedEvent extends BusEventWithPayload<SceneVariable> {
+  public static type = 'scene-variable-changed-value';
 }
diff --git a/public/app/features/scenes/variables/variants/ConstantVariable.ts b/public/app/features/scenes/variables/variants/ConstantVariable.ts
new file mode 100644
index 00000000000..05f97a342bf
--- /dev/null
+++ b/public/app/features/scenes/variables/variants/ConstantVariable.ts
@@ -0,0 +1,15 @@
+import { SceneObjectBase } from '../../core/SceneObjectBase';
+import { SceneVariable, SceneVariableState, VariableValue } from '../types';
+
+export interface ConstantVariableState extends SceneVariableState {
+  value: string;
+}
+
+export class ConstantVariable
+  extends SceneObjectBase<ConstantVariableState>
+  implements SceneVariable<ConstantVariableState>
+{
+  public getValue(): VariableValue {
+    return this.state.value;
+  }
+}
diff --git a/public/app/features/scenes/variables/variants/MultiValueVariable.test.ts b/public/app/features/scenes/variables/variants/MultiValueVariable.test.ts
new file mode 100644
index 00000000000..fe7c5ddc457
--- /dev/null
+++ b/public/app/features/scenes/variables/variants/MultiValueVariable.test.ts
@@ -0,0 +1,51 @@
+import { lastValueFrom, Observable, of } from 'rxjs';
+
+import { VariableValueOption } from '../types';
+import { MultiValueVariable, MultiValueVariableState, VariableGetOptionsArgs } from '../variants/MultiValueVariable';
+
+export interface ExampleVariableState extends MultiValueVariableState {
+  optionsToReturn: VariableValueOption[];
+}
+
+class ExampleVariable extends MultiValueVariable<ExampleVariableState> {
+  public getValueOptions(args: VariableGetOptionsArgs): Observable<VariableValueOption[]> {
+    return of(this.state.optionsToReturn);
+  }
+}
+
+describe('MultiValueVariable', () => {
+  describe('When validateAndUpdate is called', () => {
+    it('Should pick first value if current value is not valid', async () => {
+      const variable = new ExampleVariable({
+        name: 'test',
+        options: [],
+        optionsToReturn: [
+          { label: 'B', value: 'B' },
+          { label: 'C', value: 'C' },
+        ],
+        value: 'A',
+        text: 'A',
+      });
+
+      await lastValueFrom(variable.validateAndUpdate());
+
+      expect(variable.state.value).toBe('B');
+      expect(variable.state.text).toBe('B');
+    });
+
+    it('Should keep current value if current value is valid', async () => {
+      const variable = new ExampleVariable({
+        name: 'test',
+        options: [],
+        optionsToReturn: [{ label: 'A', value: 'A' }],
+        value: 'A',
+        text: 'A',
+      });
+
+      await lastValueFrom(variable.validateAndUpdate());
+
+      expect(variable.state.value).toBe('A');
+      expect(variable.state.text).toBe('A');
+    });
+  });
+});
diff --git a/public/app/features/scenes/variables/variants/MultiValueVariable.ts b/public/app/features/scenes/variables/variants/MultiValueVariable.ts
new file mode 100644
index 00000000000..54519f4959c
--- /dev/null
+++ b/public/app/features/scenes/variables/variants/MultiValueVariable.ts
@@ -0,0 +1,106 @@
+import { map, Observable } from 'rxjs';
+
+import { SelectableValue } from '@grafana/data';
+
+import { SceneObjectBase } from '../../core/SceneObjectBase';
+import { SceneObject } from '../../core/types';
+import {
+  SceneVariable,
+  SceneVariableValueChangedEvent,
+  SceneVariableState,
+  ValidateAndUpdateResult,
+  VariableValue,
+  VariableValueOption,
+} from '../types';
+
+export interface MultiValueVariableState extends SceneVariableState {
+  value: string | string[]; // old current.text
+  text: string | string[]; // old current.value
+  options: VariableValueOption[];
+  isMulti?: boolean;
+}
+
+export interface VariableGetOptionsArgs {
+  searchFilter?: string;
+}
+
+export abstract class MultiValueVariable<TState extends MultiValueVariableState = MultiValueVariableState>
+  extends SceneObjectBase<TState>
+  implements SceneVariable<TState>
+{
+  /**
+   * The source of value options.
+   */
+  public abstract getValueOptions(args: VariableGetOptionsArgs): Observable<VariableValueOption[]>;
+
+  /**
+   * This function is called on when SceneVariableSet is activated or when a dependency changes.
+   */
+  public validateAndUpdate(): Observable<ValidateAndUpdateResult> {
+    return this.getValueOptions({}).pipe(
+      map((options) => {
+        this.updateValueGivenNewOptions(options);
+        return {};
+      })
+    );
+  }
+
+  /**
+   * Check if current value is valid given new options. If not update the value.
+   * TODO: Handle multi valued variables
+   */
+  private updateValueGivenNewOptions(options: VariableValueOption[]) {
+    if (options.length === 0) {
+      // TODO handle the no value state
+      this.setStateHelper({ value: '?', loading: false });
+      return;
+    }
+
+    const foundCurrent = options.find((x) => x.value === this.state.value);
+    if (!foundCurrent) {
+      // Current value is not valid. Set to first of the available options
+      this.changeValueAndPublishChangeEvent(options[0].value, options[0].label);
+    } else {
+      // current value is still ok
+      this.setStateHelper({ loading: false });
+    }
+  }
+
+  public getValue(): VariableValue {
+    return this.state.value;
+  }
+
+  public getValueText(): string {
+    if (Array.isArray(this.state.text)) {
+      return this.state.text.join(' + ');
+    }
+
+    return this.state.text;
+  }
+
+  private changeValueAndPublishChangeEvent(value: string | string[], text: string | string[]) {
+    if (value !== this.state.value || text !== this.state.text) {
+      this.setStateHelper({ value, text, loading: false });
+      this.publishEvent(new SceneVariableValueChangedEvent(this), true);
+    }
+  }
+
+  /**
+   * This helper function is to counter the contravariance of setState
+   */
+  private setStateHelper(state: Partial<MultiValueVariableState>) {
+    const test: SceneObject<MultiValueVariableState> = this;
+    test.setState(state);
+  }
+
+  public onSingleValueChange = (value: SelectableValue<string>) => {
+    this.changeValueAndPublishChangeEvent(value.value!, value.label!);
+  };
+
+  public onMultiValueChange = (value: Array<SelectableValue<string>>) => {
+    this.changeValueAndPublishChangeEvent(
+      value.map((v) => v.value!),
+      value.map((v) => v.label!)
+    );
+  };
+}
diff --git a/public/app/features/scenes/variables/variants/TestVariable.tsx b/public/app/features/scenes/variables/variants/TestVariable.tsx
new file mode 100644
index 00000000000..c517861b3e5
--- /dev/null
+++ b/public/app/features/scenes/variables/variants/TestVariable.tsx
@@ -0,0 +1,79 @@
+import React from 'react';
+import { Observable, Subject } from 'rxjs';
+
+import { queryMetricTree } from 'app/plugins/datasource/testdata/metricTree';
+
+import { SceneComponentProps } from '../../core/types';
+import { VariableValueSelect } from '../components/VariableValueSelect';
+import { getVariableDependencies } from '../getVariableDependencies';
+import { sceneTemplateInterpolator } from '../sceneTemplateInterpolator';
+import { VariableValueOption } from '../types';
+
+import { MultiValueVariable, MultiValueVariableState, VariableGetOptionsArgs } from './MultiValueVariable';
+
+export interface TestVariableState extends MultiValueVariableState {
+  //query: DataQuery;
+  query: string;
+  delayMs?: number;
+  issuedQuery?: string;
+}
+
+/**
+ * This variable is only designed for unit tests and potentially e2e tests.
+ */
+export class TestVariable extends MultiValueVariable<TestVariableState> {
+  private completeUpdate = new Subject<number>();
+  public isGettingValues = true;
+
+  public getValueOptions(args: VariableGetOptionsArgs): Observable<VariableValueOption[]> {
+    const { delayMs } = this.state;
+
+    return new Observable<VariableValueOption[]>((observer) => {
+      this.setState({ loading: true });
+
+      this.completeUpdate.subscribe({
+        next: () => {
+          observer.next(this.issueQuery());
+        },
+      });
+
+      let timeout: NodeJS.Timeout | undefined;
+
+      if (delayMs) {
+        timeout = setTimeout(() => this.signalUpdateCompleted(), delayMs);
+      }
+
+      this.isGettingValues = true;
+
+      return () => {
+        clearTimeout(timeout);
+        this.isGettingValues = false;
+      };
+    });
+  }
+
+  private issueQuery() {
+    const interpolatedQuery = sceneTemplateInterpolator(this.state.query, this);
+    const options = queryMetricTree(interpolatedQuery).map((x) => ({ label: x.name, value: x.name }));
+
+    this.setState({
+      issuedQuery: interpolatedQuery,
+      options,
+    });
+
+    return options;
+  }
+
+  /** Useful from tests */
+  public signalUpdateCompleted() {
+    this.completeUpdate.next(1);
+  }
+
+  public getDependencies() {
+    return getVariableDependencies(this.state.query);
+  }
+
+  public static Component = ({ model }: SceneComponentProps<MultiValueVariable>) => {
+    return <VariableValueSelect model={model} />;
+  };
+}
diff --git a/public/app/features/variables/pickers/shared/VariableLink.tsx b/public/app/features/variables/pickers/shared/VariableLink.tsx
index 21f2d5c60b0..e35546e4212 100644
--- a/public/app/features/variables/pickers/shared/VariableLink.tsx
+++ b/public/app/features/variables/pickers/shared/VariableLink.tsx
@@ -10,7 +10,7 @@ interface Props {
   text: string;
   loading: boolean;
   onCancel: () => void;
-  disabled: boolean; // todo: optional?
+  disabled?: boolean;
   /**
    *  htmlFor, needed for the label
    */
diff --git a/public/test/setupTests.ts b/public/test/setupTests.ts
index d9e7f13441b..ac9da47b115 100644
--- a/public/test/setupTests.ts
+++ b/public/test/setupTests.ts
@@ -8,6 +8,7 @@ import { matchers } from './matchers';
 failOnConsole({
   shouldFailOnLog: true,
 });
+
 expect.extend(matchers);
 
 i18next.use(initReactI18next).init({