diff --git a/d2ir/compile.go b/d2ir/compile.go
index 1aaa32150..3efd94dd8 100644
--- a/d2ir/compile.go
+++ b/d2ir/compile.go
@@ -265,22 +265,6 @@ func (c *compiler) resolveSubstitution(vars *Map, substitution *d2ast.Substituti
 	return nil
 }
 
-func (c *compiler) overlayVars(base, overlay *Map) {
-	vars := overlay.GetField("vars")
-	if vars == nil {
-		return
-	}
-	vars = vars.Copy(base).(*Field)
-
-	baseVars := base.GetField("vars")
-	if baseVars != nil {
-		OverlayMap(vars.Map(), baseVars.Map())
-		base.DeleteField("vars")
-	}
-
-	base.Fields = append(base.Fields, vars)
-}
-
 func (c *compiler) overlay(base *Map, f *Field) {
 	if f.Map() == nil || f.Primary() != nil {
 		c.errorf(f.References[0].Context.Key, "invalid %s", NodeBoardKind(f))
@@ -393,7 +377,6 @@ func (c *compiler) compileField(dst *Map, kp *d2ast.KeyPath, refctx *RefContext)
 				}
 			}
 		case BoardLayer:
-			c.overlayVars(f.Map(), ParentBoard(f).Map())
 		default:
 			// If new board type, use that as the new scope AST, otherwise, carry on
 			scopeAST = refctx.ScopeAST
diff --git a/testdata/d2compiler/TestCompile2/vars/boards/layer-2.exp.json b/testdata/d2compiler/TestCompile2/vars/boards/layer-2.exp.json
index bd02109b5..891273336 100644
--- a/testdata/d2compiler/TestCompile2/vars/boards/layer-2.exp.json
+++ b/testdata/d2compiler/TestCompile2/vars/boards/layer-2.exp.json
@@ -372,38 +372,6 @@
                           },
                           "value": {}
                         }
-                      },
-                      {
-                        "map_key": {
-                          "range": ",0:0:0-0:0:0",
-                          "key": {
-                            "range": ",0:0:0-0:0:0",
-                            "path": [
-                              {
-                                "unquoted_string": {
-                                  "range": ",0:0:0-0:0:0",
-                                  "value": [
-                                    {
-                                      "string": "y"
-                                    }
-                                  ]
-                                }
-                              }
-                            ]
-                          },
-                          "primary": {
-                            "unquoted_string": {
-                              "range": "d2/testdata/d2compiler/TestCompile2/vars/boards/layer-2.d2,3:5:30-3:15:40",
-                              "value": [
-                                {
-                                  "string": "root var y",
-                                  "raw_string": "root var y"
-                                }
-                              ]
-                            }
-                          },
-                          "value": {}
-                        }
                       }
                     ]
                   }
diff --git a/testdata/d2compiler/TestCompile2/vars/boards/layer.exp.json b/testdata/d2compiler/TestCompile2/vars/boards/layer.exp.json
index 7f3f693b1..80e36aa1e 100644
--- a/testdata/d2compiler/TestCompile2/vars/boards/layer.exp.json
+++ b/testdata/d2compiler/TestCompile2/vars/boards/layer.exp.json
@@ -191,66 +191,6 @@
         "ast": {
           "range": ",1:0:0-2:0:0",
           "nodes": [
-            {
-              "map_key": {
-                "range": ",0:0:0-0:0:0",
-                "key": {
-                  "range": ",0:0:0-0:0:0",
-                  "path": [
-                    {
-                      "unquoted_string": {
-                        "range": ",0:0:0-0:0:0",
-                        "value": [
-                          {
-                            "string": "vars"
-                          }
-                        ]
-                      }
-                    }
-                  ]
-                },
-                "primary": {},
-                "value": {
-                  "map": {
-                    "range": ",1:0:0-2:0:0",
-                    "nodes": [
-                      {
-                        "map_key": {
-                          "range": ",0:0:0-0:0:0",
-                          "key": {
-                            "range": ",0:0:0-0:0:0",
-                            "path": [
-                              {
-                                "unquoted_string": {
-                                  "range": ",0:0:0-0:0:0",
-                                  "value": [
-                                    {
-                                      "string": "x"
-                                    }
-                                  ]
-                                }
-                              }
-                            ]
-                          },
-                          "primary": {
-                            "unquoted_string": {
-                              "range": "d2/testdata/d2compiler/TestCompile2/vars/boards/layer.d2,2:5:14-2:13:22",
-                              "value": [
-                                {
-                                  "string": "im a var",
-                                  "raw_string": "im a var"
-                                }
-                              ]
-                            }
-                          },
-                          "value": {}
-                        }
-                      }
-                    ]
-                  }
-                }
-              }
-            },
             {
               "map_key": {
                 "range": ",0:0:0-0:0:0",
diff --git a/testdata/d2compiler/TestCompile2/vars/boards/overlay.exp.json b/testdata/d2compiler/TestCompile2/vars/boards/overlay.exp.json
index 23431936c..5f46293b9 100644
--- a/testdata/d2compiler/TestCompile2/vars/boards/overlay.exp.json
+++ b/testdata/d2compiler/TestCompile2/vars/boards/overlay.exp.json
@@ -492,38 +492,6 @@
                   "map": {
                     "range": ",1:0:0-2:0:0",
                     "nodes": [
-                      {
-                        "map_key": {
-                          "range": ",0:0:0-0:0:0",
-                          "key": {
-                            "range": ",0:0:0-0:0:0",
-                            "path": [
-                              {
-                                "unquoted_string": {
-                                  "range": ",0:0:0-0:0:0",
-                                  "value": [
-                                    {
-                                      "string": "x"
-                                    }
-                                  ]
-                                }
-                              }
-                            ]
-                          },
-                          "primary": {
-                            "unquoted_string": {
-                              "range": "d2/testdata/d2compiler/TestCompile2/vars/boards/overlay.d2,2:5:14-2:13:22",
-                              "value": [
-                                {
-                                  "string": "im x var",
-                                  "raw_string": "im x var"
-                                }
-                              ]
-                            }
-                          },
-                          "value": {}
-                        }
-                      },
                       {
                         "map_key": {
                           "range": ",0:0:0-0:0:0",