diff --git a/examples/charts/render-test-chart/Chart.yaml b/examples/charts/render-test-chart/Chart.yaml
new file mode 100644
index 00000000..f4ea219c
--- /dev/null
+++ b/examples/charts/render-test-chart/Chart.yaml
@@ -0,0 +1,5 @@
+apiVersion: v1
+appVersion: v0.0.1
+description: Local Helm chart to test rendering.
+name: local-renderer
+version: 0.0.1
diff --git a/examples/charts/render-test-chart/templates/output.yaml b/examples/charts/render-test-chart/templates/output.yaml
new file mode 100644
index 00000000..add0ffbf
--- /dev/null
+++ b/examples/charts/render-test-chart/templates/output.yaml
@@ -0,0 +1,5 @@
+kind: rendering
+metadata:
+  name: render-test
+outputYaml:
+{{ toYaml .Values.outputYaml | indent 2 }}
diff --git a/examples/charts/render-test-chart/values.yaml b/examples/charts/render-test-chart/values.yaml
new file mode 100644
index 00000000..8b85ef15
--- /dev/null
+++ b/examples/charts/render-test-chart/values.yaml
@@ -0,0 +1,2 @@
+outputYaml:
+  fromChartDefaultValues: true
diff --git a/examples/inheritance-test/.gitignore b/examples/inheritance-test/.gitignore
new file mode 100644
index 00000000..c0c2ea92
--- /dev/null
+++ b/examples/inheritance-test/.gitignore
@@ -0,0 +1 @@
+**/.myks/tmp/
diff --git a/examples/inheritance-test/.myks.yaml b/examples/inheritance-test/.myks.yaml
new file mode 100644
index 00000000..78059104
--- /dev/null
+++ b/examples/inheritance-test/.myks.yaml
@@ -0,0 +1,7 @@
+---
+# Sets the number of applications to be processed in parallel.
+# The default (0) is no limit.
+async: 0
+# One of the zerolog log levels.
+# See: https://github.com/rs/zerolog#leveled-logging
+log-level: info
diff --git a/examples/inheritance-test/envs/_apps/helm-installation/app-data.ytt.yaml b/examples/inheritance-test/envs/_apps/helm-installation/app-data.ytt.yaml
new file mode 100644
index 00000000..9021ecaf
--- /dev/null
+++ b/examples/inheritance-test/envs/_apps/helm-installation/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  envGroupValue: true
diff --git a/examples/inheritance-test/envs/_apps/helm-installation/helm/render-test.yaml b/examples/inheritance-test/envs/_apps/helm-installation/helm/render-test.yaml
new file mode 100644
index 00000000..76101c0b
--- /dev/null
+++ b/examples/inheritance-test/envs/_apps/helm-installation/helm/render-test.yaml
@@ -0,0 +1,5 @@
+#@ load("@ytt:data", "data")
+---
+outputYaml:
+  fromEnvGroup: true
+  fromEnvGroupAppData: #@ data.values.application.envGroupValue
diff --git a/examples/inheritance-test/envs/_apps/ytt-installation/app-data.ytt.yaml b/examples/inheritance-test/envs/_apps/ytt-installation/app-data.ytt.yaml
new file mode 100644
index 00000000..9021ecaf
--- /dev/null
+++ b/examples/inheritance-test/envs/_apps/ytt-installation/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  envGroupValue: true
diff --git a/examples/inheritance-test/envs/_apps/ytt-installation/ytt/app.yaml b/examples/inheritance-test/envs/_apps/ytt-installation/ytt/app.yaml
new file mode 100644
index 00000000..3634e7a0
--- /dev/null
+++ b/examples/inheritance-test/envs/_apps/ytt-installation/ytt/app.yaml
@@ -0,0 +1,8 @@
+#@ load("@ytt:data", "data")
+---
+kind: rendering
+metadata:
+  name: env-group
+outputYaml:
+  fromEnvGroup: true
+  fromEnvGroupAppData: #@ data.values.application.envGroupValue
diff --git a/examples/inheritance-test/envs/_proto/helm-render-test/app-data.ytt.yaml b/examples/inheritance-test/envs/_proto/helm-render-test/app-data.ytt.yaml
new file mode 100644
index 00000000..5ebe063e
--- /dev/null
+++ b/examples/inheritance-test/envs/_proto/helm-render-test/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  protoOverwriteValue: true
diff --git a/examples/inheritance-test/envs/_proto/helm-render-test/helm/render-test.yaml b/examples/inheritance-test/envs/_proto/helm-render-test/helm/render-test.yaml
new file mode 100644
index 00000000..ffbbbac9
--- /dev/null
+++ b/examples/inheritance-test/envs/_proto/helm-render-test/helm/render-test.yaml
@@ -0,0 +1,5 @@
+#@ load("@ytt:data", "data")
+---
+outputYaml:
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: #@ data.values.application.protoOverwriteValue
diff --git a/examples/inheritance-test/envs/_proto/ytt-render-test/app-data.ytt.yaml b/examples/inheritance-test/envs/_proto/ytt-render-test/app-data.ytt.yaml
new file mode 100644
index 00000000..5ebe063e
--- /dev/null
+++ b/examples/inheritance-test/envs/_proto/ytt-render-test/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  protoOverwriteValue: true
diff --git a/examples/inheritance-test/envs/_proto/ytt-render-test/ytt/proto.yaml b/examples/inheritance-test/envs/_proto/ytt-render-test/ytt/proto.yaml
new file mode 100644
index 00000000..49c5358b
--- /dev/null
+++ b/examples/inheritance-test/envs/_proto/ytt-render-test/ytt/proto.yaml
@@ -0,0 +1,8 @@
+#@ load("@ytt:data", "data")
+---
+kind: rendering
+metadata:
+  name: proto
+outputYaml:
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: #@ data.values.application.protoOverwriteValue
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/helm/render-test.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/helm/render-test.yaml
new file mode 100644
index 00000000..7f714736
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/helm/render-test.yaml
@@ -0,0 +1,9 @@
+outputYaml:
+  fromPrototype: true
+  fromPrototypeAppData: true
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: true
+  fromEnvGroup: true
+  fromEnvGroupAppData: true
+  fromAppConfig: true
+  fromAppConfigAppData: true
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.lock.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.lock.yaml
new file mode 100644
index 00000000..fbb7cb6c
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.lock.yaml
@@ -0,0 +1,7 @@
+apiVersion: vendir.k14s.io/v1alpha1
+directories:
+- contents:
+  - directory: {}
+    path: .
+  path: charts/render-test
+kind: LockConfig
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.sync.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.sync.yaml
new file mode 100644
index 00000000..c00a1828
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.sync.yaml
@@ -0,0 +1 @@
+charts/render-test: f6e95b613adfa1959faef2c0d661b198dcfa7b9058d89dd76418ed58d67b5f95
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.yaml
new file mode 100644
index 00000000..a266e602
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/.myks/vendir.yaml
@@ -0,0 +1,9 @@
+apiVersion: vendir.k14s.io/v1alpha1
+kind: Config
+directories:
+- path: charts/render-test
+  contents:
+  - path: .
+    directory:
+      name: render-test
+      path: ../../../../../../charts/render-test-chart
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/app-data.ytt.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/app-data.ytt.yaml
new file mode 100644
index 00000000..f7f4cd8a
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  appValue: true
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/helm/render-test.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/helm/render-test.yaml
new file mode 100644
index 00000000..df9c4b87
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/helm/render-test.yaml
@@ -0,0 +1,5 @@
+#@ load("@ytt:data", "data")
+---
+outputYaml:
+  fromAppConfig: true
+  fromAppConfigAppData: #@ data.values.application.appValue
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/Chart.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/Chart.yaml
new file mode 100644
index 00000000..f4ea219c
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/Chart.yaml
@@ -0,0 +1,5 @@
+apiVersion: v1
+appVersion: v0.0.1
+description: Local Helm chart to test rendering.
+name: local-renderer
+version: 0.0.1
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/templates/output.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/templates/output.yaml
new file mode 100644
index 00000000..add0ffbf
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/templates/output.yaml
@@ -0,0 +1,5 @@
+kind: rendering
+metadata:
+  name: render-test
+outputYaml:
+{{ toYaml .Values.outputYaml | indent 2 }}
diff --git a/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/values.yaml b/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/values.yaml
new file mode 100644
index 00000000..8b85ef15
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/helm-installation/vendor/charts/render-test/values.yaml
@@ -0,0 +1,2 @@
+outputYaml:
+  fromChartDefaultValues: true
diff --git a/examples/inheritance-test/envs/dev/_apps/ytt-installation/app-data.ytt.yaml b/examples/inheritance-test/envs/dev/_apps/ytt-installation/app-data.ytt.yaml
new file mode 100644
index 00000000..f7f4cd8a
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/ytt-installation/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  appValue: true
diff --git a/examples/inheritance-test/envs/dev/_apps/ytt-installation/ytt/app.yaml b/examples/inheritance-test/envs/dev/_apps/ytt-installation/ytt/app.yaml
new file mode 100644
index 00000000..c79e733f
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_apps/ytt-installation/ytt/app.yaml
@@ -0,0 +1,8 @@
+#@ load("@ytt:data", "data")
+---
+kind: rendering
+metadata:
+  name: app
+outputYaml:
+  fromAppConfig: true
+  fromAppConfigAppData: #@ data.values.application.appValue
diff --git a/examples/inheritance-test/envs/dev/_proto/helm-render-test/app-data.ytt.yaml b/examples/inheritance-test/envs/dev/_proto/helm-render-test/app-data.ytt.yaml
new file mode 100644
index 00000000..5ebe063e
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_proto/helm-render-test/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  protoOverwriteValue: true
diff --git a/examples/inheritance-test/envs/dev/_proto/helm-render-test/helm/render-test.yaml b/examples/inheritance-test/envs/dev/_proto/helm-render-test/helm/render-test.yaml
new file mode 100644
index 00000000..ffbbbac9
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_proto/helm-render-test/helm/render-test.yaml
@@ -0,0 +1,5 @@
+#@ load("@ytt:data", "data")
+---
+outputYaml:
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: #@ data.values.application.protoOverwriteValue
diff --git a/examples/inheritance-test/envs/dev/_proto/ytt-render-test/app-data.ytt.yaml b/examples/inheritance-test/envs/dev/_proto/ytt-render-test/app-data.ytt.yaml
new file mode 100644
index 00000000..5ebe063e
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_proto/ytt-render-test/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  protoOverwriteValue: true
diff --git a/examples/inheritance-test/envs/dev/_proto/ytt-render-test/ytt/proto.yaml b/examples/inheritance-test/envs/dev/_proto/ytt-render-test/ytt/proto.yaml
new file mode 100644
index 00000000..49c5358b
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/_proto/ytt-render-test/ytt/proto.yaml
@@ -0,0 +1,8 @@
+#@ load("@ytt:data", "data")
+---
+kind: rendering
+metadata:
+  name: proto
+outputYaml:
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: #@ data.values.application.protoOverwriteValue
diff --git a/examples/inheritance-test/envs/dev/env-data.ytt.yaml b/examples/inheritance-test/envs/dev/env-data.ytt.yaml
new file mode 100644
index 00000000..2d667290
--- /dev/null
+++ b/examples/inheritance-test/envs/dev/env-data.ytt.yaml
@@ -0,0 +1,11 @@
+#@data/values
+---
+environment:
+  id: mykso-dev
+  #! applications:  # already defined one level above
+  #!  - proto: httpbingo # already defined one level above
+  applications:
+    - proto: helm-render-test
+      name: helm-installation
+    - proto: ytt-render-test
+      name: ytt-installation
diff --git a/examples/inheritance-test/envs/env-data.ytt.yaml b/examples/inheritance-test/envs/env-data.ytt.yaml
new file mode 100644
index 00000000..ddc95a8e
--- /dev/null
+++ b/examples/inheritance-test/envs/env-data.ytt.yaml
@@ -0,0 +1,28 @@
+#! This is an example of a data values file for the root environment.
+#! All nested environments inherit these values. The values can be overridden in nested environments.
+#! This file is a good place to define default values for all environments.
+#!
+#! To change the schema of the data values, use `data/values-schema` annotation instead of `data/values`.
+#! Refer to the documentation of ytt overlays and data values for more information.
+
+#@data/values
+---
+argocd:
+  namespace: system-argocd
+  app:
+    prefix: app-
+    #! Disable finalizers to preserve resources after deleting the ArgoCD application.
+    finalizers: []
+    source:
+      plugin:
+        name: argocd-vault-plugin-v1.0.0
+      #! Fixed config to run tests successfull in pipeline
+      targetRevision: main
+      repoURL: git@github.com:mykso/myks.git
+  project:
+    prefix: env-
+
+#! Fixed git config to run tests successfull in pipeline.
+myks:
+  gitRepoBranch: "main"
+  gitRepoUrl: "git@github.com:mykso/myks.git"
\ No newline at end of file
diff --git a/examples/inheritance-test/prototypes/helm-render-test/app-data.ytt.yaml b/examples/inheritance-test/prototypes/helm-render-test/app-data.ytt.yaml
new file mode 100644
index 00000000..8e4d7fd0
--- /dev/null
+++ b/examples/inheritance-test/prototypes/helm-render-test/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  baseValue: true
diff --git a/examples/inheritance-test/prototypes/helm-render-test/helm/render-test.yaml b/examples/inheritance-test/prototypes/helm-render-test/helm/render-test.yaml
new file mode 100644
index 00000000..1e7b7ee9
--- /dev/null
+++ b/examples/inheritance-test/prototypes/helm-render-test/helm/render-test.yaml
@@ -0,0 +1,5 @@
+#@ load("@ytt:data", "data")
+---
+outputYaml:
+  fromPrototype: true
+  fromPrototypeAppData: #@ data.values.application.baseValue
diff --git a/examples/inheritance-test/prototypes/helm-render-test/vendir/base.ytt.yaml b/examples/inheritance-test/prototypes/helm-render-test/vendir/base.ytt.yaml
new file mode 100644
index 00000000..39cfb15c
--- /dev/null
+++ b/examples/inheritance-test/prototypes/helm-render-test/vendir/base.ytt.yaml
@@ -0,0 +1,13 @@
+#@ load("@ytt:data", "data")
+
+#@ app = data.values.application
+---
+apiVersion: vendir.k14s.io/v1alpha1
+kind: Config
+directories:
+  - path: #@ "charts/" + app.name
+    contents:
+      - path: .
+        directory:
+          name: #@ app.name
+          path: ../../../../../../charts/render-test-chart
diff --git a/examples/inheritance-test/prototypes/helm-render-test/vendir/vendir-data.ytt.yaml b/examples/inheritance-test/prototypes/helm-render-test/vendir/vendir-data.ytt.yaml
new file mode 100644
index 00000000..afe13abb
--- /dev/null
+++ b/examples/inheritance-test/prototypes/helm-render-test/vendir/vendir-data.ytt.yaml
@@ -0,0 +1,9 @@
+#@data/values-schema
+---
+#@overlay/match-child-defaults missing_ok=True
+application:
+  #! WARNING: The order of the keys (alphabetical) is important for renovate.
+  #!          When changed, renovate won't be able to detect the new version.
+  #!          See renovate.json for more details.
+  #! renovate: datasource=helm
+  name: render-test
diff --git a/examples/inheritance-test/prototypes/ytt-render-test/app-data.ytt.yaml b/examples/inheritance-test/prototypes/ytt-render-test/app-data.ytt.yaml
new file mode 100644
index 00000000..8e4d7fd0
--- /dev/null
+++ b/examples/inheritance-test/prototypes/ytt-render-test/app-data.ytt.yaml
@@ -0,0 +1,5 @@
+#@data/values-schema
+#@overlay/match-child-defaults missing_ok=True
+---
+application:
+  baseValue: true
diff --git a/examples/inheritance-test/prototypes/ytt-render-test/ytt/base.yaml b/examples/inheritance-test/prototypes/ytt-render-test/ytt/base.yaml
new file mode 100644
index 00000000..b725dc4b
--- /dev/null
+++ b/examples/inheritance-test/prototypes/ytt-render-test/ytt/base.yaml
@@ -0,0 +1,8 @@
+#@ load("@ytt:data", "data")
+---
+kind: rendering
+metadata:
+  name: base
+outputYaml:
+  fromPrototype: true
+  fromPrototypeAppData: #@ data.values.application.baseValue
diff --git a/examples/inheritance-test/readme.md b/examples/inheritance-test/readme.md
new file mode 100644
index 00000000..6821066c
--- /dev/null
+++ b/examples/inheritance-test/readme.md
@@ -0,0 +1,9 @@
+# Inheritance test
+
+This examples tests the full power of myks inheritance for helm and ytt rendering leveraging:
+
+- config from the base app
+- config from environment group level
+- config from application level
+
+Both environment group level and application level are rendering with prototype override config as well as appliction specific config.
diff --git a/examples/inheritance-test/rendered/argocd/mykso-dev/app-helm-installation.yaml b/examples/inheritance-test/rendered/argocd/mykso-dev/app-helm-installation.yaml
new file mode 100644
index 00000000..408f0b7a
--- /dev/null
+++ b/examples/inheritance-test/rendered/argocd/mykso-dev/app-helm-installation.yaml
@@ -0,0 +1,25 @@
+apiVersion: argoproj.io/v1alpha1
+kind: Application
+metadata:
+  name: app-mykso-dev-helm-installation
+  namespace: system-argocd
+  finalizers:
+  - resources-finalizer.argocd.argoproj.io
+spec:
+  project: env-mykso-dev
+  destination:
+    name: mykso-dev
+    namespace: helm-installation
+  source:
+    path: examples/inheritance-test/rendered/envs/mykso-dev/helm-installation
+    plugin:
+      name: argocd-vault-plugin-v1.0.0
+    repoURL: git@github.com:mykso/myks.git
+    targetRevision: main
+  syncPolicy:
+    automated:
+      prune: true
+      selfHeal: true
+    syncOptions:
+    - CreateNamespace=true
+    - ServerSideApply=true
diff --git a/examples/inheritance-test/rendered/argocd/mykso-dev/app-ytt-installation.yaml b/examples/inheritance-test/rendered/argocd/mykso-dev/app-ytt-installation.yaml
new file mode 100644
index 00000000..230f89a8
--- /dev/null
+++ b/examples/inheritance-test/rendered/argocd/mykso-dev/app-ytt-installation.yaml
@@ -0,0 +1,25 @@
+apiVersion: argoproj.io/v1alpha1
+kind: Application
+metadata:
+  name: app-mykso-dev-ytt-installation
+  namespace: system-argocd
+  finalizers:
+  - resources-finalizer.argocd.argoproj.io
+spec:
+  project: env-mykso-dev
+  destination:
+    name: mykso-dev
+    namespace: ytt-installation
+  source:
+    path: examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation
+    plugin:
+      name: argocd-vault-plugin-v1.0.0
+    repoURL: git@github.com:mykso/myks.git
+    targetRevision: main
+  syncPolicy:
+    automated:
+      prune: true
+      selfHeal: true
+    syncOptions:
+    - CreateNamespace=true
+    - ServerSideApply=true
diff --git a/examples/inheritance-test/rendered/argocd/mykso-dev/env-mykso-dev.yaml b/examples/inheritance-test/rendered/argocd/mykso-dev/env-mykso-dev.yaml
new file mode 100644
index 00000000..a6c5f830
--- /dev/null
+++ b/examples/inheritance-test/rendered/argocd/mykso-dev/env-mykso-dev.yaml
@@ -0,0 +1,33 @@
+apiVersion: argoproj.io/v1alpha1
+kind: AppProject
+metadata:
+  name: env-mykso-dev
+  namespace: system-argocd
+  finalizers:
+  - resources-finalizer.argocd.argoproj.io
+spec:
+  description: Project for "mykso-dev" environment
+  clusterResourceWhitelist:
+  - group: '*'
+    kind: '*'
+  destinations:
+  - namespace: '*'
+    name: mykso-dev
+  namespaceResourceWhitelist:
+  - group: '*'
+    kind: '*'
+  sourceRepos:
+  - '*'
+---
+apiVersion: v1
+kind: Secret
+metadata:
+  labels:
+    argocd.argoproj.io/secret-type: cluster
+  name: mykso-dev
+  namespace: system-argocd
+stringData:
+  config: ARGOCD_CLUSTER_CONNECT_CONFIG
+  name: mykso-dev
+  project: env-mykso-dev
+  server: ARGOCD_CLUSTER_SERVER_URL
diff --git a/examples/inheritance-test/rendered/envs/mykso-dev/helm-installation/rendering-render-test.yaml b/examples/inheritance-test/rendered/envs/mykso-dev/helm-installation/rendering-render-test.yaml
new file mode 100644
index 00000000..f968b56d
--- /dev/null
+++ b/examples/inheritance-test/rendered/envs/mykso-dev/helm-installation/rendering-render-test.yaml
@@ -0,0 +1,13 @@
+kind: rendering
+metadata:
+  name: render-test
+outputYaml:
+  fromAppConfig: true
+  fromAppConfigAppData: true
+  fromChartDefaultValues: true
+  fromEnvGroup: true
+  fromEnvGroupAppData: true
+  fromPrototype: true
+  fromPrototypeAppData: true
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: true
diff --git a/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-app.yaml b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-app.yaml
new file mode 100644
index 00000000..b1e16575
--- /dev/null
+++ b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-app.yaml
@@ -0,0 +1,6 @@
+kind: rendering
+metadata:
+  name: app
+outputYaml:
+  fromAppConfig: true
+  fromAppConfigAppData: true
diff --git a/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-base.yaml b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-base.yaml
new file mode 100644
index 00000000..2be09b29
--- /dev/null
+++ b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-base.yaml
@@ -0,0 +1,6 @@
+kind: rendering
+metadata:
+  name: base
+outputYaml:
+  fromPrototype: true
+  fromPrototypeAppData: true
diff --git a/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-env-group.yaml b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-env-group.yaml
new file mode 100644
index 00000000..a1c5863b
--- /dev/null
+++ b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-env-group.yaml
@@ -0,0 +1,6 @@
+kind: rendering
+metadata:
+  name: env-group
+outputYaml:
+  fromEnvGroup: true
+  fromEnvGroupAppData: true
diff --git a/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-proto.yaml b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-proto.yaml
new file mode 100644
index 00000000..2fac5357
--- /dev/null
+++ b/examples/inheritance-test/rendered/envs/mykso-dev/ytt-installation/rendering-proto.yaml
@@ -0,0 +1,6 @@
+kind: rendering
+metadata:
+  name: proto
+outputYaml:
+  fromPrototypeOverride: true
+  fromPrototypeOverrideFromAppData: true
diff --git a/internal/integration/render_test.go b/internal/integration/render_test.go
index 6850d0be..e7ae0cc3 100644
--- a/internal/integration/render_test.go
+++ b/internal/integration/render_test.go
@@ -32,6 +32,9 @@ func findRepos(t *testing.T, basefolder string) []testRepo {
 		if !d.IsDir() {
 			continue
 		}
+		if d.Name() == "charts" {
+			continue
+		}
 		repos = append(repos, testRepo{
 			name: d.Name(),
 			dir:  filepath.Join(basefolder, d.Name()),
diff --git a/internal/myks/application.go b/internal/myks/application.go
index 115ed1a7..b196cd3b 100644
--- a/internal/myks/application.go
+++ b/internal/myks/application.go
@@ -5,6 +5,7 @@ import (
 	"fmt"
 	"io"
 	"path/filepath"
+	"strings"
 
 	"github.com/rs/zerolog/log"
 	yaml "gopkg.in/yaml.v3"
@@ -107,11 +108,11 @@ func (a *Application) Init() error {
 }
 
 func (a *Application) expandPath(path string) string {
-	return filepath.Join(a.e.Dir, "_apps", a.Name, path)
+	return filepath.Join(a.e.Dir, a.e.g.AppsDir, a.Name, path)
 }
 
 func (a *Application) expandServicePath(path string) string {
-	return filepath.Join(a.e.Dir, "_apps", a.Name, a.e.g.ServiceDirName, path)
+	return filepath.Join(a.e.Dir, a.e.g.AppsDir, a.Name, a.e.g.ServiceDirName, path)
 }
 
 func (a *Application) expandTempPath(path string) string {
@@ -135,7 +136,9 @@ func (a *Application) collectDataFiles() {
 		a.yttDataFiles = append(a.yttDataFiles, protoDataFile)
 	}
 
-	overrideDataFiles := a.e.collectBySubpath(filepath.Join("_apps", a.Name, a.e.g.ApplicationDataFileName))
+	protoOverrideDataFiles := a.e.collectBySubpath(filepath.Join(a.e.g.PrototypeOverrideDir, a.prototypeDirName(), a.e.g.ApplicationDataFileName))
+	a.yttDataFiles = append(a.yttDataFiles, protoOverrideDataFiles...)
+	overrideDataFiles := append(protoOverrideDataFiles, a.e.collectBySubpath(filepath.Join(a.e.g.AppsDir, a.Name, a.e.g.ApplicationDataFileName))...)
 	a.yttDataFiles = append(a.yttDataFiles, overrideDataFiles...)
 }
 
@@ -195,3 +198,7 @@ func (a *Application) yttS(step string, purpose string, paths []string, stdin io
 		log.Debug().Msg(a.Msg(step, msgRunCmd(purpose, name, args)))
 	}, args...)
 }
+
+func (a *Application) prototypeDirName() string {
+	return strings.TrimPrefix(a.Prototype, a.e.g.PrototypesDir+string(filepath.Separator))
+}
diff --git a/internal/myks/application_test.go b/internal/myks/application_test.go
index ea5f861a..20f9fce6 100644
--- a/internal/myks/application_test.go
+++ b/internal/myks/application_test.go
@@ -1,6 +1,7 @@
 package myks
 
 import (
+	"reflect"
 	"strings"
 	"testing"
 )
@@ -30,3 +31,20 @@ func TestApplication_renderDataYaml(t *testing.T) {
 		})
 	}
 }
+
+func TestApplication_prototypeDir(t *testing.T) {
+	tests := []struct {
+		name string
+		want string
+	}{
+		{"happy path", "test-app"},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			got := testApp.prototypeDirName()
+			if !reflect.DeepEqual(string(got), tt.want) {
+				t.Errorf("prototypeDir() got = %v, want %v", got, tt.want)
+			}
+		})
+	}
+}
diff --git a/internal/myks/globe.go b/internal/myks/globe.go
index 68a1b71c..9ac84f3e 100644
--- a/internal/myks/globe.go
+++ b/internal/myks/globe.go
@@ -20,6 +20,10 @@ const GlobalLogFormat = "\033[1m[global]\033[0m %s"
 type Globe struct {
 	/// Globe configuration
 
+	// Directory of application-specific configuration
+	AppsDir string `default:"_apps"`
+	// Directory of application-specific prototype overwrites
+	PrototypeOverrideDir string `default:"_proto"`
 	// Base directory for environments
 	EnvironmentBaseDir string `default:"envs"`
 	// Main branch name
diff --git a/internal/myks/plugin_argocd.go b/internal/myks/plugin_argocd.go
index 4decf040..00b4478c 100644
--- a/internal/myks/plugin_argocd.go
+++ b/internal/myks/plugin_argocd.go
@@ -85,7 +85,7 @@ func (a *Application) renderArgoCD() (err error) {
 	// 4. Collection of environment argocd-specific data values and schemas, and overlays
 	yttFiles = append(yttFiles, a.e.collectBySubpath(filepath.Join("_env", a.e.g.ArgoCDDataDirName))...)
 	// 5. Collection of application argocd-specific data values and schemas, and overlays
-	yttFiles = append(yttFiles, a.e.collectBySubpath(filepath.Join("_apps", a.Name, a.e.g.ArgoCDDataDirName))...)
+	yttFiles = append(yttFiles, a.e.collectBySubpath(filepath.Join(a.e.g.AppsDir, a.Name, a.e.g.ArgoCDDataDirName))...)
 
 	res, err := a.yttS(
 		"argocd",
diff --git a/internal/myks/render.go b/internal/myks/render.go
index 66b6399d..bda7c78b 100644
--- a/internal/myks/render.go
+++ b/internal/myks/render.go
@@ -170,6 +170,7 @@ func (a *Application) prepareValuesFile(dirName string, resourceName string) (st
 
 	var valuesFiles []string
 
+	// add values file from base dir
 	prototypeValuesFile := filepath.Join(a.Prototype, valuesFileName)
 	if ok, err := isExist(prototypeValuesFile); err != nil {
 		return "", err
@@ -177,7 +178,11 @@ func (a *Application) prepareValuesFile(dirName string, resourceName string) (st
 		valuesFiles = append(valuesFiles, prototypeValuesFile)
 	}
 
-	valuesFiles = append(valuesFiles, a.e.collectBySubpath(filepath.Join("_apps", a.Name, valuesFileName))...)
+	// add prototype overwrites value file from env dir groups
+	valuesFiles = append(valuesFiles, a.e.collectBySubpath(filepath.Join(a.e.g.PrototypeOverrideDir, a.prototypeDirName(), valuesFileName))...)
+
+	// add application values file from env dir and groups
+	valuesFiles = append(valuesFiles, a.e.collectBySubpath(filepath.Join(a.e.g.AppsDir, a.Name, valuesFileName))...)
 
 	if len(valuesFiles) == 0 {
 		log.Debug().Str("resource", resourceName).Msg(a.Msg(renderStepName, "No values files found"))
diff --git a/internal/myks/render_test.go b/internal/myks/render_test.go
index 71f4a135..1bada2fe 100644
--- a/internal/myks/render_test.go
+++ b/internal/myks/render_test.go
@@ -5,13 +5,19 @@ import (
 	"testing"
 )
 
+var prototypeDir = "prototypes"
+
+var appName = "test-app"
+
 var testApp = &Application{
-	Name:      "",
-	Prototype: "",
+	Name:      appName,
+	Prototype: prototypeDir + "/" + appName,
 	e: &Environment{
 		Id: "test-env",
 		g: &Globe{
-			TempDirName: "/tmp",
+			TempDirName:   "/tmp",
+			PrototypesDir: prototypeDir,
+			AppsDir:       "_apps",
 		},
 		Dir: "/tmp",
 	},
@@ -69,7 +75,7 @@ func TestApplication_Render(t *testing.T) {
 					renderedYaml: "step: Two",
 				},
 			},
-			want:     "/tmp/_apps/tmp/steps/01-test-template-2.yaml",
+			want:     "/tmp/_apps/" + appName + "/tmp/steps/01-test-template-2.yaml",
 			wantYaml: "step: One\n---\nstep: Two",
 			wantErr:  false,
 		},
@@ -89,7 +95,7 @@ func TestApplication_Render(t *testing.T) {
 					renderedYaml: "step: Two",
 				},
 			},
-			want:     "/tmp/_apps/tmp/steps/01-test-template-2.yaml",
+			want:     "/tmp/_apps/" + appName + "/tmp/steps/01-test-template-2.yaml",
 			wantYaml: "step: Two",
 			wantErr:  false,
 		},
diff --git a/internal/myks/render_ytt.go b/internal/myks/render_ytt.go
index 05b00a62..721489db 100644
--- a/internal/myks/render_ytt.go
+++ b/internal/myks/render_ytt.go
@@ -23,12 +23,18 @@ func (y *Ytt) Ident() string {
 
 func (y *Ytt) Render(previousStepFile string) (string, error) {
 	var yttFiles []string
+
+	// add environment, prototype, and application data files
 	yttFiles = append(yttFiles, y.app.yttDataFiles...)
 
+	// if yamls were rendered during the last step, we might want to modify them during this step
+	// therefore, add them as well
 	if previousStepFile != "" {
 		yttFiles = append(yttFiles, previousStepFile)
 	}
 
+	// we might have vendored some yamls or json files that we want to transform during this step
+	// therefore, add them as well
 	vendorYttDir := y.app.expandPath(filepath.Join(y.app.e.g.VendorDirName, y.app.e.g.YttStepDirName))
 	if ok, err := isExist(vendorYttDir); err != nil {
 		return "", err
@@ -36,6 +42,7 @@ func (y *Ytt) Render(previousStepFile string) (string, error) {
 		yttFiles = append(yttFiles, vendorYttDir)
 	}
 
+	// we obviously want to add the ytt files from the prototype dir
 	prototypeYttDir := filepath.Join(y.app.Prototype, y.app.e.g.YttStepDirName)
 	if ok, err := isExist(prototypeYttDir); err != nil {
 		return "", err
@@ -43,7 +50,13 @@ func (y *Ytt) Render(previousStepFile string) (string, error) {
 		yttFiles = append(yttFiles, prototypeYttDir)
 	}
 
-	yttFiles = append(yttFiles, y.app.e.collectBySubpath(filepath.Join("_apps", y.app.Name, y.app.e.g.YttStepDirName))...)
+	// we might have some prototype overwrites in the environment group folders.
+	// let's iterate over the environment directory structure and add them
+	// these should follow the structure and naming using in the prototypes directory
+	yttFiles = append(yttFiles, collectBySubpath(y.app.e.g.RootDir, y.app.e.Dir, filepath.Join(y.app.e.g.PrototypeOverrideDir, y.app.prototypeDirName(), y.app.e.g.YttStepDirName))...)
+
+	// finally, lets add the ytt directories from the application directory and the environment group folders
+	yttFiles = append(yttFiles, collectBySubpath(y.app.e.g.RootDir, y.app.e.Dir, filepath.Join(y.app.e.g.AppsDir, y.app.Name, y.app.e.g.YttStepDirName))...)
 
 	if len(yttFiles) == 0 {
 		log.Debug().Msg(y.app.Msg(yttStepName, "No local ytt directory found"))
diff --git a/internal/myks/smart_mode.go b/internal/myks/smart_mode.go
index 66c45163..3e20c63c 100644
--- a/internal/myks/smart_mode.go
+++ b/internal/myks/smart_mode.go
@@ -83,8 +83,8 @@ func (g *Globe) runSmartMode(changedFiles ChangedFiles) EnvAppMap {
 		},
 		// Env path and app name are the submatches
 		"app": {
-			e("(" + g.EnvironmentBaseDir + ".*)/_apps/([^/]+)/" + pluginsPattern + "/.*"),
-			e("(" + g.EnvironmentBaseDir + ".*)/_apps/([^/]+)/" + g.ApplicationDataFileName),
+			e("(" + g.EnvironmentBaseDir + ".*)/" + g.AppsDir + "/([^/]+)/" + pluginsPattern + "/.*"),
+			e("(" + g.EnvironmentBaseDir + ".*)/" + g.AppsDir + "/([^/]+)/" + g.ApplicationDataFileName),
 		},
 	}
 
diff --git a/internal/myks/sync.go b/internal/myks/sync.go
index 0d9ae2ad..e1d4159e 100644
--- a/internal/myks/sync.go
+++ b/internal/myks/sync.go
@@ -44,7 +44,7 @@ func (a *Application) prepareSync() error {
 		yttFiles = append(yttFiles, protoVendirDir)
 	}
 
-	appVendirDirs := a.e.collectBySubpath(filepath.Join("_apps", a.Name, "vendir"))
+	appVendirDirs := a.e.collectBySubpath(filepath.Join(a.e.g.AppsDir, a.Name, "vendir"))
 	yttFiles = append(yttFiles, appVendirDirs...)
 
 	if len(yttFiles) == 0 {
@@ -106,9 +106,15 @@ func (a *Application) doSync(vendirSecrets string) error {
 		return err
 	}
 
+	exist, err := isExist(vendorDir)
+	if err != nil {
+		log.Error().Err(err).Msg(a.Msg(syncStepName, "Unable to check if vendor dir exists"))
+		return err
+	}
+
 	// TODO sync retry
 	// only sync vendir with directory flag, if the lock file matches the vendir config file and caching is enabled
-	if a.useCache && checkLockFileMatch(vendirDirHashes, lockFileDirHashes) {
+	if exist && a.useCache && checkLockFileMatch(vendirDirHashes, lockFileDirHashes) {
 		for dir, hash := range vendirDirHashes {
 			if checkVersionMatch(dir, hash, syncFileDirHashes) {
 				log.Info().Str("vendir dir", dir).Msg(a.Msg(syncStepName, "Resource already synced"))
diff --git a/internal/myks/util.go b/internal/myks/util.go
index d6958d85..cc9ea528 100644
--- a/internal/myks/util.go
+++ b/internal/myks/util.go
@@ -320,3 +320,18 @@ func isExist(path string) (bool, error) {
 	log.Error().Err(err).Msg("Unable to stat file")
 	return false, err
 }
+
+func collectBySubpath(rootDir string, targetDir string, subpath string) []string {
+	items := []string{}
+	currentPath := rootDir
+	levels := []string{""}
+	levels = append(levels, strings.Split(targetDir, filepath.FromSlash("/"))...)
+	for _, level := range levels {
+		currentPath = filepath.Join(currentPath, level)
+		item := filepath.Join(currentPath, subpath)
+		if _, err := os.Stat(item); err == nil {
+			items = append(items, item)
+		}
+	}
+	return items
+}