diff --git a/airbyte_cdk/sources/declarative/interpolation/jinja.py b/airbyte_cdk/sources/declarative/interpolation/jinja.py
index 558ee0add..415a0c857 100644
--- a/airbyte_cdk/sources/declarative/interpolation/jinja.py
+++ b/airbyte_cdk/sources/declarative/interpolation/jinja.py
@@ -124,8 +124,8 @@ def eval(
 
     def _literal_eval(self, result: Optional[str], valid_types: Optional[Tuple[Type[Any]]]) -> Any:
         try:
-            evaluated = ast.literal_eval(result)  # type: ignore # literal_eval is able to handle None
-        except (ValueError, SyntaxError):
+            evaluated = ast.literal_eval(result)  # type: ignore # result may be None; on error we return it unchanged
+        except (ValueError, SyntaxError, TypeError):
             return result
         if (not valid_types and not isinstance(evaluated, complex)) or (
             valid_types and isinstance(evaluated, valid_types)
diff --git a/unit_tests/sources/declarative/interpolation/test_jinja.py b/unit_tests/sources/declarative/interpolation/test_jinja.py
index 330c938b0..c358fe4aa 100644
--- a/unit_tests/sources/declarative/interpolation/test_jinja.py
+++ b/unit_tests/sources/declarative/interpolation/test_jinja.py
@@ -345,6 +345,16 @@ def test_interpolation_private_partition_attribute():
     assert actual_output == expected_output
 
 
+def test_literal_eval_handles_unhashable_set_typeerror():
+    """Test that _literal_eval gracefully handles TypeError from ast.literal_eval for nested sets."""
+    # ast.literal_eval("{{'web'}, {'discover'}}") raises TypeError: unhashable type: 'set'
+    # The interpolation should return the string as-is instead of propagating the error.
+    config = {"query": "{{'web'}, {'discover'}}"}
+    s = "{{ config['query'] }}"
+    val = interpolation.eval(s, config)
+    assert val == "{{'web'}, {'discover'}}"
+
+
 def test_given_complex_when_eval_then_return_string():
     s = "9173710294242221J"
     config = {}