diff --git a/changelog/55146.fixed.md b/changelog/55146.fixed.md
new file mode 100644
index 000000000000..6ff8a469768c
--- /dev/null
+++ b/changelog/55146.fixed.md
@@ -0,0 +1,2 @@
+Flatten yaml node lists to `L@` or `E@` before trying to do the ext_pillar parsing.
+For nested Nodegroups this is already done, but on the first level nodegroup a list will fail parsing as compound match.
diff --git a/salt/pillar/nodegroups.py b/salt/pillar/nodegroups.py
index 29642c4acf00..4a70c6d5de9e 100644
--- a/salt/pillar/nodegroups.py
+++ b/salt/pillar/nodegroups.py
@@ -35,7 +35,7 @@
 
 # Import futures
 
-from salt.utils.minions import CkMinions
+from salt.utils.minions import CkMinions, nodegroup_comp
 
 __version__ = "0.0.2"
 
@@ -56,6 +56,7 @@ def ext_pillar(minion_id, pillar, pillar_name=None):
     ckminions = None
     for nodegroup_name in all_nodegroups.keys():
         ckminions = ckminions or CkMinions(__opts__)
+        all_nodegroups[nodegroup_name] = nodegroup_comp(nodegroup_name, all_nodegroups)
         _res = ckminions.check_minions(all_nodegroups[nodegroup_name], "compound")
         match = _res["minions"]
 
diff --git a/tests/pytests/unit/pillar/test_nodegroups.py b/tests/pytests/unit/pillar/test_nodegroups.py
index 2c4d1bf24311..b4c65ce3208a 100644
--- a/tests/pytests/unit/pillar/test_nodegroups.py
+++ b/tests/pytests/unit/pillar/test_nodegroups.py
@@ -14,6 +14,7 @@ def fake_nodegroups(fake_minion_id):
     return {
         "groupA": fake_minion_id,
         "groupB": "another_minion_id",
+        "groupC": [fake_minion_id, "another_minion_id"],
     }
 
 
@@ -34,7 +35,9 @@ def configure_loader_modules(fake_minion_id, fake_nodegroups):
 
 def _runner(expected_ret, fake_minion_id, fake_pillar_name, pillar_name=None):
     def _side_effect(group_sel, t):
-        if group_sel.find(fake_minion_id) != -1:
+        if not isinstance(group_sel, list):
+            group_sel = [group_sel]
+        if any(x for x in group_sel if x.find(fake_minion_id) != -1):
             return {"minions": [fake_minion_id], "missing": []}
         return {"minions": ["another_minion_id"], "missing": []}
 
@@ -48,5 +51,5 @@ def _side_effect(group_sel, t):
 
 
 def test_succeeds(fake_pillar_name, fake_minion_id):
-    ret = {fake_pillar_name: ["groupA"]}
+    ret = {fake_pillar_name: ["groupA", "groupC"]}
     _runner(ret, fake_minion_id, fake_pillar_name)