diff --git a/src/core/analyzer.ts b/src/core/analyzer.ts
index 9e1f927..3390b15 100644
--- a/src/core/analyzer.ts
+++ b/src/core/analyzer.ts
@@ -25,9 +25,12 @@ function resolveVariables(
   path: string,
   variables: Map<string, string>,
 ): string {
+  // Match sentinel-wrapped names produced by extractPathFromNode for identifiers.
+  // Using \uE000 (Unicode private use) as sentinel ensures FastAPI path parameters
+  // like {id} are never substituted — only actual identifier references are resolved.
   return path.replace(
-    /\{([^}]+)\}/g,
-    (match, name) => variables.get(name) ?? match,
+    /\uE000([^\uE000]+)\uE000/g,
+    (_, name) => variables.get(name) ?? `{${name}}`,
   )
 }
 
diff --git a/src/core/extractors.ts b/src/core/extractors.ts
index 4fa8252..f269c9b 100644
--- a/src/core/extractors.ts
+++ b/src/core/extractors.ts
@@ -63,7 +63,7 @@ function collectNodesByType(node: Node, type: string, results: Node[]): void {
 
 /**
  * Collects string variable assignments from the AST for path resolution.
- * Only resolves simple assignments (e.g. `WEBHOOK_PATH = "/webhook"`).
+ * Handles simple assignments like `WEBHOOK_PATH = "/webhook"`.
  *
  * Examples:
  *   WEBHOOK_PATH = "/webhook"  -> Map { "WEBHOOK_PATH" => "/webhook" }
@@ -140,11 +140,13 @@ export function extractPathFromNode(node: Node): string {
         return extractPathFromNode(left) + extractPathFromNode(right)
       }
       // For other operators, just return the raw text
-      return `{${node.text}}`
+      return `\uE000${node.text}\uE000`
     }
     default:
-      // Dynamic values: variable, attribute access, or function call
-      return `{${node.text}}`
+      // Dynamic values: variable, attribute access, or function call.
+      // Use \uE000 (Unicode private use) as sentinel so resolveVariables can
+      // distinguish these from FastAPI path parameters like {id}.
+      return `\uE000${node.text}\uE000`
   }
 }
 
diff --git a/src/test/core/analyzer.test.ts b/src/test/core/analyzer.test.ts
index 16ad751..df572be 100644
--- a/src/test/core/analyzer.test.ts
+++ b/src/test/core/analyzer.test.ts
@@ -182,6 +182,35 @@ app.include_router(users.router, prefix=USERS_PREFIX)
       assert.strictEqual(result.includeRouters[0].prefix, "/users")
     })
 
+    test("does not substitute function-local variables into URL path parameters", () => {
+      const code = `
+from fastapi import APIRouter
+
+router = APIRouter()
+
+@router.get("/integrations/{integration}/authorize")
+def initiate_oauth_flow(integration: str):
+    integration = "redis"
+    pass
+
+@router.get("/integrations/{integration}/callback")
+def handle_callback(integration: str):
+    pass
+`
+      const tree = parse(code)
+      const result = analyzeTree(tree, "/test/file.py")
+
+      assert.strictEqual(result.routes.length, 2)
+      assert.strictEqual(
+        result.routes[0].path,
+        "/integrations/{integration}/authorize",
+      )
+      assert.strictEqual(
+        result.routes[1].path,
+        "/integrations/{integration}/callback",
+      )
+    })
+
     test("sets filePath correctly", () => {
       const code = "x = 1"
       const tree = parse(code)
diff --git a/src/test/core/extractors.test.ts b/src/test/core/extractors.test.ts
index 00d6212..bdce044 100644
--- a/src/test/core/extractors.test.ts
+++ b/src/test/core/extractors.test.ts
@@ -121,7 +121,7 @@ def handler():
       const result = decoratorExtractor(decoratedDefs[0])
 
       assert.ok(result)
-      assert.strictEqual(result.path, "{BASE_PATH}")
+      assert.strictEqual(result.path, "\uE000BASE_PATH\uE000")
     })
 
     test("handles dynamic path with attribute", () => {
@@ -138,7 +138,7 @@ def handler():
       const result = decoratorExtractor(decoratedDefs[0])
 
       assert.ok(result)
-      assert.strictEqual(result.path, "{settings.API_PREFIX}")
+      assert.strictEqual(result.path, "\uE000settings.API_PREFIX\uE000")
     })
 
     test("handles path concatenation", () => {
@@ -155,7 +155,7 @@ def handler():
       const result = decoratorExtractor(decoratedDefs[0])
 
       assert.ok(result)
-      assert.strictEqual(result.path, "{BASE}/users")
+      assert.strictEqual(result.path, "\uE000BASE\uE000/users")
     })
 
     test("returns null for simple decorator without call", () => {
@@ -405,7 +405,7 @@ def list_users():
       const result = routerExtractor(assignments[0])
 
       assert.ok(result)
-      assert.strictEqual(result.prefix, "{settings.API_PREFIX}")
+      assert.strictEqual(result.prefix, "\uE000settings.API_PREFIX\uE000")
     })
 
     test("returns null for non-router assignment", () => {
@@ -563,7 +563,7 @@ def list_users():
       const result = includeRouterExtractor(calls[0])
 
       assert.ok(result)
-      assert.strictEqual(result.prefix, "{settings.PREFIX}")
+      assert.strictEqual(result.prefix, "\uE000settings.PREFIX\uE000")
     })
 
     test("extracts include_router with tags", () => {
@@ -615,7 +615,7 @@ def list_users():
       const result = mountExtractor(calls[0])
 
       assert.ok(result)
-      assert.strictEqual(result.path, "{settings.STATIC_PATH}")
+      assert.strictEqual(result.path, "\uE000settings.STATIC_PATH\uE000")
     })
 
     test("returns null for non-mount call", () => {
@@ -652,7 +652,7 @@ def list_users():
       const tree = parse(code)
       const ops = findNodesByType(tree.rootNode, "binary_operator")
       const result = extractPathFromNode(ops[0])
-      assert.strictEqual(result, "{a - b}")
+      assert.strictEqual(result, "\uE000a - b\uE000")
     })
   })
 
@@ -688,7 +688,7 @@ def handler():
       const result = decoratorExtractor(decoratedDefs[0])
 
       assert.ok(result)
-      assert.strictEqual(result.path, "{get_path()}")
+      assert.strictEqual(result.path, "\uE000get_path()\uE000")
     })
   })
 })