diff --git a/CHANGELOG.md b/CHANGELOG.md
index f1e78ad..24955bc 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,11 @@ orchestration code; see each submodule's own `CHANGELOG.md`
 [sso-manager-node](https://github.com/theta42/sso-manager-node/blob/master/CHANGELOG.md))
 for what changed inside the apps it composes.
 
+## [v1.35.11] - 2026-08-04
+
+### Fixed
+- **`setup.sh` aborted with `UNSEAL_KEY: unbound variable` on re-runs** — when OpenBao was already unsealed, the unseal block was skipped and `UNSEAL_KEY` was never set, so the later `if [[ -n "$UNSEAL_KEY" ]]` crashed under `set -u`. Guarded with `${UNSEAL_KEY:-}`.
+
 ## [v1.35.10] - 2026-08-04
 
 ### Added
diff --git a/setup.sh b/setup.sh
index fed7d66..a3dad68 100755
--- a/setup.sh
+++ b/setup.sh
@@ -775,7 +775,9 @@ if [[ -z "$VAULT_TOKEN" ]]; then
 	die "Could not determine OpenBao VAULT_TOKEN from $CONFIG_DIR/bao-init.json or .env."
 fi
 
-if [[ -n "$UNSEAL_KEY" ]]; then
+# UNSEAL_KEY is only set when OpenBao needed unsealing this run; on a re-run of
+# an already-unsealed store it is unset, so guard with ${UNSEAL_KEY:-} (set -u).
+if [[ -n "${UNSEAL_KEY:-}" ]]; then
 	env_upsert VAULT_UNSEAL_KEY "$UNSEAL_KEY"
 fi
 env_upsert VAULT_TOKEN "$VAULT_TOKEN"