diff --git a/lib/optimizely/config/datafile_project_config.rb b/lib/optimizely/config/datafile_project_config.rb
index d6f1d27b..b9e93450 100644
--- a/lib/optimizely/config/datafile_project_config.rb
+++ b/lib/optimizely/config/datafile_project_config.rb
@@ -196,16 +196,23 @@ def initialize(datafile, logger, error_handler)
         end
 
         flag_id = feature_flag['id']
-        applicable_holdouts = []
 
-        applicable_holdouts.concat(@included_holdouts[flag_id]) if @included_holdouts[flag_id]
-
-        @global_holdouts.each_value do |holdout|
-          excluded_flag_ids = holdout['excludedFlags'] || []
-          applicable_holdouts << holdout unless excluded_flag_ids.include?(flag_id)
+        # Prefer explicit holdouts (includedFlags) over global holdouts
+        # If multiple explicit holdouts exist, use the first one (deterministic based on datafile order)
+        applicable_holdout = @included_holdouts[flag_id]&.first
+
+        # Use first global holdout that doesn't exclude this flag if no explicit holdout
+        unless applicable_holdout
+          @global_holdouts.each_value do |holdout|
+            excluded_flag_ids = holdout['excludedFlags'] || []
+            unless excluded_flag_ids.include?(flag_id)
+              applicable_holdout = holdout
+              break
+            end
+          end
         end
 
-        @flag_holdouts_map[key] = applicable_holdouts unless applicable_holdouts.empty?
+        @flag_holdouts_map[key] = [applicable_holdout] if applicable_holdout
       end
 
       # Adding Holdout variations in variation id and key maps
diff --git a/spec/config/datafile_project_config_spec.rb b/spec/config/datafile_project_config_spec.rb
index 84dd4509..30ce340f 100644
--- a/spec/config/datafile_project_config_spec.rb
+++ b/spec/config/datafile_project_config_spec.rb
@@ -1249,17 +1249,18 @@
       expect(holdouts).to eq([])
     end
 
-    it 'should return global holdouts that do not exclude the flag' do
+    it 'should return only the most specific holdout for the flag' do
       holdouts = config_with_holdouts.get_holdouts_for_flag('multi_variate_feature')
-      expect(holdouts.length).to eq(3)
-
-      global_holdout = holdouts.find { |h| h['key'] == 'global_holdout' }
-      expect(global_holdout).not_to be_nil
-      expect(global_holdout['id']).to eq('holdout_1')
+      expect(holdouts.length).to eq(1)
 
+      # Should only return the explicit holdout (specific_holdout), not the global ones
       specific_holdout = holdouts.find { |h| h['key'] == 'specific_holdout' }
       expect(specific_holdout).not_to be_nil
       expect(specific_holdout['id']).to eq('holdout_2')
+
+      # Global holdout should NOT be included when explicit holdout exists
+      global_holdout = holdouts.find { |h| h['key'] == 'global_holdout' }
+      expect(global_holdout).to be_nil
     end
 
     it 'should not return global holdouts that exclude the flag' do
@@ -1274,14 +1275,14 @@
       holdouts1 = config_with_holdouts.get_holdouts_for_flag('multi_variate_feature')
       holdouts2 = config_with_holdouts.get_holdouts_for_flag('multi_variate_feature')
       expect(holdouts1).to equal(holdouts2)
-      expect(holdouts1.length).to eq(3)
+      expect(holdouts1.length).to eq(1)
     end
 
-    it 'should return only global holdouts for flags not specifically targeted' do
+    it 'should return only one global holdout for flags not specifically targeted' do
       holdouts = config_with_holdouts.get_holdouts_for_flag('string_single_variable_feature')
 
-      # Should only include global holdout (not excluded and no specific targeting)
-      expect(holdouts.length).to eq(2)
+      # Should only include one global holdout (not excluded and no specific targeting)
+      expect(holdouts.length).to eq(1)
       expect(holdouts.first['key']).to eq('global_holdout')
     end
   end