diff --git a/.changeset/great-groups-capture.md b/.changeset/great-groups-capture.md
new file mode 100644
index 0000000..7195743
--- /dev/null
+++ b/.changeset/great-groups-capture.md
@@ -0,0 +1,5 @@
+---
+"posthog-php": patch
+---
+
+Copy capture `groups` input to the `$groups` event property so grouped events are associated correctly.
diff --git a/lib/Client.php b/lib/Client.php
index 9c73f8e..7dccb58 100644
--- a/lib/Client.php
+++ b/lib/Client.php
@@ -295,6 +295,7 @@ public function capture(array $message)
     {
         $flagsSnapshot = $message["flags"] ?? null;
         unset($message["flags"]);
+        $hasGroups = array_key_exists("groups", $message);
 
         $usedGeneratedPersonlessDistinctId = false;
         if ($this->shouldApplyCaptureContext($message)) {
@@ -302,6 +303,10 @@ public function capture(array $message)
         }
         $message = $this->message($message);
 
+        if (!array_key_exists('$groups', $message) && $hasGroups) {
+            $message['$groups'] = $message['groups'];
+        }
+
         if (array_key_exists('$groups', $message)) {
             $message["properties"]['$groups'] = $message['$groups'];
         }
diff --git a/test/PostHogTest.php b/test/PostHogTest.php
index 264a280..a36dd30 100644
--- a/test/PostHogTest.php
+++ b/test/PostHogTest.php
@@ -58,6 +58,18 @@ private function getConsumer(Client $client): object
         return $consumerProp->getValue($client);
     }
 
+    private function firstBatchEvent(): array
+    {
+        foreach ($this->http_client->calls as $call) {
+            if (($call["path"] ?? null) === "/batch/") {
+                $decoded = json_decode($call["payload"], true);
+                return $decoded["batch"][0];
+            }
+        }
+
+        self::fail("Expected a /batch/ call to have been made");
+    }
+
     private function withEnvApiKey(?string $apiKey, callable $callback): void
     {
         $previousApiKey = getenv(PostHog::ENV_API_KEY);
@@ -96,6 +108,14 @@ public static function initNoOpApiKeyCases(): array
         ];
     }
 
+    public static function captureGroupsCases(): array
+    {
+        return [
+            'groups key' => ["groups"],
+            '$groups key' => ['$groups'],
+        ];
+    }
+
     public static function disabledClientNoRequestCases(): array
     {
         return [
@@ -499,6 +519,27 @@ public function testCapture(): void
         );
     }
 
+    /**
+     * @dataProvider captureGroupsCases
+     */
+    public function testCaptureAddsGroupsProperty(string $groupsKey): void
+    {
+        self::assertTrue(
+            PostHog::capture(
+                array(
+                    "distinctId" => "john",
+                    "event" => "grouped event",
+                    $groupsKey => array("team" => 1),
+                )
+            )
+        );
+        PostHog::flush();
+
+        $event = $this->firstBatchEvent();
+
+        self::assertSame(array("team" => 1), $event["properties"]['$groups']);
+    }
+
     public function testCaptureFlushesOnNextEnqueueAfterDefaultFlushInterval(): void
     {
         $mockClock = new MockClock(new \DateTimeImmutable('2022-05-01 00:00:00'));