diff --git a/lib/compiler.js b/lib/compiler.js
index 92774d6..9e1ea5d 100644
--- a/lib/compiler.js
+++ b/lib/compiler.js
@@ -252,7 +252,7 @@
   function stringifySubstitutions(obj) {
     var items = [];
     for (var key in obj) {
-      items.push('"' + esc(key) + '": function(c,p,t,i) {' + obj[key] + '}');
+      items.push('"' + esc(key) + '": { f: function(c,p,t,i) {' + obj[key].code + '}, lvl:' + obj[key].lvl + ' }');
     }
     return "{ " + items.join(",") + " }";
   }
@@ -270,8 +270,10 @@
   }
 
   var serialNo = 0;
+  var lvl = 0;
   Hogan.generate = function(tree, text, options) {
     serialNo = 0;
+	lvl = 0;
     var context = { code: '', subs: {}, partials: {} };
     Hogan.walk(tree, context);
 
@@ -299,8 +301,10 @@
     for (key in template.partials) {
       template.partials[key] = this.makePartials(template.partials[key]);
     }
+	var sub;
     for (key in codeObj.subs) {
-      template.subs[key] = new Function('c', 'p', 't', 'i', codeObj.subs[key]);
+      sub = codeObj.subs[key];
+      template.subs[key] = { f: new Function('c', 'p', 't', 'i', sub.code), lvl:sub.lvl };
     }
     return template;
   }
@@ -352,8 +356,9 @@
 
     '$': function(node, context) {
       var ctx = {subs: {}, code: '', partials: context.partials, prefix: node.n};
+	  lvl++;
       Hogan.walk(node.nodes, ctx);
-      context.subs[node.n] = ctx.code;
+      context.subs[node.n] = { code: ctx.code, lvl: lvl-- };
       if (!context.inPartial) {
         context.code += 't.sub("' + esc(node.n) + '",c,p,i);';
       }
diff --git a/lib/template.js b/lib/template.js
index 14f396d..d38cbb5 100644
--- a/lib/template.js
+++ b/lib/template.js
@@ -250,7 +250,8 @@ var Hogan = {};
     },
 
     sub: function(name, context, partials, indent) {
-      var f = this.subs[name];
+      var sub = (this.subs[name]?this.subs[name]:undefined);
+      var f = (sub?sub.f:undefined);
       if (f) {
         this.activeSub = name;
         f(context, partials, this, indent);
@@ -293,10 +294,10 @@ var Hogan = {};
     partial.stackSubs = stackSubs;
     partial.subsText = stackText;
     for (key in subs) {
-      if (!stackSubs[key]) stackSubs[key] = subs[key];
+      if (!stackSubs[key] || stackSubs[key].lvl < subs[key].lvl) stackSubs[key] = subs[key];
     }
     for (key in stackSubs) {
-      partial.subs[key] = stackSubs[key];
+      partial.subs[key] = (subs[key] && subs[key].lvl > stackSubs[key].lvl)?subs[key]:stackSubs[key];
     }
 
     stackPartials = stackPartials || {};
diff --git a/test/index.js b/test/index.js
index ec0777e..a5d2082 100644
--- a/test/index.js
+++ b/test/index.js
@@ -927,6 +927,34 @@ test("Recursion in inherited templates", function() {
   is(s, "override override override don't recurse", "matches expected recursive output");
 });
 
+test("Overriden contents with nested inheritance", function() {
+  var child = Hogan.compile( '{{<parent}}{{$region}}a{{<parent}}{{$region}}b{{/region}}{{/parent}}{{/region}}{{/parent}}').render({}, {
+    parent: '...{{$region}}{{/region}}.'
+  });
+  
+  is(child, "...a...b..", "should render both contents");
+  
+  var child = Hogan.compile( '{{<parent}}{{$region}}a{{<parent}}{{$region}}b{{<parent}}{{$region}}c{{/region}}{{/parent}}{{/region}}{{/parent}}{{/region}}{{/parent}}').render({}, {
+    parent: '...{{$region}}{{/region}}.'
+  });		
+  is( child, "...a...b...c...", "should render the three nested contents" );
+});
+
+test( "Overriden contents with nested inheritance twice", function(){
+  var child = Hogan.compile( '{{<parent}}{{$region}}a{{<parent}}{{$region}}b{{/region}}{{/parent}}{{/region}}{{/parent}}|{{<parent}}{{$region}}c{{<parent}}{{$region}}d{{/region}}{{/parent}}{{/region}}{{/parent}}').render({}, {
+    parent: '...{{$region}}{{/region}}.'
+  });		
+  is( child, "...a...b..|...c...d..");
+});
+
+test( "Overriden contents with nested and multiple inheritance", function(){
+  var child = Hogan.compile( '{{<parent}}{{$region}}c{{<parent}}{{$region}}d{{/region}}{{/parent}}{{/region}}{{/parent}}').render({}, {
+    parent: '{{<grandParent}}{{$region}}a{{<grandParent}}{{$region}}b{{/region}}{{/grandParent}}{{/region}}{{/grandParent}}',
+    grandParent: '...{{$region}}{{/region}}.'
+  });	
+  is( child, "...c...d..");
+});	
+
 test("Cache contains old partials instances", function() {
   var tests = [{
     template: "{{<parent}}{{$a}}c{{/a}}{{/parent}}",