diff --git a/integration-tests/main/src/test/java/io/quarkus/it/main/QuarkusTestNestedTestCase.java b/integration-tests/main/src/test/java/io/quarkus/it/main/QuarkusTestNestedTestCase.java
index 30bb5e2fc1430..fffde15d1638f 100644
--- a/integration-tests/main/src/test/java/io/quarkus/it/main/QuarkusTestNestedTestCase.java
+++ b/integration-tests/main/src/test/java/io/quarkus/it/main/QuarkusTestNestedTestCase.java
@@ -33,6 +33,10 @@ public class QuarkusTestNestedTestCase {
     private static final AtomicInteger COUNT_TEST = new AtomicInteger(0);
     private static final AtomicInteger COUNT_AFTER_EACH = new AtomicInteger(0);
     private static final AtomicInteger COUNT_AFTER_ALL = new AtomicInteger(0);
+    private static final String EXPECTED_OUTER_VALUE = "set from outer";
+    private static final String EXPECTED_INNER_VALUE = "set from inner";
+
+    String outerValue;
 
     @BeforeAll
     static void beforeAll() {
@@ -42,6 +46,7 @@ static void beforeAll() {
     @BeforeEach
     void beforeEach() {
         COUNT_BEFORE_EACH.incrementAndGet();
+        outerValue = EXPECTED_OUTER_VALUE;
     }
 
     @Test
@@ -57,9 +62,12 @@ void test() {
     @TestMethodOrder(OrderAnnotation.class)
     class FirstNested {
 
+        String innerValue;
+
         @BeforeEach
         void beforeEach() {
             COUNT_BEFORE_EACH.incrementAndGet();
+            innerValue = EXPECTED_INNER_VALUE;
         }
 
         @Test
@@ -82,6 +90,12 @@ void testTwo() {
             assertEquals(0, COUNT_AFTER_ALL.get(), "COUNT_AFTER_ALL");
         }
 
+        @Test
+        void testInnerAndOuterValues() {
+            assertEquals(EXPECTED_INNER_VALUE, innerValue);
+            assertEquals(EXPECTED_OUTER_VALUE, outerValue);
+        }
+
         @AfterEach
         void afterEach() {
             COUNT_AFTER_EACH.incrementAndGet();
@@ -119,9 +133,9 @@ void afterEach() {
     @AfterAll
     static void afterAll() {
         assertEquals(1, COUNT_BEFORE_ALL.get(), "COUNT_BEFORE_ALL");
-        assertEquals(7, COUNT_BEFORE_EACH.get(), "COUNT_BEFORE_EACH");
+        assertEquals(9, COUNT_BEFORE_EACH.get(), "COUNT_BEFORE_EACH");
         assertEquals(4, COUNT_TEST.get(), "COUNT_TEST");
-        assertEquals(7, COUNT_AFTER_EACH.get(), "COUNT_AFTER_EACH");
+        assertEquals(9, COUNT_AFTER_EACH.get(), "COUNT_AFTER_EACH");
         assertEquals(0, COUNT_AFTER_ALL.getAndIncrement(), "COUNT_AFTER_ALL");
     }
 }
diff --git a/test-framework/junit5/src/main/java/io/quarkus/test/junit/QuarkusTestExtension.java b/test-framework/junit5/src/main/java/io/quarkus/test/junit/QuarkusTestExtension.java
index 21f57216d9732..8ed792e08fd38 100644
--- a/test-framework/junit5/src/main/java/io/quarkus/test/junit/QuarkusTestExtension.java
+++ b/test-framework/junit5/src/main/java/io/quarkus/test/junit/QuarkusTestExtension.java
@@ -655,8 +655,7 @@ private void pushMockContext() {
             Method pushContext = runningQuarkusApplication.getClassLoader().loadClass(MockSupport.class.getName())
                     .getDeclaredMethod("pushContext");
             pushContext.setAccessible(true);
-            pushContext
-                    .invoke(null);
+            pushContext.invoke(null);
         } catch (Exception e) {
             throw new RuntimeException(e);
         }
@@ -668,8 +667,7 @@ private void popMockContext() {
             Method popContext = runningQuarkusApplication.getClassLoader().loadClass(MockSupport.class.getName())
                     .getDeclaredMethod("popContext");
             popContext.setAccessible(true);
-            popContext
-                    .invoke(null);
+            popContext.invoke(null);
         } catch (Exception e) {
             throw new RuntimeException(e);
         }
@@ -907,15 +905,17 @@ private Object runExtensionMethod(ReflectiveInvocationContext<Method> invocation
         try {
             Class<?> testClassFromTCCL = Class.forName(extensionContext.getRequiredTestClass().getName(), true,
                     Thread.currentThread().getContextClassLoader());
+            Object effectiveTestInstance = actualTestInstance;
             Method newMethod = determineTCCLExtensionMethod(invocationContext.getExecutable(), testClassFromTCCL);
-            boolean methodFromEnclosing = false;
             // this is needed to support before*** and after*** methods that are part of class that encloses the test class
             // (the test class is in this case a @Nested test)
-            if ((newMethod == null) && (testClassFromTCCL.getEnclosingClass() != null)) {
-                testClassFromTCCL = testClassFromTCCL.getEnclosingClass();
-                newMethod = determineTCCLExtensionMethod(invocationContext.getExecutable(), testClassFromTCCL);
-                methodFromEnclosing = true;
+            Class<?> enclosingClass = testClassFromTCCL.getEnclosingClass();
+            while (newMethod == null && enclosingClass != null) {
+                newMethod = determineTCCLExtensionMethod(invocationContext.getExecutable(), enclosingClass);
+                effectiveTestInstance = outerInstance;
+                enclosingClass = enclosingClass.getEnclosingClass();
             }
+
             if (newMethod == null) {
                 throw new RuntimeException("Could not find method " + invocationContext.getExecutable() + " on test class");
             }
@@ -988,12 +988,6 @@ private Object runExtensionMethod(ReflectiveInvocationContext<Method> invocation
                 }
             }
 
-            Object effectiveTestInstance = actualTestInstance;
-            if (methodFromEnclosing) {
-                // TODO: this is a little dodgy, ideally we would need to use the same constructor that was used for the original object
-                // but it's unlikely(?) we will run into this combo
-                effectiveTestInstance = testClassFromTCCL.getConstructor().newInstance();
-            }
             if (testMethodInvokerToUse != null) {
                 return testMethodInvokerToUse.getClass()
                         .getMethod("invoke", Object.class, Method.class, List.class, String.class)