diff --git a/fortls/parsers/internal/parser.py b/fortls/parsers/internal/parser.py
index bef50dd0..5095a6d4 100644
--- a/fortls/parsers/internal/parser.py
+++ b/fortls/parsers/internal/parser.py
@@ -2209,9 +2209,10 @@ def append_multiline_macro(def_value: str | tuple, line: str):
                 elif exc_continue:
                     log.debug("%s !!! Conditional EXCLUDED(%d)", line.strip(), i + 1)
             continue
+        stack_is_true = all(scope[0] < 0 for scope in pp_stack)
         # Handle variable/macro definitions files
         match = FRegex.PP_DEF.match(line)
-        if (match is not None) and ((len(pp_stack) == 0) or (pp_stack[-1][0] < 0)):
+        if (match is not None) and stack_is_true:
             output_file.append(line)
             pp_defines.append(i + 1)
             def_name = match.group(2)
@@ -2246,7 +2247,7 @@ def append_multiline_macro(def_value: str | tuple, line: str):
             continue
         # Handle include files
         match = FRegex.PP_INCLUDE.match(line)
-        if (match is not None) and ((len(pp_stack) == 0) or (pp_stack[-1][0] < 0)):
+        if (match is not None) and stack_is_true:
             log.debug("%s !!! Include statement(%d)", line.strip(), i + 1)
             include_filename = match.group(1).replace('"', "")
             include_path = None
diff --git a/test/test_preproc.py b/test/test_preproc.py
index 15b26026..0a618926 100644
--- a/test/test_preproc.py
+++ b/test/test_preproc.py
@@ -42,6 +42,8 @@ def check_return(result_array, checks):
     string += hover_req(file_path, 30, 23)
     file_path = root_dir / "preproc_if_elif_skip.F90"
     string += hover_req(file_path, 30, 23)
+    file_path = root_dir / "preproc_if_nested.F90"
+    string += hover_req(file_path, 33, 23)
     config = str(root_dir / ".pp_conf.json")
     errcode, results = run_request(string, ["--config", config])
     assert errcode == 0
@@ -68,6 +70,7 @@ def check_return(result_array, checks):
         "```fortran90\nINTEGER, PARAMETER :: res = 0+1+0+0\n```",
         "```fortran90\nINTEGER, PARAMETER :: res = 0+0+0+1\n```",
         "```fortran90\nINTEGER, PARAMETER :: res = 1+0+0+0\n```",
+        "```fortran90\nINTEGER, PARAMETER :: res = 0+0+1+0\n```",
     )
     assert len(ref_results) == len(results) - 1
     check_return(results[1:], ref_results)
diff --git a/test/test_source/pp/preproc_if_nested.F90 b/test/test_source/pp/preproc_if_nested.F90
new file mode 100644
index 00000000..5d4795d2
--- /dev/null
+++ b/test/test_source/pp/preproc_if_nested.F90
@@ -0,0 +1,36 @@
+subroutine preprocessor_if_nested()
+
+! This file, as used in test_preproc, tests that when there are nested
+! if-else preprocessor blocks, only the branches are used where ALL
+! statements leading to the definition evaluate to true.
+
+#if 0
+#if 1
+#define PART1 1
+#else
+#define PART2 1
+#endif
+#else
+#if 1
+#define PART3 1
+#else
+#define PART4 1
+#endif
+#endif
+
+#ifndef PART1
+#define PART1 0
+#endif
+#ifndef PART2
+#define PART2 0
+#endif
+#ifndef PART3
+#define PART3 0
+#endif
+#ifndef PART4
+#define PART4 0
+#endif
+
+integer, parameter :: res = PART1+PART2+PART3+PART4
+
+endsubroutine preprocessor_if_nested