diff --git a/src/script_opt/ZAM/Driver.cc b/src/script_opt/ZAM/Driver.cc
index 4d6fc91f76..b44e094af2 100644
--- a/src/script_opt/ZAM/Driver.cc
+++ b/src/script_opt/ZAM/Driver.cc
@@ -261,7 +261,7 @@ void ZAMCompiler::ComputeLoopLevels()
 				// We're extending an existing loop.  Find
 				// its current end.
 				auto depth = t->loop_depth;
-				while ( j < i && insts1[j]->loop_depth == depth )
+				while ( j < i && insts1[j]->loop_depth >= depth )
 					++j;
 
 				ASSERT(insts1[j]->loop_depth == depth - 1);
diff --git a/testing/btest/Baseline/language.inlined-nested-loop/out b/testing/btest/Baseline/language.inlined-nested-loop/out
new file mode 100644
index 0000000000..a14b6e7b57
--- /dev/null
+++ b/testing/btest/Baseline/language.inlined-nested-loop/out
@@ -0,0 +1,2 @@
+### BTest baseline data generated by btest-diff. Do not edit. Use "btest -U/-u" to update. Requires BTest >= 0.63.
+I compiled and ran!
diff --git a/testing/btest/language/inlined-nested-loop.zeek b/testing/btest/language/inlined-nested-loop.zeek
new file mode 100644
index 0000000000..2e116afe21
--- /dev/null
+++ b/testing/btest/language/inlined-nested-loop.zeek
@@ -0,0 +1,24 @@
+# @TEST-EXEC: zeek -b %INPUT >out
+# @TEST-EXEC: btest-diff out
+
+# This used to lead to an assertion failure in the ZAM compiler due to
+# a bug in how it computed the lifetime of loops nested via inlining.
+
+function is_local(host: addr): bool
+	{
+	for ( local_net in set(10.0.0.0/8) )
+		if ( host in local_net )
+			return T;
+	return F;
+	}
+
+event zeek_init()
+	{
+        for ( host_addr in set(127.0.0.1) )
+                {
+                if ( is_local(host_addr) )
+                        next;
+                }
+
+	print "I compiled and ran!";
+	}