diff --git a/CHANGES.md b/CHANGES.md
index ce033171a8..149fc49f05 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -130,6 +130,7 @@
 - Fix internal error on layer prev/next sibling selection (by @jsdevninja) [Github #9003](https://github.com/penpot/penpot/issues/9003)
 - Fix tooltip appearing two times when nested elements [Github #9031](https://github.com/penpot/penpot/issues/9031)
 - Fix broken update library notification link in the UI [Github #9070](https://github.com/penpot/penpot/issues/9070)
+- Fix plugin API `ShapeBase.component()` returning the outermost component instead of the immediate component in case of nested component instances [Github #9183](https://github.com/penpot/penpot/issues/9183)
 
 ## 2.15.0 (Unreleased)
 
diff --git a/frontend/src/app/plugins/shape.cljs b/frontend/src/app/plugins/shape.cljs
index da09c90ea8..63037e405c 100644
--- a/frontend/src/app/plugins/shape.cljs
+++ b/frontend/src/app/plugins/shape.cljs
@@ -1186,8 +1186,8 @@
              (let [objects (u/locate-objects file-id page-id)
                    shape (u/locate-shape file-id page-id id)]
                (when (ctn/in-any-component? objects shape)
-                 (let [[root component] (u/locate-component objects shape)]
-                   (lib-component-proxy plugin-id (:component-file root) (:id component))))))
+                 (when-let [[head component] (u/locate-head-component objects shape)]
+                   (lib-component-proxy plugin-id (:component-file head) (:id component))))))
 
            :detach
            (fn []
diff --git a/frontend/src/app/plugins/utils.cljs b/frontend/src/app/plugins/utils.cljs
index 19de73fcde..81dfb6cb82 100644
--- a/frontend/src/app/plugins/utils.cljs
+++ b/frontend/src/app/plugins/utils.cljs
@@ -100,6 +100,17 @@
         root            (ctn/get-instance-root objects shape)]
     [root (ctf/resolve-component root file libraries {:include-deleted? true})]))
 
+(defn locate-head-component
+  "Like locate-component but resolves via the nearest component head
+  instead of the outermost instance root."
+  [objects shape]
+  (let [state           (deref st/state)
+        file            (dsh/lookup-file state)
+        libraries       (dsh/lookup-libraries state)
+        head            (ctn/get-head-shape objects shape)]
+    (when head
+      [head (ctf/resolve-component head file libraries {:include-deleted? true})])))
+
 (defn proxy->file
   [proxy]
   (let [id (obj/get proxy "$id")]