diff --git a/distr/flecs.c b/distr/flecs.c
index bf47e83f5..e3887454d 100644
--- a/distr/flecs.c
+++ b/distr/flecs.c
@@ -14650,8 +14650,6 @@ void flecs_multi_observer_invoke(
         return;
     }
 
-    impl->last_event_id[0] = world->event_id;
-
     ecs_table_t *table = it->table;
     ecs_table_t *prev_table = it->other_table;
     int8_t pivot_term = it->term_index;
@@ -14704,6 +14702,8 @@ void flecs_multi_observer_invoke(
             }
         }
 
+        impl->last_event_id[0] = it->event_cur;
+
         /* Patch data from original iterator. If the observer query has 
          * wildcards which triggered the original event, the component id that
          * got matched by ecs_query_has_range may not be the same as the one
diff --git a/src/observer.c b/src/observer.c
index 4eb7433e7..5f071dea4 100644
--- a/src/observer.c
+++ b/src/observer.c
@@ -459,8 +459,6 @@ void flecs_multi_observer_invoke(
         return;
     }
 
-    impl->last_event_id[0] = world->event_id;
-
     ecs_table_t *table = it->table;
     ecs_table_t *prev_table = it->other_table;
     int8_t pivot_term = it->term_index;
@@ -513,6 +511,8 @@ void flecs_multi_observer_invoke(
             }
         }
 
+        impl->last_event_id[0] = it->event_cur;
+
         /* Patch data from original iterator. If the observer query has 
          * wildcards which triggered the original event, the component id that
          * got matched by ecs_query_has_range may not be the same as the one
diff --git a/test/core/project.json b/test/core/project.json
index 3b2436d1e..7bd3bb55d 100644
--- a/test/core/project.json
+++ b/test/core/project.json
@@ -1690,6 +1690,8 @@
                 "on_remove_multi_optional",
                 "on_add_multi_only_optional",
                 "on_remove_multi_only_optional",
+                "on_add_multi_observers_w_prefab_instance",
+                "on_add_overlapping_multi_observers_w_prefab_instance",
                 "cache_test_1",
                 "cache_test_2",
                 "cache_test_3",
diff --git a/test/core/src/Observer.c b/test/core/src/Observer.c
index ba78d3f98..cf6c547de 100644
--- a/test/core/src/Observer.c
+++ b/test/core/src/Observer.c
@@ -9612,3 +9612,98 @@ void Observer_on_remove_multi_only_optional(void) {
 
     ecs_fini(world);
 }
+
+void Observer_on_add_multi_observers_w_prefab_instance(void) {
+    ecs_world_t *world = ecs_mini();
+
+    ECS_COMPONENT(world, Position);
+    ECS_COMPONENT(world, Velocity);
+    ECS_COMPONENT(world, Mass);
+
+    Probe ctx = {0};
+
+    ecs_entity_t prefab = ecs_new_w_id(world, EcsPrefab);
+    ecs_add(world, prefab, Position);
+
+    ecs_observer(world, {
+        .query.terms = {{ ecs_id(Mass) }, { ecs_id(Velocity) }},
+        .events = { EcsOnAdd },
+        .callback = Observer
+    });
+
+
+    ecs_entity_t o = ecs_observer(world, {
+        .query.terms = {{ ecs_id(Position) }, { ecs_isa(prefab) }},
+        .events = { EcsOnAdd },
+        .callback = Observer,
+        .ctx = &ctx
+    });
+
+    ecs_entity_t child = ecs_new_w_pair(world, EcsChildOf, prefab);
+    ecs_add(world, child, Velocity);
+    ecs_add(world, child, Mass);
+    ecs_set_name(world, child, "child");
+    test_int(ctx.invoked, 0);
+
+    ecs_entity_t inst = ecs_new_w_pair(world, EcsIsA, prefab);
+    test_int(ctx.invoked, 1);
+    test_int(ctx.count, 1);
+    test_int(ctx.system, o);
+    test_int(ctx.event, EcsOnAdd);
+    test_uint(ctx.s[0][0], 0);
+
+    test_assert(ecs_has(world, inst, Position));
+    ecs_entity_t inst_child = ecs_lookup_from(world, inst, "child");
+    test_assert(inst_child != 0);
+    test_assert(ecs_has(world, inst_child, Velocity));
+    test_assert(ecs_has(world, inst_child, Mass));
+
+    ecs_fini(world);
+}
+
+void Observer_on_add_overlapping_multi_observers_w_prefab_instance(void) {
+    ecs_world_t *world = ecs_mini();
+
+    ECS_COMPONENT(world, Position);
+    ECS_COMPONENT(world, Velocity);
+
+    Probe ctx = {0};
+
+    ecs_entity_t prefab = ecs_new_w_id(world, EcsPrefab);
+    ecs_add(world, prefab, Position);
+
+    ecs_observer(world, {
+        .query.terms = {{ ecs_id(Position) }, { ecs_id(Velocity) }},
+        .events = { EcsOnAdd },
+        .callback = Observer
+    });
+
+
+    ecs_entity_t o = ecs_observer(world, {
+        .query.terms = {{ ecs_id(Position) }, { ecs_isa(prefab) }},
+        .events = { EcsOnAdd },
+        .callback = Observer,
+        .ctx = &ctx
+    });
+
+    ecs_entity_t child = ecs_new_w_pair(world, EcsChildOf, prefab);
+    ecs_add(world, child, Velocity);
+    ecs_add(world, child, Position);
+    ecs_set_name(world, child, "child");
+    test_int(ctx.invoked, 0);
+
+    ecs_entity_t inst = ecs_new_w_pair(world, EcsIsA, prefab);
+    test_int(ctx.invoked, 1);
+    test_int(ctx.count, 1);
+    test_int(ctx.system, o);
+    test_int(ctx.event, EcsOnAdd);
+    test_uint(ctx.s[0][0], 0);
+
+    test_assert(ecs_has(world, inst, Position));
+    ecs_entity_t inst_child = ecs_lookup_from(world, inst, "child");
+    test_assert(inst_child != 0);
+    test_assert(ecs_has(world, inst_child, Velocity));
+    test_assert(ecs_has(world, inst_child, Position));
+
+    ecs_fini(world);
+}
diff --git a/test/core/src/main.c b/test/core/src/main.c
index 956cb0439..edcd9d77d 100644
--- a/test/core/src/main.c
+++ b/test/core/src/main.c
@@ -1629,6 +1629,8 @@ void Observer_on_add_multi_optional(void);
 void Observer_on_remove_multi_optional(void);
 void Observer_on_add_multi_only_optional(void);
 void Observer_on_remove_multi_only_optional(void);
+void Observer_on_add_multi_observers_w_prefab_instance(void);
+void Observer_on_add_overlapping_multi_observers_w_prefab_instance(void);
 void Observer_cache_test_1(void);
 void Observer_cache_test_2(void);
 void Observer_cache_test_3(void);
@@ -8643,6 +8645,14 @@ bake_test_case Observer_testcases[] = {
         "on_remove_multi_only_optional",
         Observer_on_remove_multi_only_optional
     },
+    {
+        "on_add_multi_observers_w_prefab_instance",
+        Observer_on_add_multi_observers_w_prefab_instance
+    },
+    {
+        "on_add_overlapping_multi_observers_w_prefab_instance",
+        Observer_on_add_overlapping_multi_observers_w_prefab_instance
+    },
     {
         "cache_test_1",
         Observer_cache_test_1
@@ -11530,7 +11540,7 @@ static bake_test_suite suites[] = {
         "Observer",
         NULL,
         NULL,
-        229,
+        231,
         Observer_testcases
     },
     {