diff --git a/src/Moq/AmbientObserver.cs b/src/Moq/AmbientObserver.cs
index 99ce144b9..3cd6424b5 100644
--- a/src/Moq/AmbientObserver.cs
+++ b/src/Moq/AmbientObserver.cs
@@ -31,21 +31,36 @@ namespace Moq
 	internal sealed class AmbientObserver : IDisposable
 	{
 		[ThreadStatic]
-		private static AmbientObserver current;
+		private static Stack<AmbientObserver> activations;
 
 		public static AmbientObserver Activate()
 		{
-			Debug.Assert(current == null);
+			var activation = new AmbientObserver();
 
-			return current = new AmbientObserver();
+			var activations = AmbientObserver.activations;
+			if (activations == null)
+			{
+				AmbientObserver.activations = activations = new Stack<AmbientObserver>();
+			}
+			activations.Push(activation);
+
+			return activation;
 		}
 
 		public static bool IsActive(out AmbientObserver observer)
 		{
-			var current = AmbientObserver.current;
+			var activations = AmbientObserver.activations;
 
-			observer = current;
-			return current != null;
+			if (activations != null && activations.Count > 0)
+			{
+				observer = activations.Peek();
+				return true;
+			}
+			else
+			{
+				observer = null;
+				return false;
+			}
 		}
 
 		private List<Observation> observations;
@@ -64,7 +79,9 @@ public void Dispose()
 				}
 			}
 
-			current = null;
+			var activations = AmbientObserver.activations;
+			Debug.Assert(activations != null && activations.Count > 0);
+			activations.Pop();
 		}
 
 		/// <summary>
diff --git a/tests/Moq.Tests/AmbientObserverFixture.cs b/tests/Moq.Tests/AmbientObserverFixture.cs
index 871927381..034757d3a 100644
--- a/tests/Moq.Tests/AmbientObserverFixture.cs
+++ b/tests/Moq.Tests/AmbientObserverFixture.cs
@@ -7,6 +7,63 @@ namespace Moq.Tests
 {
 	public class AmbientObserverFixture
 	{
+		[Fact]
+		public void Activations_can_be_nested()
+		{
+			Assert.False(AmbientObserver.IsActive(out var active));
+			using (var outer = AmbientObserver.Activate())
+			{
+				Assert.True(AmbientObserver.IsActive(out active));
+				Assert.Same(outer, active);
+				using (var inner = AmbientObserver.Activate())
+				{
+					Assert.True(AmbientObserver.IsActive(out active));
+					Assert.Same(inner, active);
+				}
+				Assert.True(AmbientObserver.IsActive(out active));
+				Assert.Same(outer, active);
+			}
+			Assert.False(AmbientObserver.IsActive(out active));
+		}
+
+		[Fact]
+		public void Nested_observers_do_not_share_their_observations()
+		{
+			using (var outer = AmbientObserver.Activate())
+			{
+				_ = CreateMatch();
+				Assert.True(outer.LastIsMatch(out var outerLastMatchBeforeInner));
+				using (var inner = AmbientObserver.Activate())
+				{
+					// The inner observer should not see the outer observer's match:
+					Assert.False(inner.LastIsMatch(out _));
+					_ = CreateMatch();
+				}
+				// And the outer observer should not see the (disposed) inner observer's match.
+				// Instead, it should still see the same match as the last one as before `inner`:
+				Assert.True(outer.LastIsMatch(out var outerLastMatchAfterInnerDisposed));
+				Assert.Same(outerLastMatchBeforeInner, outerLastMatchAfterInnerDisposed);
+			}
+		}
+
+		[Fact]
+		public void Nested_observers_when_disposed_dont_interrupt_outer_observers()
+		{
+			using (var outer = AmbientObserver.Activate())
+			{
+				using (var inner = AmbientObserver.Activate())
+				{
+				}
+				_ = CreateMatch();
+				Assert.True(outer.LastIsMatch(out var match));
+			}
+		}
+
+		private int CreateMatch()
+		{
+			return Match.Create<int>(i => i != 0, () => It.Is<int>(i => i != 0));
+		}
+
 		[Fact]
 		public void IsActive_returns_false_when_no_AmbientObserver_instantiated()
 		{