diff --git a/packages/runtime/src/enhancements/node/encryption.ts b/packages/runtime/src/enhancements/node/encryption.ts
index d5db6669..3d0f738d 100644
--- a/packages/runtime/src/enhancements/node/encryption.ts
+++ b/packages/runtime/src/enhancements/node/encryption.ts
@@ -138,21 +138,29 @@ class EncryptedHandler extends DefaultPrismaProxyHandler {
         const realModel = this.queryUtils.getDelegateConcreteModel(model, entityData);
 
         for (const field of getModelFields(entityData)) {
-            const fieldInfo = await resolveField(this.options.modelMeta, realModel, field);
+            // Don't decrypt null, undefined or empty string values
+            if (!entityData[field]) continue;
 
+            const fieldInfo = await resolveField(this.options.modelMeta, realModel, field);
             if (!fieldInfo) {
                 continue;
             }
 
-            const shouldDecrypt = fieldInfo.attributes?.find((attr) => attr.name === '@encrypted');
-            if (shouldDecrypt) {
-                // Don't decrypt null, undefined or empty string values
-                if (!entityData[field]) continue;
-
-                try {
-                    entityData[field] = await this.decrypt(fieldInfo, entityData[field]);
-                } catch (error) {
-                    this.logger.warn(`Decryption failed, keeping original value: ${error}`);
+            if (fieldInfo.isDataModel) {
+                const items =
+                    fieldInfo.isArray && Array.isArray(entityData[field]) ? entityData[field] : [entityData[field]];
+                for (const item of items) {
+                    // recurse
+                    await this.doPostProcess(item, fieldInfo.type);
+                }
+            } else {
+                const shouldDecrypt = fieldInfo.attributes?.find((attr) => attr.name === '@encrypted');
+                if (shouldDecrypt) {
+                    try {
+                        entityData[field] = await this.decrypt(fieldInfo, entityData[field]);
+                    } catch (error) {
+                        this.logger.warn(`Decryption failed, keeping original value: ${error}`);
+                    }
                 }
             }
         }
diff --git a/tests/integration/tests/enhancements/with-encrypted/with-encrypted.test.ts b/tests/integration/tests/enhancements/with-encrypted/with-encrypted.test.ts
index 9b630782..3f02c3f7 100644
--- a/tests/integration/tests/enhancements/with-encrypted/with-encrypted.test.ts
+++ b/tests/integration/tests/enhancements/with-encrypted/with-encrypted.test.ts
@@ -20,8 +20,6 @@ describe('Encrypted test', () => {
     model User {
         id String @id @default(cuid())
         encrypted_value String @encrypted()
-    
-        @@allow('all', true)
     }`,
             {
                 enhancements: ['encryption'],
@@ -62,6 +60,52 @@ describe('Encrypted test', () => {
         expect(rawRead.encrypted_value).not.toBe('abc123');
     });
 
+    it('Decrypts nested fields', async () => {
+        const { enhance, prisma } = await loadSchema(
+            `
+    model User {
+        id String @id @default(cuid())
+        posts Post[]
+    }
+    
+    model Post {
+        id String @id @default(cuid())
+        title String @encrypted()
+        author User @relation(fields: [authorId], references: [id])
+        authorId String
+    }
+    `,
+            {
+                enhancements: ['encryption'],
+                enhanceOptions: {
+                    encryption: { encryptionKey },
+                },
+            }
+        );
+
+        const db = enhance();
+
+        const create = await db.user.create({
+            data: {
+                id: '1',
+                posts: { create: { title: 'Post1' } },
+            },
+            include: { posts: true },
+        });
+        expect(create.posts[0].title).toBe('Post1');
+
+        const read = await db.user.findUnique({
+            where: {
+                id: '1',
+            },
+            include: { posts: true },
+        });
+        expect(read.posts[0].title).toBe('Post1');
+
+        const rawRead = await prisma.user.findUnique({ where: { id: '1' }, include: { posts: true } });
+        expect(rawRead.posts[0].title).not.toBe('Post1');
+    });
+
     it('Multi-field encryption test', async () => {
         const { enhance } = await loadSchema(
             `
@@ -69,8 +113,6 @@ describe('Encrypted test', () => {
         id String @id @default(cuid())
         x1 String @encrypted()
         x2 String @encrypted()
-    
-        @@allow('all', true)
     }`,
             {
                 enhancements: ['encryption'],
@@ -105,8 +147,6 @@ describe('Encrypted test', () => {
     model User {
         id String @id @default(cuid())
         encrypted_value String @encrypted()
-    
-        @@allow('all', true)
     }`);
 
         const sudoDb = enhance(undefined, { kinds: [] });
@@ -203,7 +243,6 @@ describe('Encrypted test', () => {
     model User {
         id String @id @default(cuid())
         encrypted_value String @encrypted() @length(0, 6)
-    
         @@allow('all', true)
     }`,
             {