diff --git a/.changeset/lazy-suns-end.md b/.changeset/lazy-suns-end.md
new file mode 100644
index 0000000000..f3dd93c720
--- /dev/null
+++ b/.changeset/lazy-suns-end.md
@@ -0,0 +1,5 @@
+---
+'@urql/exchange-populate': patch
+---
+
+Fix the scenario where we traverse a query but end up in a nested fragment, this maks it so that we can't derive the type for the sub-entity
diff --git a/exchanges/populate/src/populateExchange.test.ts b/exchanges/populate/src/populateExchange.test.ts
index 30321c387a..0a631188ec 100644
--- a/exchanges/populate/src/populateExchange.test.ts
+++ b/exchanges/populate/src/populateExchange.test.ts
@@ -648,6 +648,75 @@ describe('interface returned in mutation', () => {
   });
 });
 
+describe('nested fragment', () => {
+  const fragment = gql`
+    fragment TodoFragment on Todo {
+      id
+      author {
+        id
+      }
+    }
+  `;
+
+  const queryOp = makeOperation(
+    'query',
+    {
+      key: 1234,
+      query: gql`
+        query {
+          todos {
+            ...TodoFragment
+          }
+        }
+
+        ${fragment}
+      `,
+    },
+    context
+  );
+
+  const mutationOp = makeOperation(
+    'mutation',
+    {
+      key: 5678,
+      query: gql`
+        mutation MyMutation {
+          updateTodo @populate
+        }
+      `,
+    },
+    context
+  );
+
+  it('should work with nested fragments', () => {
+    const response = pipe<Operation, any, Operation[]>(
+      fromArray([queryOp, mutationOp]),
+      populateExchange({ schema })(exchangeArgs),
+      toArray
+    );
+
+    expect(print(response[1].query)).toMatchInlineSnapshot(`
+    "mutation MyMutation {
+      updateTodo {
+        ...Todo_PopulateFragment_0
+      }
+    }
+
+    fragment Todo_PopulateFragment_0 on Todo {
+      ...TodoFragment
+    }
+
+    fragment TodoFragment on Todo {
+      id
+      author {
+        id
+      }
+    }
+    "
+  `);
+  });
+});
+
 describe('nested interfaces', () => {
   const queryOp = makeOperation(
     'query',
diff --git a/exchanges/populate/src/populateExchange.ts b/exchanges/populate/src/populateExchange.ts
index 26009717ea..32ccad60db 100644
--- a/exchanges/populate/src/populateExchange.ts
+++ b/exchanges/populate/src/populateExchange.ts
@@ -176,13 +176,19 @@ export const extractSelectionsFromQuery = (
   };
 
   const visits: string[] = [];
+  let insideFragment = false;
 
   traverse(
     query,
     node => {
       if (node.kind === Kind.FRAGMENT_DEFINITION) {
+        insideFragment = true;
         extractedFragments.push(node);
-      } else if (node.kind === Kind.FIELD && node.selectionSet) {
+      } else if (
+        node.kind === Kind.FIELD &&
+        node.selectionSet &&
+        !insideFragment
+      ) {
         const type = unwrapType(
           resolveFields(schema, visits)[node.name.value].type
         );
@@ -219,7 +225,13 @@ export const extractSelectionsFromQuery = (
       }
     },
     node => {
-      if (node.kind === Kind.FIELD && node.selectionSet) visits.pop();
+      if (node.kind === Kind.FIELD && node.selectionSet && !insideFragment) {
+        visits.pop();
+      }
+
+      if (node.kind === Kind.FRAGMENT_DEFINITION) {
+        insideFragment = false;
+      }
     }
   );