diff --git a/editors/sed.c b/editors/sed.c
index 302a15605..30ab8c9fb 100644
--- a/editors/sed.c
+++ b/editors/sed.c
@@ -936,7 +936,15 @@ static void process_files(void)
 		/* Skip blocks of commands we didn't match */
 		if (sed_cmd->cmd == '{') {
 			if (sed_cmd->invert ? matched : !matched) {
-				while (sed_cmd->cmd != '}') {
+				unsigned nest_cnt = 0;
+				while (1) {
+					if (sed_cmd->cmd == '{')
+						nest_cnt++;
+					if (sed_cmd->cmd == '}') {
+						nest_cnt--;
+						if (nest_cnt == 0)
+							break;
+					}
 					sed_cmd = sed_cmd->next;
 					if (!sed_cmd)
 						bb_error_msg_and_die("unterminated {");
diff --git a/testsuite/sed.tests b/testsuite/sed.tests
index f88524d07..b0de9657c 100755
--- a/testsuite/sed.tests
+++ b/testsuite/sed.tests
@@ -253,4 +253,9 @@ testing "sed c" \
 	"repl\nrepl\n" "" \
 	"first\nsecond\n"
 
+testing "sed nested {}s" \
+	"sed '/asd/ { p; /s/ { s/s/c/ }; p; q }'" \
+	"qwe\nasd\nacd\nacd\n" "" \
+	"qwe\nasd\nzxc\n"
+
 exit $FAILCOUNT