diff --git a/.changeset/few-dragons-retire.md b/.changeset/few-dragons-retire.md
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@@ -0,0 +1,28 @@
+---
+'@pandacss/generator': patch
+'@pandacss/studio': patch
+---
+
+Fix nested `styled` factory composition
+
+```tsx
+import { styled } from '../styled-system/jsx'
+
+const BasicBox = styled('div', { base: { fontSize: '10px' } })
+const ExtendedBox1 = styled(BasicBox, { base: { fontSize: '20px' } })
+const ExtendedBox2 = styled(ExtendedBox1, { base: { fontSize: '30px' } })
+
+export const App = () => {
+  return (
+    <>
+      {/* ✅ fs_10px */}
+      <BasicBox>text1</BasicBox>
+      {/* ✅ fs_20px */}
+      <ExtendedBox1>text2</ExtendedBox1>
+      {/* BEFORE: ❌ fs_10px fs_30px */}
+      {/* NOW: ✅ fs_30px */}
+      <ExtendedBox2>text3</ExtendedBox2>
+    </>
+  )
+}
+```