diff --git a/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/LambdaExpression.java b/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/LambdaExpression.java
index 0cf0f123d9c..ac702348165 100644
--- a/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/LambdaExpression.java
+++ b/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/LambdaExpression.java
@@ -47,6 +47,7 @@
 
 import static org.eclipse.jdt.internal.compiler.ast.ExpressionContext.INVOCATION_CONTEXT;
 
+import java.util.ArrayList;
 import java.util.HashMap;
 import java.util.LinkedHashSet;
 import java.util.List;
@@ -985,9 +986,7 @@ private LambdaExpression cachedResolvedCopy(TypeBinding targetType, boolean anyT
 					return null;
 
 				targetType = copy.expectedType; // possibly updated local types
-				if (this.copiesPerTargetType == null)
-					this.copiesPerTargetType = new HashMap<>();
-				this.copiesPerTargetType.put(targetType, copy);
+				this.copiesPerTargetType.put(targetType, copy); // copy() has linked this lambda to the original's cache
 			}
 			if (!requireExceptionAnalysis)
 				return copy;
@@ -1116,7 +1115,7 @@ LambdaExpression copy() {
 		if (copy != null) { // ==> syntax errors == null
 			if (copy.sourceStart != this.sourceStart || copy.sourceEnd != this.sourceEnd)
 				return null; // something wrong
-			copy.original = this;
+			shareInferenceCaches(copy);
 			copy.assistNode = this.assistNode;
 			copy.enclosingScope = this.enclosingScope;
 			copy.text = this.text; // discard redundant textual copy
@@ -1124,6 +1123,44 @@ LambdaExpression copy() {
 		return copy;
 	}
 
+	private void shareInferenceCaches(LambdaExpression copy) {
+		// A speculative copy can contain nested lambdas. Link each collected lambda to its
+		// original lambda and share the per-target inference cache.
+		// A cache entry is a resolved lambda copy and owns its parameter bindings. Nested
+		// lambdas may use parameters from an enclosing lambda, so collectLambdas() stops
+		// below a lambda with parameters. Caches below that point stay local to the
+		// enclosing copy.
+		// Both traversals start at the root and visit nested lambdas in source order.
+		List<LambdaExpression> sourceLambdas = collectLambdas(this);
+		List<LambdaExpression> copiedLambdas = collectLambdas(copy);
+		if (sourceLambdas.size() != copiedLambdas.size())
+			throw new CopyFailureException();
+		for (int i = 0; i < sourceLambdas.size(); i++) {
+			LambdaExpression sourceLambda = sourceLambdas.get(i);
+			LambdaExpression copiedLambda = copiedLambdas.get(i);
+			if (sourceLambda.sourceStart != copiedLambda.sourceStart || sourceLambda.sourceEnd != copiedLambda.sourceEnd)
+				throw new CopyFailureException();
+			LambdaExpression originalLambda = sourceLambda.original;
+			copiedLambda.original = originalLambda;
+			if (originalLambda.copiesPerTargetType == null)
+				originalLambda.copiesPerTargetType = new HashMap<>();
+			sourceLambda.copiesPerTargetType = originalLambda.copiesPerTargetType;
+			copiedLambda.copiesPerTargetType = originalLambda.copiesPerTargetType;
+		}
+	}
+
+	private static List<LambdaExpression> collectLambdas(LambdaExpression root) {
+		List<LambdaExpression> lambdas = new ArrayList<>();
+		root.traverse(new ASTVisitor() {
+			@Override
+			public boolean visit(LambdaExpression lambda, BlockScope skope) {
+				lambdas.add(lambda);
+				return lambda.arguments.length == 0; // nested lambdas may use these parameters
+			}
+		}, root.enclosingScope);
+		return lambdas;
+	}
+
 	public void returnsExpression(Expression expression, TypeBinding resultType) {
 		if (this.original == this) // Not in overload resolution context. result expressions not relevant.
 			return;
diff --git a/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/NestedLambdaInferenceTest.java b/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/NestedLambdaInferenceTest.java
new file mode 100644
index 00000000000..2ff384e13f0
--- /dev/null
+++ b/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/NestedLambdaInferenceTest.java
@@ -0,0 +1,128 @@
+/*******************************************************************************
+ * Copyright (c) 2026 François Martin and others.
+ *
+ * This program and the accompanying materials
+ * are made available under the terms of the Eclipse Public License 2.0
+ * which accompanies this distribution, and is available at
+ * https://www.eclipse.org/legal/epl-2.0/
+ *
+ * SPDX-License-Identifier: EPL-2.0
+ *
+ * Contributors:
+ *     François Martin - initial API and implementation
+ *******************************************************************************/
+package org.eclipse.jdt.core.tests.compiler.regression;
+
+import junit.framework.Test;
+
+public class NestedLambdaInferenceTest extends AbstractRegressionTest {
+	private static final int NESTING_DEPTH = 24;
+
+	public NestedLambdaInferenceTest(String name) {
+		super(name);
+	}
+
+	public static Test suite() {
+		return buildMinimalComplianceTestSuite(NestedLambdaInferenceTest.class, F_1_8);
+	}
+
+	// https://github.com/eclipse-jdt/eclipse.jdt.core/issues/5206
+	public void testIssue5206GenericRouteChain() {
+		runNestedLambdaTest("GenericRouteChain", """
+			<V extends Red> V route(Red marker, Work<V> work) { return null; }
+			<V extends Blue> V route(Blue marker, Work<V> work) { return null; }
+			<V extends Green> V route(Green marker, Work<V> work) { return null; }
+			<V extends Gold> V route(Gold marker, Work<V> work) { return null; }
+			<V> V route(Object marker, Work<V> work) { return null; }
+
+			<V extends Red> V select(Red marker, Work<V> work) { return null; }
+			<V extends Blue> V select(Blue marker, Work<V> work) { return null; }
+			<V extends Green> V select(Green marker, Work<V> work) { return null; }
+			<V extends Gold> V select(Gold marker, Work<V> work) { return null; }
+			<V> V select(Object marker, Work<V> work) { return null; }
+			""");
+	}
+
+	// https://github.com/eclipse-jdt/eclipse.jdt.core/issues/5206
+	public void testIssue5206ConcreteRouteChain() {
+		runNestedLambdaTest("ConcreteRouteChain", """
+			String route(Red marker, Work<Red> work) { return ""; }
+			String route(Blue marker, Work<Blue> work) { return ""; }
+			String route(Green marker, Work<Green> work) { return ""; }
+			String route(Gold marker, Work<Gold> work) { return ""; }
+			String route(Object marker, Work<String> work) { return ""; }
+
+			String select(Red marker, Work<Red> work) { return ""; }
+			String select(Blue marker, Work<Blue> work) { return ""; }
+			String select(Green marker, Work<Green> work) { return ""; }
+			String select(Gold marker, Work<Gold> work) { return ""; }
+			String select(Object marker, Work<String> work) { return ""; }
+			""");
+	}
+
+	// https://github.com/eclipse-jdt/eclipse.jdt.core/issues/5206
+	public void testIssue5206InterleavedParameterizedLambdas() {
+		this.runConformTest(new String[] {
+			"InterleavedLambdas.java",
+			"""
+			public class InterleavedLambdas {
+			    interface Producer<T> {
+			        T produce();
+			    }
+			    interface Mapper<T, R> {
+			        R map(T value);
+			    }
+
+			    static <T> T produce(Producer<T> producer) {
+			        return producer.produce();
+			    }
+			    static <T, R> R map(T value, Mapper<T, R> mapper) {
+			        return mapper.map(value);
+			    }
+
+			    public static void main(String[] args) {
+			        String result = produce(() ->
+			            map("left", left ->
+			                produce(() ->
+			                    map(7, number -> left + number)))
+			            + produce(() -> "!"));
+			        System.out.print(result);
+			    }
+			}
+			"""
+		},
+		"left7!");
+	}
+
+	private void runNestedLambdaTest(String className, String overloads) {
+		this.runConformTest(new String[] {
+			className + ".java",
+			"""
+			class %s {
+			    interface Work<V> {
+			        V perform();
+			    }
+			    static final Work<String> TERMINAL = null;
+
+			    void test() {
+			        %s;
+			    }
+			    static class Red { }
+			    static class Blue { }
+			    static class Green { }
+			    static class Gold { }
+			%s
+			}
+			""".formatted(className, createNestedInvocation(), overloads.indent(4).stripTrailing())
+		});
+	}
+
+	private static String createNestedInvocation() {
+		String invocation = "route(null, TERMINAL)";
+		for (int level = 1; level < NESTING_DEPTH; level++) {
+			String selector = level % 2 == 0 ? "route" : "select";
+			invocation = selector + "(null, () -> " + invocation + ")";
+		}
+		return invocation;
+	}
+}
diff --git a/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/TestAll.java b/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/TestAll.java
index b8875da2eae..14087ca36b5 100644
--- a/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/TestAll.java
+++ b/org.eclipse.jdt.core.tests.compiler/src/org/eclipse/jdt/core/tests/compiler/regression/TestAll.java
@@ -131,6 +131,7 @@ public static Test suite() {
 	standardTests.add(NullTypeAnnotationTest.class);
 	standardTests.add(NegativeLambdaExpressionsTest.class);
 	standardTests.add(LambdaExpressionsTest.class);
+	standardTests.add(NestedLambdaInferenceTest.class);
 	standardTests.add(LambdaRegressionTest.class);
 	standardTests.add(SerializableLambdaTest.class);
 	standardTests.add(OverloadResolutionTest8.class);