diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index c5db0c5f..489125ef 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -29,6 +29,8 @@ Fixed
   <https://github.com/omni-us/jsonargparse/pull/597>`__).
 - Callables that return class not considering previous values (`#603
   <https://github.com/omni-us/jsonargparse/pull/603>`__).
+- Custom instantiators not working for nested dependency injection (`#608
+  <https://github.com/omni-us/jsonargparse/pull/608>`__).
 
 Changed
 ^^^^^^^
diff --git a/jsonargparse/_common.py b/jsonargparse/_common.py
index f4e99bad..9af90e53 100644
--- a/jsonargparse/_common.py
+++ b/jsonargparse/_common.py
@@ -59,7 +59,7 @@ def __call__(self, class_type: Type[ClassType], *args, **kwargs) -> ClassType:
 defaults_cache: ContextVar[Optional[Namespace]] = ContextVar("defaults_cache", default=None)
 lenient_check: ContextVar[Union[bool, str]] = ContextVar("lenient_check", default=False)
 load_value_mode: ContextVar[Optional[str]] = ContextVar("load_value_mode", default=None)
-class_instantiators: ContextVar[Optional[InstantiatorsDictType]] = ContextVar("class_instantiators")
+class_instantiators: ContextVar[Optional[InstantiatorsDictType]] = ContextVar("class_instantiators", default=None)
 nested_links: ContextVar[List[dict]] = ContextVar("nested_links", default=[])
 
 
diff --git a/jsonargparse/_core.py b/jsonargparse/_core.py
index ce89003e..86a575a0 100644
--- a/jsonargparse/_core.py
+++ b/jsonargparse/_core.py
@@ -39,6 +39,7 @@
 from ._common import (
     InstantiatorCallable,
     InstantiatorsDictType,
+    class_instantiators,
     debug_mode_active,
     is_dataclass_like,
     lenient_check,
@@ -1139,6 +1140,10 @@ def _get_instantiators(self):
             parent_instantiators = self.parent_parser._get_instantiators()
             instantiators = instantiators.copy()
             instantiators.update({k: v for k, v in parent_instantiators.items() if k not in instantiators})
+        context_instantiators = class_instantiators.get()
+        if context_instantiators:
+            instantiators = instantiators.copy()
+            instantiators.update({k: v for k, v in context_instantiators.items() if k not in instantiators})
         return instantiators
 
     def instantiate_classes(
diff --git a/jsonargparse_tests/test_subclasses.py b/jsonargparse_tests/test_subclasses.py
index f85fe50f..e433fc2a 100644
--- a/jsonargparse_tests/test_subclasses.py
+++ b/jsonargparse_tests/test_subclasses.py
@@ -479,6 +479,21 @@ def test_custom_instantiation_replace(parser):
     assert list(parser._instantiators.values())[0] is second_instantiator
 
 
+class CustomInstantiationNested:
+    def __init__(self, sub: CustomInstantiationBase):
+        self.sub = sub
+
+
+def test_custom_instantiation_nested(parser):
+    parser.add_argument("--cls", type=CustomInstantiationNested)
+    parser.add_instantiator(instantiator("nested"), CustomInstantiationBase, subclasses=True)
+    cfg = parser.parse_args(["--cls=CustomInstantiationNested", "--cls.sub=CustomInstantiationSub"])
+    init = parser.instantiate_classes(cfg)
+    assert isinstance(init.cls, CustomInstantiationNested)
+    assert isinstance(init.cls.sub, CustomInstantiationSub)
+    assert init.cls.sub.call == "nested"
+
+
 # environment tests