diff -urN nss-pam-ldapd-0.8.12.vanilla/nslcd/group.c nss-pam-ldapd-0.8.12/nslcd/group.c
--- nss-pam-ldapd-0.8.12.vanilla/nslcd/group.c	2012-09-14 13:25:51.000000000 +0100
+++ nss-pam-ldapd-0.8.12/nslcd/group.c	2013-03-20 14:48:14.000000000 +0000
@@ -145,6 +145,22 @@
                     attmap_group_member,safedn);
 }
 
+static int mkfilter_group_bymemberdn(MYLDAP_SESSION *session,
+                                   const char *dn,
+                                   char *buffer,size_t buflen)
+{
+  char safeuid[300];
+  char safedn[300];
+  
+  /* escape DN */
+  if(myldap_escape(dn,safedn,sizeof(safedn)))
+    return -1;
+  return mysnprintf(buffer,buflen,
+                    "(&%s(%s=%s))",
+                    group_filter,
+                    attmap_group_member,safedn);
+}
+
 void group_init(void)
 {
   int i;
@@ -202,16 +218,15 @@
   return 0;
 }
 
-/* return the list of members */
-static const char **getmembers(MYLDAP_ENTRY *entry,MYLDAP_SESSION *session)
+static void getmembers_set(MYLDAP_ENTRY *entry,MYLDAP_SESSION *session, SET *set)
 {
   char buf[256];
   int i;
   const char **values;
-  SET *set;
-  set=set_new();
-  if (set==NULL)
-    return NULL;
+  int j;
+  int rc;
+  MYLDAP_SEARCH * search;
+  MYLDAP_ENTRY * entry2;
   /* add the memberUid values */
   values=myldap_get_values(entry,attmap_group_memberUid);
   if (values!=NULL)
@@ -229,7 +244,26 @@
       /* transform the DN into a uid (dn2uid() already checks validity) */
       if (dn2uid(session,values[i],buf,sizeof(buf))!=NULL)
         set_add(set,buf);
+      /* Wasn't a UID - try handling it as a nested group */
+      else if ((search=myldap_search(session,values[i],LDAP_SCOPE_BASE,group_filter,group_attrs,NULL)) != NULL)
+      {
+        while ((entry2=myldap_get_entry(search,&rc))!=NULL)
+          getmembers_set(entry2, session, set);
+      }
     }
+}
+
+/* return the list of members */
+static const char **getmembers(MYLDAP_ENTRY *entry,MYLDAP_SESSION *session)
+{
+  char buf[20];
+  int i;
+  const char **values;
+  SET *set;
+  set=set_new();
+  if (set==NULL)
+    return NULL;
+  getmembers_set(entry, session, set);
   /* return the members */
   values=set_tolist(set);
   set_free(set);
@@ -315,6 +349,40 @@
   return rc;
 }
 
+static int write_group_and_parents(TFILE *fp,MYLDAP_ENTRY *entry, MYLDAP_SESSION *session) {
+  const char * dn;
+  int rc;
+  int rc2;
+  int i;
+  MYLDAP_SEARCH * search;
+  MYLDAP_ENTRY * entry2;
+  const char * base;
+  char filter[1024];
+
+  rc = write_group(fp,entry,NULL,NULL,0,session);
+  if (! rc)
+  {
+    dn = myldap_get_dn(entry);
+    log_log(LOG_DEBUG, "dn = %s", dn);
+
+    // Make filter
+    mkfilter_group_bymemberdn(session, dn, filter, sizeof(filter));
+    for (i=0; (base=group_bases[i])!=NULL; i++)
+    {
+      /* do the LDAP search */ \
+      if ((search=myldap_search(session,base,group_scope,filter,group_attrs,NULL))==NULL)
+        return -1;
+      /* go over results */
+      while ((entry2=myldap_get_entry(search,&rc2))!=NULL)
+      {
+        if (write_group_and_parents(fp,entry2,session))
+          return -1;
+      }
+    }
+  }
+  return rc;
+}
+
 NSLCD_HANDLE(
   group,byname,
   char name[256];
@@ -364,7 +432,7 @@
   },
   NSLCD_ACTION_GROUP_BYMEMBER,
   mkfilter_group_bymember(session,name,filter,sizeof(filter)),
-  write_group(fp,entry,NULL,NULL,0,session)
+  write_group_and_parents(fp,entry,session)
 )
 
 NSLCD_HANDLE(