diff --git a/python/semantic_kernel/connectors/openapi_plugin/openapi_parser.py b/python/semantic_kernel/connectors/openapi_plugin/openapi_parser.py
index 34bea1bff2dd..1c58332b58a7 100644
--- a/python/semantic_kernel/connectors/openapi_plugin/openapi_parser.py
+++ b/python/semantic_kernel/connectors/openapi_plugin/openapi_parser.py
@@ -118,7 +118,9 @@ def _get_payload_properties(self, operation_id, schema, required_properties, lev
                 name=property_name,
                 type=property_schema.get("type", None),
                 is_required=property_name in required_properties,
-                properties=self._get_payload_properties(operation_id, property_schema, required_properties, level + 1),
+                properties=self._get_payload_properties(
+                    operation_id, property_schema, property_schema.get("required", set()), level + 1
+                ),
                 description=property_schema.get("description", None),
                 schema=property_schema,
                 default_value=default_value,
diff --git a/python/tests/unit/connectors/openapi_plugin/test_openapi_parser.py b/python/tests/unit/connectors/openapi_plugin/test_openapi_parser.py
index b0c81074e5a8..e2d7cff1920c 100644
--- a/python/tests/unit/connectors/openapi_plugin/test_openapi_parser.py
+++ b/python/tests/unit/connectors/openapi_plugin/test_openapi_parser.py
@@ -383,3 +383,28 @@ def test_create_functions_propagates_enable_file_ref_resolution():
             enable_file_ref_resolution=True,
             enable_http_ref_resolution=False,
         )
+
+
+def test_get_payload_properties_nested_required():
+    parser = OpenApiParser()
+    schema = {
+        "type": "object",
+        "required": ["address"],
+        "properties": {
+            "address": {
+                "type": "object",
+                "required": ["street"],
+                "properties": {
+                    "street": {"type": "string"},
+                    "city": {"type": "string"},
+                },
+            },
+        },
+    }
+    properties = parser._get_payload_properties("operation_id", schema, schema.get("required", []))
+    address = properties[0]
+    assert address.is_required
+    nested = {prop.name: prop.is_required for prop in address.properties}
+    # street is in the address object's own required list, not the root one
+    assert nested["street"]
+    assert not nested["city"]