diff --git a/dotnet/src/Microsoft.Agents.AI/Skills/File/AgentFileSkillsSource.cs b/dotnet/src/Microsoft.Agents.AI/Skills/File/AgentFileSkillsSource.cs
index 54a5dec10cc..430977bf276 100644
--- a/dotnet/src/Microsoft.Agents.AI/Skills/File/AgentFileSkillsSource.cs
+++ b/dotnet/src/Microsoft.Agents.AI/Skills/File/AgentFileSkillsSource.cs
@@ -162,7 +162,10 @@ private static void SearchDirectoriesForSkills(string directory, List<string> re
         string skillFilePath = Path.Combine(directory, SkillFileName);
         if (File.Exists(skillFilePath))
         {
+            // Once a SKILL.md is found, this directory is the skill root.
+            // Subdirectories are part of this skill and should not be treated as independent skill roots.
             results.Add(Path.GetFullPath(directory));
+            return;
         }
 
         if (currentDepth >= MaxSkillDirectorySearchDepth)
diff --git a/dotnet/tests/Microsoft.Agents.AI.UnitTests/AgentSkills/FileAgentSkillLoaderTests.cs b/dotnet/tests/Microsoft.Agents.AI.UnitTests/AgentSkills/FileAgentSkillLoaderTests.cs
index 6eb561c5b69..b001b46504e 100644
--- a/dotnet/tests/Microsoft.Agents.AI.UnitTests/AgentSkills/FileAgentSkillLoaderTests.cs
+++ b/dotnet/tests/Microsoft.Agents.AI.UnitTests/AgentSkills/FileAgentSkillLoaderTests.cs
@@ -1199,4 +1199,27 @@ public async Task GetSkillsAsync_SymlinkedFileInRealDirectory_SkipsSymlinkedFile
         Assert.Equal("references/legit.md", skill.GetTestResources()![0].Name);
     }
 #endif
+
+    [Fact]
+    public async Task GetSkillsAsync_NestedSkillMd_DoesNotTreatSubdirectoryAsIndependentSkillAsync()
+    {
+        // Arrange — parent has SKILL.md; subdirectory also has SKILL.md with a name
+        // matching its directory so it would pass validation if discovered.
+        // Only the parent should be discovered as a skill root.
+        string parentSkillDir = this.CreateSkillDirectory("parent-skill", "Parent skill", "Parent body.");
+        string childDir = Path.Combine(parentSkillDir, "child");
+        Directory.CreateDirectory(childDir);
+        File.WriteAllText(
+            Path.Combine(childDir, "SKILL.md"),
+            "---\nname: child\ndescription: Child skill\n---\nChild body.");
+
+        var source = new AgentFileSkillsSource(this._testRoot, s_noOpExecutor);
+
+        // Act
+        var skills = await source.GetSkillsAsync();
+
+        // Assert — only the parent skill is discovered; the nested child is not an independent skill
+        Assert.Single(skills);
+        Assert.Equal("parent-skill", skills[0].Frontmatter.Name);
+    }
 }