diff --git a/test/integration/nested_model.cc b/test/integration/nested_model.cc
index a9cc3db8a..b72dc857c 100644
--- a/test/integration/nested_model.cc
+++ b/test/integration/nested_model.cc
@@ -243,6 +243,102 @@ TEST(NestedModel, State)
     gz::math::Pose3d(0, 0, 0, 0, 0, 0));
 }
 
+////////////////////////////////////////
+// Test parsing nested model states
+TEST(NestedModel, StateSiblingsConversion1_12)
+{
+  const std::string testFile =
+  sdf::testing::TestFile("sdf", "state_nested_model_world.sdf");
+
+  // Load the SDF file
+  sdf::Root root;
+  auto errors = root.Load(testFile);
+  EXPECT_TRUE(errors.empty());
+
+  // load the state sdf
+  EXPECT_TRUE(root.Element()->HasElement("world"));
+  sdf::ElementPtr worldElem = root.Element()->GetElement("world");
+
+  // Confirm that regular model elements were not migrated
+  EXPECT_FALSE(worldElem->HasElement("model_state"));
+
+  // Confirm that model and link elements in state were converted to
+  // model_state and link_state
+  EXPECT_TRUE(worldElem->HasElement("state"));
+  sdf::ElementPtr stateElem = worldElem->GetElement("state");
+  EXPECT_TRUE(stateElem->HasElement("model_state"))
+    << stateElem->ToString("");
+  EXPECT_FALSE(stateElem->HasElement("model"))
+    << stateElem->ToString("");
+
+  // model sdf
+  sdf::ElementPtr modelStateElem = stateElem->GetElement("model_state");
+  EXPECT_TRUE(modelStateElem->HasAttribute("name"));
+  EXPECT_EQ(modelStateElem->Get<std::string>("name"), "top_level_model");
+  EXPECT_TRUE(modelStateElem->HasElement("link_state"))
+    << modelStateElem->ToString("");
+  EXPECT_TRUE(modelStateElem->HasElement("model_state"))
+    << modelStateElem->ToString("");
+  EXPECT_FALSE(modelStateElem->HasElement("link"))
+    << modelStateElem->ToString("");
+  EXPECT_FALSE(modelStateElem->HasElement("model"))
+    << modelStateElem->ToString("");
+}
+
+////////////////////////////////////////
+// Test parsing nested model states
+TEST(NestedModel, StateInsertionsConversion1_12)
+{
+  const std::string testFile =
+  sdf::testing::TestFile("sdf", "state_nested_model_world_insertion.sdf");
+
+  // Load the SDF file
+  sdf::Root root;
+  auto errors = root.Load(testFile);
+  EXPECT_TRUE(errors.empty());
+
+  // load the state sdf
+  EXPECT_TRUE(root.Element()->HasElement("world"));
+  sdf::ElementPtr worldElem = root.Element()->GetElement("world");
+
+  // Confirm that regular model elements were not migrated
+  EXPECT_FALSE(worldElem->HasElement("model_state"));
+
+  // Confirm that model and link elements in state were converted to
+  // model_state and link_state
+  EXPECT_TRUE(worldElem->HasElement("state"));
+  sdf::ElementPtr stateElem = worldElem->GetElement("state");
+  EXPECT_TRUE(stateElem->HasElement("model_state"))
+    << stateElem->ToString("");
+  EXPECT_FALSE(stateElem->HasElement("model"))
+    << stateElem->ToString("");
+
+  // model sdf
+  sdf::ElementPtr modelStateElem = stateElem->GetElement("model_state");
+  EXPECT_TRUE(modelStateElem->HasAttribute("name"));
+  EXPECT_EQ(modelStateElem->Get<std::string>("name"), "top_level_model");
+  EXPECT_TRUE(modelStateElem->HasElement("link_state"))
+    << modelStateElem->ToString("");
+  EXPECT_TRUE(modelStateElem->HasElement("model_state"))
+    << modelStateElem->ToString("");
+  EXPECT_FALSE(modelStateElem->HasElement("link"))
+    << modelStateElem->ToString("");
+  EXPECT_FALSE(modelStateElem->HasElement("model"))
+    << modelStateElem->ToString("");
+
+  // insertions
+  EXPECT_TRUE(stateElem->HasElement("insertions"));
+  sdf::ElementPtr insertionsElem = stateElem->GetElement("insertions");
+  // confirm that //insertions/model and link tags were not converted
+  EXPECT_FALSE(insertionsElem->HasElement("model_state"));
+  EXPECT_TRUE(insertionsElem->HasElement("model"));
+  sdf::ElementPtr insertedModelElem = insertionsElem->GetElement("model");
+  EXPECT_TRUE(insertedModelElem->HasAttribute("name"));
+  EXPECT_EQ(insertedModelElem->Get<std::string>("name"), "unit_box");
+  EXPECT_FALSE(insertedModelElem->HasElement("link_state"));
+  EXPECT_TRUE(insertedModelElem->HasElement("link"));
+}
+
 ////////////////////////////////////////
 // Test parsing models with joints nested via <include>
 // Confirm that joint axis rotation is handled differently for 1.4 and 1.5+
diff --git a/test/sdf/state_nested_model_world.sdf b/test/sdf/state_nested_model_world.sdf
new file mode 100644
index 000000000..e4a177b3c
--- /dev/null
+++ b/test/sdf/state_nested_model_world.sdf
@@ -0,0 +1,79 @@
+<?xml version="1.0"?>
+<sdf version="1.7">
+  <world name="default">
+    <model name="top_level_model">
+      <link name="parent"/>
+      <link name="child"/>
+      <model name="nested_model01">
+        <link name="nested_link01"/>
+        <link name="nested_link02"/>
+        <model name="nested_nested_model01">
+          <link name="nested_nested_link01"/>
+          <link name="nested_nested_link02"/>
+        </model>
+        <model name="nested_nested_model02">
+          <link name="nested_nested_link01"/>
+          <link name="nested_nested_link02"/>
+        </model>
+      </model>
+      <model name="nested_model02">
+        <link name="nested_link01"/>
+        <link name="nested_link02"/>
+      </model>
+      <joint name="top_level_joint" type="revolute">
+        <parent>parent</parent>
+        <child>child</child>
+        <axis>
+          <xyz>1 0 0</xyz>
+        </axis>
+      </joint>
+    </model>
+    <gravity>0 0 -9.8</gravity>
+    <state world_name="default">
+      <sim_time>0 689000000</sim_time>
+      <real_time>0 732670244</real_time>
+      <wall_time>1709252095 646182343</wall_time>
+      <iterations>689</iterations>
+      <model name="top_level_model">
+        <link name="child">
+          <pose>0 0 -2.329 0 -0 0 </pose>
+        </link>
+        <link name="parent">
+          <pose>0 0 -2.329 0 -0 0 </pose>
+        </link>
+        <model name="nested_model01">
+          <link name="nested_link01">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+          <link name="nested_link02">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+          <model name="nested_nested_model01">
+            <link name="nested_nested_link01">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+            <link name="nested_nested_link02">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+          </model>
+          <model name="nested_nested_model02">
+            <link name="nested_nested_link01">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+            <link name="nested_nested_link02">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+          </model>
+        </model>
+        <model name="nested_model02">
+          <link name="nested_link01">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+          <link name="nested_link02">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+        </model>
+      </model>
+    </state>
+  </world>
+</sdf>
diff --git a/test/sdf/state_nested_model_world_insertion.sdf b/test/sdf/state_nested_model_world_insertion.sdf
new file mode 100644
index 000000000..d1affbd75
--- /dev/null
+++ b/test/sdf/state_nested_model_world_insertion.sdf
@@ -0,0 +1,90 @@
+<?xml version="1.0"?>
+<sdf version="1.7">
+  <world name="default">
+    <model name="top_level_model">
+      <link name="parent"/>
+      <link name="child"/>
+      <model name="nested_model01">
+        <link name="nested_link01"/>
+        <link name="nested_link02"/>
+        <model name="nested_nested_model01">
+          <link name="nested_nested_link01"/>
+          <link name="nested_nested_link02"/>
+        </model>
+        <model name="nested_nested_model02">
+          <link name="nested_nested_link01"/>
+          <link name="nested_nested_link02"/>
+        </model>
+      </model>
+      <model name="nested_model02">
+        <link name="nested_link01"/>
+        <link name="nested_link02"/>
+      </model>
+      <joint name="top_level_joint" type="revolute">
+        <parent>parent</parent>
+        <child>child</child>
+        <axis>
+          <xyz>1 0 0</xyz>
+        </axis>
+      </joint>
+    </model>
+    <gravity>0 0 -9.8</gravity>
+    <state world_name="default">
+      <sim_time>0 689000000</sim_time>
+      <real_time>0 732670244</real_time>
+      <wall_time>1709252095 646182343</wall_time>
+      <iterations>689</iterations>
+      <insertions>
+        <model name='unit_box'>
+          <pose>-0.541687 -2.44761 0.5 0 -0 0</pose>
+          <link name='link'/>
+        </model>
+      </insertions>
+      <model name="top_level_model">
+        <link name="child">
+          <pose>0 0 -2.329 0 -0 0 </pose>
+        </link>
+        <link name="parent">
+          <pose>0 0 -2.329 0 -0 0 </pose>
+        </link>
+        <model name="nested_model01">
+          <link name="nested_link01">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+          <link name="nested_link02">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+          <model name="nested_nested_model01">
+            <link name="nested_nested_link01">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+            <link name="nested_nested_link02">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+          </model>
+          <model name="nested_nested_model02">
+            <link name="nested_nested_link01">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+            <link name="nested_nested_link02">
+              <pose>0 0 -2.329 0 -0 0 </pose>
+            </link>
+          </model>
+        </model>
+        <model name="nested_model02">
+          <link name="nested_link01">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+          <link name="nested_link02">
+            <pose>0 0 -2.329 0 -0 0 </pose>
+          </link>
+        </model>
+      </model>
+      <model name="unit_box">
+        <link name="link">
+          <pose>-0.5417 -2.448 0.5 0 -0 0 </pose>
+        </link>
+      </model>
+    </state>
+  </world>
+</sdf>