diff --git a/rascal-textmate-core/src/main/rascal/lang/textmate/conversiontests/NestedCategories.rsc b/rascal-textmate-core/src/main/rascal/lang/textmate/conversiontests/NestedCategories.rsc
new file mode 100644
index 0000000..d1229eb
--- /dev/null
+++ b/rascal-textmate-core/src/main/rascal/lang/textmate/conversiontests/NestedCategories.rsc
@@ -0,0 +1,99 @@
+module lang::textmate::conversiontests::NestedCategories
+
+import Grammar;
+import ParseTree;
+import util::Maybe;
+
+import lang::textmate::Conversion;
+import lang::textmate::ConversionConstants;
+import lang::textmate::ConversionTests;
+import lang::textmate::ConversionUnit;
+
+start syntax Start
+ = A01 | A02 | A03 | A04 | A05 | A06 | A07 | A08 | A09 | A10 | A11 | A12;
+
+lexical A01 = @category="a" B01 [\ ] C01;
+lexical B01 = @category="b" D01 [\ ] "bar01";
+lexical C01 = @category="c" D01 [\ ] "baz01";
+lexical D01 = @category="d" "foo01";
+
+lexical A02 = @category="a" B02 [\ ] C02;
+lexical B02 = @category="b" D02 [\ ] "bar02";
+lexical C02 = @category="c" D02 [\ ] "baz02";
+lexical D02 = "foo02";
+
+lexical A03 = @category="a" B03 [\ ] C03;
+lexical B03 = @category="b" D03 [\ ] "bar03";
+lexical C03 = D03 [\ ] "baz03";
+lexical D03 = @category="d" "foo03";
+
+lexical A04 = @category="a" B04 [\ ] C04;
+lexical B04 = @category="b" D04 [\ ] "bar04";
+lexical C04 = D04 [\ ] "baz04";
+lexical D04 = "foo04";
+
+lexical A05 = @category="a" B05 [\ ] C05;
+lexical B05 = D05 [\ ] "bar05";
+lexical C05 = D05 [\ ] "baz05";
+lexical D05 = @category="d" "foo05";
+
+lexical A06 = @category="a" B06 [\ ] C06;
+lexical B06 = D06 [\ ] "bar06";
+lexical C06 = D06 [\ ] "baz06";
+lexical D06 = "foo06";
+
+lexical A07 = B07 [\ ] C07;
+lexical B07 = @category="b" D07 [\ ] "bar07";
+lexical C07 = @category="c" D07 [\ ] "baz07";
+lexical D07 = @category="d" "foo07";
+
+lexical A08 = B08 [\ ] C08;
+lexical B08 = @category="b" D08 [\ ] "bar08";
+lexical C08 = @category="c" D08 [\ ] "baz08";
+lexical D08 = "foo08";
+
+lexical A09 = B09 [\ ] C09;
+lexical B09 = @category="b" D09 [\ ] "bar09";
+lexical C09 = D09 [\ ] "baz09";
+lexical D09 = @category="d" "foo09"; // Design decision: D09 should be converted
+ // to a TextMate rule, because it's
+ // reachable via C09, which doesn't have a
+ // category
+
+lexical A10 = B10 [\ ] C10;
+lexical B10 = @category="b" D10 [\ ] "bar10";
+lexical C10 = D10 [\ ] "baz10";
+lexical D10 = "foo10";
+
+lexical A11 = B11 [\ ] C11;
+lexical B11 = D11 [\ ] "bar11";
+lexical C11 = D11 [\ ] "baz11";
+lexical D11 = @category="d" "foo11";
+
+lexical A12 = B12 [\ ] C12;
+lexical B12 = D12 [\ ] "bar12";
+lexical C12 = D12 [\ ] "baz12";
+lexical D12 = "foo12";
+
+Grammar rsc = preprocess(grammar(#Start));
+
+list[ConversionUnit] units = [
+ unit(rsc, prod(lex("C07"),[lex("D07"),lit(" "),lit("baz07")],{\tag("category"("c"))}), false, false, <just(lit(" ")),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("C08"),[lex("D08"),lit(" "),lit("baz08")],{\tag("category"("c"))}), false, false, <just(lit(" ")),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("A01"),[lex("B01"),lit(" "),lex("C01")],{\tag("category"("a"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("A02"),[lex("B02"),lit(" "),lex("C02")],{\tag("category"("a"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("A03"),[lex("B03"),lit(" "),lex("C03")],{\tag("category"("a"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("A04"),[lex("B04"),lit(" "),lex("C04")],{\tag("category"("a"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("A05"),[lex("B05"),lit(" "),lex("C05")],{\tag("category"("a"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("A06"),[lex("B06"),lit(" "),lex("C06")],{\tag("category"("a"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("B07"),[lex("D07"),lit(" "),lit("bar07")],{\tag("category"("b"))}), false, false, <nothing(),just(lit(" "))>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("B08"),[lex("D08"),lit(" "),lit("bar08")],{\tag("category"("b"))}), false, false, <nothing(),just(lit(" "))>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("B09"),[lex("D09"),lit(" "),lit("bar09")],{\tag("category"("b"))}), false, false, <nothing(),just(lit(" "))>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("B10"),[lex("D10"),lit(" "),lit("bar10")],{\tag("category"("b"))}), false, false, <nothing(),just(lit(" "))>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("D09"),[lit("foo09")],{\tag("category"("d"))}), false, false, <nothing(),just(lit(" "))>, <nothing(),nothing()>),
+ unit(rsc, prod(lex("D11"),[lit("foo11")],{\tag("category"("d"))}), false, false, <nothing(),just(lit(" "))>, <nothing(),nothing()>),
+ unit(rsc, prod(lex(KEYWORDS_PRODUCTION_NAME),[alt({lit("foo07"),lit("foo06"),lit("foo09"),lit("foo08"),lit("foo03"),lit("foo02"),lit("foo05"),lit("foo04"),lit("foo10"),lit("baz09"),lit("foo11"),lit("baz06"),lit("baz05"),lit("baz08"),lit("baz07"),lit("baz02"),lit("baz04"),lit("baz03"),lit("bar06"),lit("bar05"),lit("bar02"),lit("bar04"),lit("bar03"),lit("bar11"),lit("bar10"),lit("foo12"),lit("foo01"),lit("baz12"),lit("baz01"),lit("bar09"),lit("baz11"),lit("bar08"),lit("baz10"),lit("bar07"),lit("bar12"),lit("bar01")})],{\tag("category"("keyword.control"))}), false, false, <nothing(),nothing()>, <nothing(),nothing()>)
+];
+
+test bool analyzeTest() = doAnalyzeTest(rsc, units, name = "NestedCategories");
+test bool transformTest() = doTransformTest(units, <15, 0, 0>, name = "NestedCategories");
diff --git a/rascal-textmate-core/src/main/rascal/lang/textmate/conversiontests/NestedCategories.test b/rascal-textmate-core/src/main/rascal/lang/textmate/conversiontests/NestedCategories.test
new file mode 100644
index 0000000..500b498
--- /dev/null
+++ b/rascal-textmate-core/src/main/rascal/lang/textmate/conversiontests/NestedCategories.test
@@ -0,0 +1,211 @@
+# SYNTAX TEST "NestedCategories"
+
+ foo01 bar01 foo01 baz01
+# ^ a
+# ^^^^^^ b
+# ^^^^^^ c
+# ^^^^^ ^^^^^ d
+
+ foo01 bar01
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo01 baz01
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo01
+# ^^^^^ -d
+
+ foo02 bar02 foo02 baz02
+# ^ a
+# ^^^^^^^^^^^ b
+# ^^^^^^^^^^^ c
+# ^^^^^ ^^^^^ -d
+
+ foo02 bar02
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo02 baz02
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo02
+# ^^^^^ -d
+
+ foo03 bar03 foo03 baz03
+# ^ ^^^^^^ a
+# ^^^^^^ b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ d
+
+ foo03 bar03
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo03 baz03
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo03
+# ^^^^^ -d
+
+ foo04 bar04 foo04 baz04
+# ^^^^^^^^^^^^ a
+# ^^^^^^^^^^^ b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ -d
+
+ foo04 bar04
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo04 baz04
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo04
+# ^^^^^ -d
+
+ foo05 bar05 foo05 baz05
+# ^^^^^^^ ^^^^^^ a
+# ^^^^^^^^^^^ -b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ d
+
+ foo05 bar05
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo05 baz05
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo05
+# ^^^^^ -d
+
+ foo06 bar06 foo06 baz06
+# ^^^^^^^^^^^^^^^^^^^^^^^ a
+# ^^^^^^^^^^^ -b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ -d
+
+ foo06 bar06
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo06 baz06
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo06
+# ^^^^^ -d
+
+ foo07 bar07 foo07 baz07
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^ b
+# ^^^^^^ c
+# ^^^^^ ^^^^^ d
+
+ foo07 bar07
+# ^^^^^^ b
+# ^^^^^ d
+
+ foo07 baz07
+# ^^^^^^ c
+# ^^^^^ d
+
+ foo07
+# ^^^^^ -d
+
+ foo08 bar08 foo08 baz08
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^^^^^^ b
+# ^^^^^^^^^^^ c
+# ^^^^^ ^^^^^ -d
+
+ foo08 bar08
+# ^^^^^^^^^^^ b
+# ^^^^^ -d
+
+ foo08 baz08
+# ^^^^^^^^^^^ c
+# ^^^^^ -d
+
+ foo08
+# ^^^^^ -d
+
+ foo09 bar09 foo09 baz09
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^ b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ d
+
+ foo09 bar09
+# ^^^^^^ b
+# ^^^^^ d
+
+ foo09 baz09
+# ^^^^^^^^^^^ -c
+# ^^^^^ d
+
+ foo09
+# ^^^^^ d
+
+ foo10 bar10 foo10 baz10
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^^^^^^ b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ -d
+
+ foo10 bar10
+# ^^^^^^^^^^^ b
+# ^^^^^ -d
+
+ foo10 baz10
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo10
+# ^^^^^ -d
+
+ foo11 bar11 foo11 baz11
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^^^^^^ -b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ d
+
+ foo11 bar11
+# ^^^^^^^^^^^ -b
+# ^^^^^ d
+
+ foo11 baz11
+# ^^^^^^^^^^^ -c
+# ^^^^^ d
+
+ foo11
+# ^^^^^ d
+
+ foo12 bar12 foo12 baz12
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^^^^^^ -b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ -d
+
+ foo11 bar11 foo11 baz11
+# ^^^^^^^^^^^^^^^^^^^^^^^ -a
+# ^^^^^^^^^^^ -b
+# ^^^^^^^^^^^ -c
+# ^^^^^ ^^^^^ d
+
+ foo12 bar12
+# ^^^^^^^^^^^ -b
+# ^^^^^ -d
+
+ foo12 baz12
+# ^^^^^^^^^^^ -c
+# ^^^^^ -d
+
+ foo12
+# ^^^^^ -d
\ No newline at end of file