diff --git a/src/django_components/node.py b/src/django_components/node.py
index bcc61447..3ba28f0b 100644
--- a/src/django_components/node.py
+++ b/src/django_components/node.py
@@ -25,9 +25,11 @@ class BaseNode(Node):
         self.kwargs = kwargs or RuntimeKwargs({})
 
 
+# NOTE: We consider Nodes to have content only if they have anything else
+#       beside whitespace and comments.
 def nodelist_has_content(nodelist: NodeList) -> bool:
     for node in nodelist:
-        if isinstance(node, TextNode) and node.s.isspace():
+        if isinstance(node, TextNode) and (not node.s or node.s.isspace()):
             pass
         elif isinstance(node, CommentNode):
             pass
diff --git a/tests/test_templatetags.py b/tests/test_templatetags.py
index 7eb4e524..b455fed8 100644
--- a/tests/test_templatetags.py
+++ b/tests/test_templatetags.py
@@ -511,3 +511,29 @@ class MultilineTagsTests(BaseTestCase):
             Variable: <strong>123</strong>
         """
         self.assertHTMLEqual(rendered, expected)
+
+
+class NestedTagsTests(BaseTestCase):
+    # See https://github.com/EmilStenstrom/django-components/discussions/671
+    @parametrize_context_behavior(["django", "isolated"])
+    def test_nested_tags(self):
+        @register("test_component")
+        class SimpleComponent(Component):
+            template: types.django_html = """
+                Variable: <strong>{{ var }}</strong>
+            """
+
+            def get_context_data(self, var):
+                return {
+                    "var": var,
+                }
+
+        template: types.django_html = """
+            {% load component_tags %}
+            {% component "test_component" var="{% lorem 1 w %}" %}{% endcomponent %}
+        """
+        rendered = Template(template).render(Context())
+        expected = """
+            Variable: <strong>lorem</strong>
+        """
+        self.assertHTMLEqual(rendered, expected)