diff --git a/core/src/main/java/google/registry/persistence/transaction/JpaTransactionManagerImpl.java b/core/src/main/java/google/registry/persistence/transaction/JpaTransactionManagerImpl.java
index 58e7c8c9b..892811245 100644
--- a/core/src/main/java/google/registry/persistence/transaction/JpaTransactionManagerImpl.java
+++ b/core/src/main/java/google/registry/persistence/transaction/JpaTransactionManagerImpl.java
@@ -154,6 +154,10 @@ public class JpaTransactionManagerImpl implements JpaTransactionManager {
 
   @Override
   public <T> T transact(Supplier<T> work) {
+    // This prevents inner transaction from retrying, thus avoiding a cascade retry effect.
+    if (inTransaction()) {
+      return transactNoRetry(work);
+    }
     return retrier.callWithRetry(() -> transactNoRetry(work), JpaRetries::isFailedTxnRetriable);
   }
 
diff --git a/core/src/test/java/google/registry/persistence/transaction/JpaTransactionManagerImplTest.java b/core/src/test/java/google/registry/persistence/transaction/JpaTransactionManagerImplTest.java
index 4daddd2b4..91ddd539e 100644
--- a/core/src/test/java/google/registry/persistence/transaction/JpaTransactionManagerImplTest.java
+++ b/core/src/test/java/google/registry/persistence/transaction/JpaTransactionManagerImplTest.java
@@ -580,6 +580,32 @@ class JpaTransactionManagerImplTest {
                     .isFalse());
   }
 
+  @Test
+  void innerTransactions_noRetry() {
+    JpaTransactionManager spyJpaTm = spy(tm());
+    doThrow(OptimisticLockException.class).when(spyJpaTm).delete(any(VKey.class));
+    spyJpaTm.transact(() -> spyJpaTm.insert(theEntity));
+
+    Supplier<Runnable> supplier =
+        () -> {
+          Runnable work = () -> spyJpaTm.delete(theEntityKey);
+          work.run();
+          return null;
+        };
+
+    assertThrows(
+        OptimisticLockException.class,
+        () ->
+            spyJpaTm.transact(
+                () -> {
+                  spyJpaTm.exists(theEntity);
+                  spyJpaTm.transact(supplier);
+                }));
+
+    verify(spyJpaTm, times(3)).exists(theEntity);
+    verify(spyJpaTm, times(3)).delete(theEntityKey);
+  }
+
   private void insertPerson(int age) {
     tm().getEntityManager()
         .createNativeQuery(String.format("INSERT INTO Person (age) VALUES (%d)", age))