diff --git a/packages/react/src/components/IonOverlayManager.tsx b/packages/react/src/components/IonOverlayManager.tsx
index 4000fdfaa1..61b9513d47 100644
--- a/packages/react/src/components/IonOverlayManager.tsx
+++ b/packages/react/src/components/IonOverlayManager.tsx
@@ -1,4 +1,4 @@
-import React, { useEffect, useState } from 'react';
+import React, { useEffect, useRef, useState } from 'react';
 import ReactDOM from 'react-dom';
 
 import { ReactComponentOrElement } from '../models';
@@ -25,12 +25,29 @@ export const IonOverlayManager: React.FC<IonOverlayManagerProps> = ({
   onAddOverlay,
   onRemoveOverlay,
 }) => {
-  const [overlays, setOverlays] = useState<{
+  type OverlaysList = {
     [key: string]: {
       component: any;
       containerElement: HTMLDivElement;
     };
-  }>({});
+  };
+
+  /**
+   * Because of the way we're passing around the addOverlay and removeOverlay
+   * callbacks, by the time they finally get called, they use a stale reference
+   * to the state that only has the initial values. So if two overlays are opened
+   * at the same time, both using useIonModal or similar (such as through nesting),
+   * the second will erase the first from the overlays list. This causes the content
+   * of the first overlay to unmount.
+   *
+   * We wrap the state in useRef to ensure the two callbacks always use the most
+   * up-to-date version.
+   *
+   * Further reading: https://stackoverflow.com/a/56554056
+   */
+  const [overlays, setOverlays] = useState<OverlaysList>({});
+  const overlaysRef = useRef<OverlaysList>({});
+  overlaysRef.current = overlays;
 
   useEffect(() => {
     /* Setup the callbacks that get called from <IonApp /> */
@@ -43,13 +60,13 @@ export const IonOverlayManager: React.FC<IonOverlayManagerProps> = ({
     component: ReactComponentOrElement,
     containerElement: HTMLDivElement
   ) => {
-    const newOverlays = { ...overlays };
+    const newOverlays = { ...overlaysRef.current };
     newOverlays[id] = { component, containerElement };
     setOverlays(newOverlays);
   };
 
   const removeOverlay = (id: string) => {
-    const newOverlays = { ...overlays };
+    const newOverlays = { ...overlaysRef.current };
     delete newOverlays[id];
     setOverlays(newOverlays);
   };