diff --git a/crates/idml/src/import.rs b/crates/idml/src/import.rs
index 4570a0694..fb35d90c6 100644
--- a/crates/idml/src/import.rs
+++ b/crates/idml/src/import.rs
@@ -1823,6 +1823,15 @@ impl<'r> Importer<'r> {
         t
     }
 
+    /// The format of the text in a `CharacterStyleRange`: its style, and its local attributes over
+    /// the enclosing paragraph range's.
+    fn range_format(&mut self, c: &El, pchars: &CharAttrs) -> CharFormat {
+        let style = c.get("AppliedCharacterStyle").map(|r| self.char_style_ref(r)).unwrap_or_else(|| st::NO_CHAR_STYLE.into());
+        let mut over = pchars.clone();
+        over.merge(&self.char_attrs(c));
+        CharFormat { style, over }
+    }
+
     fn walk_story(&mut self, e: &El, b: &mut StoryBuilder, pf: &ParaFormat, pchars: &CharAttrs, cf: &CharFormat, brk: Option<&str>) {
         for n in &e.children {
             match n {
@@ -1837,13 +1846,13 @@ impl<'r> Importer<'r> {
                         {
                             *last = npf.clone();
                         }
-                        self.walk_story(c, b, &npf, &chars, cf, None);
+                        // Text and markers outside any character range (a destination or a
+                        // cross-reference source at paragraph level) take the paragraph's format.
+                        let pcf = CharFormat { style: st::NO_CHAR_STYLE.into(), over: chars.clone() };
+                        self.walk_story(c, b, &npf, &chars, &pcf, None);
                     }
                     "CharacterStyleRange" => {
-                        let style = c.get("AppliedCharacterStyle").map(|r| self.char_style_ref(r)).unwrap_or_else(|| st::NO_CHAR_STYLE.into());
-                        let mut over = pchars.clone();
-                        over.merge(&self.char_attrs(c));
-                        let ncf = CharFormat { style, over };
+                        let ncf = self.range_format(c, pchars);
                         let bt = c.get("ParagraphBreakType").filter(|t| *t != "Anywhere");
                         b.last = ncf.clone();
                         self.walk_story(c, b, pf, pchars, &ncf, bt);
@@ -1907,11 +1916,9 @@ impl<'r> Importer<'r> {
                     "CrossReferenceSource" => {
                         // The generated text is regenerated from the format.
                         b.xrefs.push((c.get("Self").unwrap_or("").to_string(), c.get("AppliedFormat").unwrap_or("").to_string()));
-                        let inner = c.find("CharacterStyleRange");
-                        let f = match inner.and_then(|r| r.get("AppliedCharacterStyle")) {
-                            Some(r) => CharFormat { style: self.char_style_ref(r), over: pchars.clone() },
-                            None => cf.clone(),
-                        };
+                        // A source at paragraph level wraps a range; inside a range it holds the
+                        // text directly and takes that range's format.
+                        let f = c.find("CharacterStyleRange").map_or_else(|| cf.clone(), |r| self.range_format(r, pchars));
                         b.push(&designcraft_doc::XREF_MARK.to_string(), &f);
                     }
                     "Footnote" => {
diff --git a/crates/idml/src/tests.rs b/crates/idml/src/tests.rs
index 3cdb6d823..e22dd54fd 100644
--- a/crates/idml/src/tests.rs
+++ b/crates/idml/src/tests.rs
@@ -1039,6 +1039,44 @@ fn round_trips_cross_references() {
     assert_eq!(back.xref_formats.len(), d.xref_formats.len());
 }
 
+/// A cross-reference source sits either inside a character range (holding the text directly) or at
+/// paragraph level around a range. Both give the generated text the paragraph's and the range's
+/// attributes, so both set the same text at the same width.
+#[test]
+fn cross_reference_source_nesting_keeps_formatting() {
+    let story = |body: &str| {
+        format!(
+            r#"<?xml version="1.0" encoding="UTF-8"?>
+<idPkg:Story xmlns:idPkg="http://ns.adobe.com/AdobeInDesign/idml/1.0/packaging" DOMVersion="16.0">
+<Story Self="s1"><ParagraphStyleRange AppliedParagraphStyle="ParagraphStyle/$ID/NormalParagraphStyle" PointSize="11">{body}</ParagraphStyleRange></Story></idPkg:Story>"#
+        )
+    };
+    const CSR: &str = r#"<CharacterStyleRange AppliedCharacterStyle="CharacterStyle/$ID/[No character style]" Tracking="200">"#;
+    let inside = story(&format!(
+        r#"{CSR}<Content>See section </Content><CrossReferenceSource Self="x1" AppliedFormat="n"><Content>11.</Content></CrossReferenceSource><Content>, then a few more words to wrap.</Content></CharacterStyleRange>"#
+    ));
+    let around = story(&format!(
+        r#"{CSR}<Content>See section </Content></CharacterStyleRange><CrossReferenceSource Self="x1" AppliedFormat="n">{CSR}<Content>11.</Content></CharacterStyleRange></CrossReferenceSource>{CSR}<Content>, then a few more words to wrap.</Content></CharacterStyleRange>"#
+    ));
+    let compose = |xml: &str| {
+        let d = import_idml(&fixture_with_story(xml)).unwrap();
+        d.check().unwrap();
+        let s = d.stories.values().find(|s| !s.xrefs.is_empty()).expect("story with a cross-reference").clone();
+        let cs = designcraft_compose::compose_story(&d, s.id, &Default::default());
+        let glyphs: Vec<_> = cs.frames.iter().flat_map(|f| &f.lines).flat_map(|l| l.glyphs.iter().map(move |g| (g.byte, g.x, l.baseline))).collect();
+        (s, glyphs)
+    };
+    let (a, ga) = compose(&inside);
+    let (b, gb) = compose(&around);
+    assert!(ga.len() > a.text.chars().count() / 2, "the story composes");
+    assert_eq!(a.text, b.text);
+    assert_eq!(a.chars, b.chars);
+    assert_eq!(a.chars.len(), 1, "the generated text shares its neighbours' format");
+    assert_eq!(a.chars[0].format.over.tracking, Some(200.0));
+    assert_eq!(a.chars[0].format.over.size, Some(11.0));
+    assert_eq!(ga, gb);
+}
+
 #[test]
 fn round_trips_index_references() {
     use designcraft_doc::index::IndexRange;