diff --git a/crates/spk-schema/crates/foundation/src/version/compat.rs b/crates/spk-schema/crates/foundation/src/version/compat.rs
index f8e537d8a4..ccf711751c 100644
--- a/crates/spk-schema/crates/foundation/src/version/compat.rs
+++ b/crates/spk-schema/crates/foundation/src/version/compat.rs
@@ -90,6 +90,10 @@ impl Ord for CompatRule {
 /// Denotes whether or not something is compatible.
 #[derive(Clone, Debug, Eq, PartialEq)]
 pub enum IncompatibleReason {
+    AlreadyEmbeddedPackage {
+        embedded: PkgNameBuf,
+        embedded_by: PkgNameBuf,
+    },
     ConflictingEmbeddedPackage(PkgNameBuf),
     Other(String),
 }
@@ -97,6 +101,15 @@ pub enum IncompatibleReason {
 impl std::fmt::Display for IncompatibleReason {
     fn fmt(&self, f: &mut std::fmt::Formatter) -> std::fmt::Result {
         match self {
+            IncompatibleReason::AlreadyEmbeddedPackage {
+                embedded,
+                embedded_by,
+            } => {
+                write!(
+                    f,
+                    "embedded package {embedded} already embedded by another package in solve: {embedded_by}"
+                )
+            }
             IncompatibleReason::ConflictingEmbeddedPackage(pkg) => {
                 write!(
                     f,
diff --git a/crates/spk-solve/src/solver.rs b/crates/spk-solve/src/solver.rs
index 53fe02192e..4614fadb55 100644
--- a/crates/spk-solve/src/solver.rs
+++ b/crates/spk-solve/src/solver.rs
@@ -643,13 +643,44 @@ impl Solver {
                                 // solve. Jump back to before the conflicting
                                 // package was added and try adding this
                                 // build again.
-                                let (_, _, state_id) = node
+                                let (conflicting_pkg, conflicting_pkg_source, state_id) = node
                                     .state
                                     .get_current_resolve(&conflicting_package_name)
                                     .map_err(|_| {
                                         Error::String("package not found in resolve".into())
                                     })?;
 
+                                // Is the conflicting package already embedded
+                                // by some other package?
+                                if conflicting_pkg.ident().is_embedded() {
+                                    notes.push(Note::SkipPackageNote(SkipPackageNote::new(
+                                        spec.ident().to_any(),
+                                        Compatibility::Incompatible({
+                                            match conflicting_pkg_source {
+                                                PackageSource::Embedded { parent } => {
+                                                    IncompatibleReason::AlreadyEmbeddedPackage {
+                                                        embedded: conflicting_package_name,
+                                                        embedded_by: parent.name().to_owned(),
+                                                    }
+                                                }
+                                                _ => {
+                                                    // As the solver exhausts
+                                                    // all possibilities it
+                                                    // eventually tries to
+                                                    // resolve an embedded stub
+                                                    // for a package that is
+                                                    // already in the solve.
+                                                    IncompatibleReason::ConflictingEmbeddedPackage(
+                                                        conflicting_package_name,
+                                                    )
+                                                }
+                                            }
+                                        }),
+                                    )));
+                                    self.number_builds_skipped += 1;
+                                    continue;
+                                }
+
                                 let graph_lock = graph.read().await;
 
                                 let target_state_node = graph_lock
diff --git a/crates/spk-solve/src/solver_test.rs b/crates/spk-solve/src/solver_test.rs
index 84d53b4fdd..79de61e10d 100644
--- a/crates/spk-solve/src/solver_test.rs
+++ b/crates/spk-solve/src/solver_test.rs
@@ -1421,6 +1421,62 @@ async fn test_solver_impossible_request_but_embedded_package_makes_solvable(mut
     };
 }
 
+/// When multiple packages try to embed the same package the solver doesn't
+/// panic.
+#[rstest]
+#[tokio::test]
+async fn test_multiple_packages_embed_same_package(
+    mut solver: Solver,
+    #[values(true, false)] resolve_validation_impossible_checks: bool,
+) {
+    init_logging();
+
+    let repo = make_repo!(
+        [
+            {
+                "pkg": "embedded-pkg/1.0.0",
+                "build": {"script": "echo BUILD"},
+            },
+            {
+                "pkg": "dep1/1.0.0",
+                "build": {"script": "echo BUILD"},
+                "install": {"embedded": [{"pkg": "embedded-pkg/1.0.0"}]},
+            },
+            {
+                "pkg": "dep2/1.0.0",
+                "build": {"script": "echo BUILD"},
+                "install": {"embedded": [{"pkg": "embedded-pkg/1.0.0"}]},
+            },
+            {
+                "pkg": "top-level/1.0.0",
+                "build": {"script": "echo BUILD"},
+                "install": {"requirements": [
+                    // Resolve the "real" package first
+                    {"pkg": "embedded-pkg"},
+                    // dep1 embeds 'embedded-pkg' and should eject the real one
+                    {"pkg": "dep1"},
+                    // dep2 also embeds 'embedded-pkg' and in the past would
+                    // cause the solver to panic
+                    {"pkg": "dep2"}]},
+            },
+        ]
+    );
+
+    solver.add_repository(Arc::new(repo));
+    solver.add_request(request!("top-level"));
+    solver.set_resolve_validation_impossible_checks(resolve_validation_impossible_checks);
+
+    match run_and_print_resolve_for_tests(&solver).await {
+        Err(Error::GraphError(spk_solve_graph::Error::FailedToResolve(_))) => {}
+        Ok(_) => {
+            panic!("No solution expected");
+        }
+        Err(err) => {
+            panic!("Expected FailedToResolve, but got this error: {err}");
+        }
+    };
+}
+
 #[rstest]
 #[tokio::test]
 async fn test_solver_with_impossible_checks_in_build_keys(mut solver: Solver) {