diff --git a/packages/transaction-controller/CHANGELOG.md b/packages/transaction-controller/CHANGELOG.md
index 4bed644e8d..979a313dff 100644
--- a/packages/transaction-controller/CHANGELOG.md
+++ b/packages/transaction-controller/CHANGELOG.md
@@ -17,6 +17,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Include Mantle operator fee in the displayed L1 gas estimate when simulated `gasUsed` is unavailable, by falling back to the transaction's gas limit ([#8837](https://github.com/MetaMask/core/pull/8837))
   - Adds a `protected getOperatorFeeGas` hook on `OracleLayer1GasFeeFlow` that subclasses can override to supply a fallback value. The default behaviour is unchanged (returns `transactionMeta.gasUsed`).
   - `MantleLayer1GasFeeFlow` overrides the hook with `gasUsed ?? txParams.gas ?? txParams.gasLimit`, so the operator-fee oracle is called with the gas limit when `gasUsed` is missing. Gas limit is an upper bound on actual gas used, so the operator fee is over-estimated rather than under-reported.
+- Fix `ExtraTransactionsPublishHook` not passing `isInternal: true` when calling `addTransactionBatch`, causing the duplicate-batch-ID guard to incorrectly throw `DuplicateBundleId` (error 5720) for nested ERC-20 gas-fee-token transfers that share a `batchId` with their parent batch ([#8884](https://github.com/MetaMask/core/pull/8884))
 
 ## [66.0.0]
 
diff --git a/packages/transaction-controller/src/TransactionController.test.ts b/packages/transaction-controller/src/TransactionController.test.ts
index 1c53dc6808..12d4f2b8a2 100644
--- a/packages/transaction-controller/src/TransactionController.test.ts
+++ b/packages/transaction-controller/src/TransactionController.test.ts
@@ -3739,6 +3739,36 @@ describe('TransactionController', () => {
           networkClientId: NETWORK_CLIENT_ID_MOCK,
         });
       });
+
+      it('does not throw if duplicate and isInternal is true', async () => {
+        const { controller } = setupController({
+          options: {
+            state: {
+              transactions: [
+                {
+                  batchId: BATCH_ID_MOCK,
+                } as unknown as TransactionMeta,
+              ],
+            },
+          },
+          updateToInitialState: true,
+        });
+
+        const txParams = {
+          from: ACCOUNT_MOCK,
+          to: ACCOUNT_MOCK,
+        };
+
+        const { result } = await controller.addTransaction(txParams, {
+          batchId: BATCH_ID_MOCK,
+          isInternal: true,
+          networkClientId: NETWORK_CLIENT_ID_MOCK,
+          origin: ORIGIN_MOCK,
+          requireApproval: false,
+        });
+
+        await result.catch(() => undefined);
+      });
     });
   });
 
diff --git a/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.test.ts b/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.test.ts
index 86652d382e..e950de03df 100644
--- a/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.test.ts
+++ b/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.test.ts
@@ -121,6 +121,7 @@ describe('ExtraTransactionsPublishHook', () => {
       disable7702: true,
       disableHook: false,
       disableSequential: true,
+      isInternal: true,
       requireApproval: false,
     });
   });
diff --git a/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.ts b/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.ts
index 6aaf6c5e95..3c1e240634 100644
--- a/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.ts
+++ b/packages/transaction-controller/src/hooks/ExtraTransactionsPublishHook.ts
@@ -164,6 +164,7 @@ export class ExtraTransactionsPublishHook {
 
     await this.#addTransactionBatch({
       from,
+      isInternal: true,
       networkClientId,
       requireApproval: false,
       transactions,