diff --git a/crates/wac-parser/src/resolution/ast.rs b/crates/wac-parser/src/resolution/ast.rs
index 2c717b6..2fcc2be 100644
--- a/crates/wac-parser/src/resolution/ast.rs
+++ b/crates/wac-parser/src/resolution/ast.rs
@@ -1768,28 +1768,6 @@ impl<'a> AstResolver<'a> {
     ) -> ResolutionResult<ItemId> {
         assert!(state.scopes.is_empty());
 
-        // If the item is an instance, we need to recurse on its dependencies
-        if let ItemKind::Instance(id) = kind {
-            let interface = &self.definitions.interfaces[id];
-            let deps = interface
-                .uses
-                .keys()
-                .map(|id| {
-                    (
-                        *id,
-                        self.definitions.interfaces[*id]
-                            .id
-                            .as_ref()
-                            .unwrap()
-                            .clone(),
-                    )
-                })
-                .collect::<Vec<_>>();
-            for (dep, name) in deps {
-                self.implicit_import(state, name, ItemKind::Instance(dep), package, span)?;
-            }
-        }
-
         if let Some(import) = state.imports.get(&name) {
             // Check if the implicit import would conflict with an explicit import
             if import.package.is_none() {
diff --git a/crates/wac-parser/src/resolution/encoding.rs b/crates/wac-parser/src/resolution/encoding.rs
index 78196e8..c538d43 100644
--- a/crates/wac-parser/src/resolution/encoding.rs
+++ b/crates/wac-parser/src/resolution/encoding.rs
@@ -167,6 +167,13 @@ impl<'a> Encoder<'a> {
             ItemKind::Type(ty) => ComponentTypeRef::Type(TypeBounds::Eq(encoder.ty(state, ty)?)),
             ItemKind::Func(id) => ComponentTypeRef::Func(encoder.ty(state, Type::Func(id))?),
             ItemKind::Instance(id) => {
+                // Check to see if the instance has already been imported
+                // This may occur when an interface uses another
+                if let Some(index) = state.current.instances.get(&id) {
+                    log::debug!("skipping import of interface {id} as it was already imported with instance index {index}", id = id.index());
+                    return Ok(*index);
+                }
+
                 ComponentTypeRef::Instance(encoder.ty(state, Type::Interface(id))?)
             }
             ItemKind::Component(id) => {
@@ -710,7 +717,7 @@ impl<'a> TypeEncoder<'a> {
 
         log::debug!("encoding dependency on interface {id}", id = id.index());
 
-        let index = self.instance(state, id, true)?;
+        let index = self.instance(state, id, !state.scopes.is_empty())?;
         let import_index = state.current.encodable.instance_count();
 
         state