diff --git a/clang/lib/Sema/SemaTemplate.cpp b/clang/lib/Sema/SemaTemplate.cpp
index 2fce2238f9c10b..480c0103ae335a 100644
--- a/clang/lib/Sema/SemaTemplate.cpp
+++ b/clang/lib/Sema/SemaTemplate.cpp
@@ -2492,9 +2492,6 @@ struct ConvertConstructorToDeductionGuideTransform {
       Args.addOuterRetainedLevel();
     }
 
-    if (NestedPattern)
-      Args.addOuterRetainedLevels(NestedPattern->getTemplateDepth());
-
     FunctionProtoTypeLoc FPTL = CD->getTypeSourceInfo()->getTypeLoc()
                                    .getAsAdjusted<FunctionProtoTypeLoc>();
     assert(FPTL && "no prototype for constructor declaration");
@@ -2584,11 +2581,27 @@ struct ConvertConstructorToDeductionGuideTransform {
 
     //    -- The types of the function parameters are those of the constructor.
     for (auto *OldParam : TL.getParams()) {
-      ParmVarDecl *NewParam =
-          transformFunctionTypeParam(OldParam, Args, MaterializedTypedefs);
-      if (NestedPattern && NewParam)
+      ParmVarDecl *NewParam = OldParam;
+      // Given
+      //   template <class T> struct C {
+      //     template <class U> struct D {
+      //       template <class V> D(U, V);
+      //     };
+      //   };
+      // First, transform all the references to template parameters that are
+      // defined outside of the surrounding class template. That is T in the
+      // above example.
+      if (NestedPattern) {
         NewParam = transformFunctionTypeParam(NewParam, OuterInstantiationArgs,
                                               MaterializedTypedefs);
+        if (!NewParam)
+          return QualType();
+      }
+      // Then, transform all the references to template parameters that are
+      // defined at the class template and the constructor. In this example,
+      // they're U and V, respectively.
+      NewParam =
+          transformFunctionTypeParam(NewParam, Args, MaterializedTypedefs);
       if (!NewParam)
         return QualType();
       ParamTypes.push_back(NewParam->getType());
diff --git a/clang/test/SemaTemplate/nested-implicit-deduction-guides.cpp b/clang/test/SemaTemplate/nested-implicit-deduction-guides.cpp
index 38b6706595a116..f289dc0452868b 100644
--- a/clang/test/SemaTemplate/nested-implicit-deduction-guides.cpp
+++ b/clang/test/SemaTemplate/nested-implicit-deduction-guides.cpp
@@ -84,3 +84,17 @@ nested_init_list<int>::concept_fail nil_invalid{1, ""};
 // expected-note@#INIT_LIST_INNER_INVALID {{candidate template ignored: substitution failure [with F = const char *]: constraints not satisfied for class template 'concept_fail' [with F = const char *]}}
 // expected-note@#INIT_LIST_INNER_INVALID {{candidate function template not viable: requires 1 argument, but 2 were provided}}
 // expected-note@#INIT_LIST_INNER_INVALID {{candidate function template not viable: requires 0 arguments, but 2 were provided}}
+
+namespace GH88142 {
+
+template <typename, typename...> struct X {
+  template <typename> struct Y {
+    template <typename T> Y(T) {}
+  };
+
+  template <typename T> Y(T) -> Y<T>;
+};
+
+X<int>::Y y(42);
+
+} // namespace PR88142