diff --git a/cirq-core/cirq/transformers/eject_z.py b/cirq-core/cirq/transformers/eject_z.py
index 7ebd12e1047..fc22718d06f 100644
--- a/cirq-core/cirq/transformers/eject_z.py
+++ b/cirq-core/cirq/transformers/eject_z.py
@@ -43,7 +43,7 @@ def _is_swaplike(gate: 'cirq.Gate'):
     return False
 
 
-@transformer_api.transformer
+@transformer_api.transformer(add_deep_support=True)
 def eject_z(
     circuit: 'cirq.AbstractCircuit',
     *,
@@ -96,7 +96,7 @@ def map_func(op: 'cirq.Operation', moment_index: int) -> 'cirq.OP_TREE':
         gate = op.gate
         # Return if circuit operation.
         if gate is None:
-            return op
+            return [dump_tracked_phase(op.qubits), op]
 
         # Swap phases if `op` is a swap operation.
         if _is_swaplike(gate):
diff --git a/cirq-core/cirq/transformers/eject_z_test.py b/cirq-core/cirq/transformers/eject_z_test.py
index ca8743a35f1..d5bf72931fb 100644
--- a/cirq-core/cirq/transformers/eject_z_test.py
+++ b/cirq-core/cirq/transformers/eject_z_test.py
@@ -11,6 +11,9 @@
 # WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
 # See the License for the specific language governing permissions and
 # limitations under the License.
+
+import dataclasses
+
 import pytest
 import numpy as np
 import sympy
@@ -39,6 +42,33 @@ def assert_optimizes(
     circuit = cirq.eject_z(before, eject_parameterized=eject_parameterized, context=context)
     cirq.testing.assert_same_circuits(circuit, expected)
 
+    # Nested sub-circuits should also get optimized.
+    q = before.all_qubits()
+    c_nested = cirq.Circuit(
+        [(cirq.Z ** 0.5).on_each(*q), (cirq.Y ** 0.25).on_each(*q)],
+        cirq.Moment(cirq.CircuitOperation(before.freeze()).repeat(2).with_tags("ignore")),
+        [(cirq.Z ** 0.5).on_each(*q), (cirq.Y ** 0.25).on_each(*q)],
+        cirq.Moment(cirq.CircuitOperation(before.freeze()).repeat(3).with_tags("preserve_tag")),
+    )
+    c_expected = cirq.Circuit(
+        cirq.PhasedXPowGate(phase_exponent=0, exponent=0.25).on_each(*q),
+        (cirq.Z ** 0.5).on_each(*q),
+        cirq.Moment(cirq.CircuitOperation(before.freeze()).repeat(2).with_tags("ignore")),
+        cirq.PhasedXPowGate(phase_exponent=0, exponent=0.25).on_each(*q),
+        (cirq.Z ** 0.5).on_each(*q),
+        cirq.Moment(cirq.CircuitOperation(expected.freeze()).repeat(3).with_tags("preserve_tag")),
+    )
+    if context is None:
+        context = cirq.TransformerContext(tags_to_ignore=("ignore",), deep=True)
+    else:
+        context = dataclasses.replace(
+            context, tags_to_ignore=context.tags_to_ignore + ("ignore",), deep=True
+        )
+    c_nested = cirq.eject_z(c_nested, context=context, eject_parameterized=eject_parameterized)
+    cirq.testing.assert_same_circuits(c_nested, c_expected)
+    c_nested = cirq.eject_z(c_nested, context=context, eject_parameterized=eject_parameterized)
+    cirq.testing.assert_same_circuits(c_nested, c_expected)
+
 
 def assert_removes_all_z_gates(circuit: cirq.Circuit, eject_parameterized: bool = True):
     optimized = cirq.eject_z(circuit, eject_parameterized=eject_parameterized)