diff --git a/crates/render/src/shapes.rs b/crates/render/src/shapes.rs
index bd59ad83..f8de5a29 100644
--- a/crates/render/src/shapes.rs
+++ b/crates/render/src/shapes.rs
@@ -57,6 +57,10 @@ struct Draw {
     blend: BlendMode,
     /// Front / Bevel / Side / Back colours of the paint's extrusion (Advanced 3D).
     surfaces: SurfaceColors,
+    /// Paint item of the contents group this draw was collected in (as opposed to one bubbled up
+    /// from a nested group). Merge Paths drops only these paints above it (#1174); a group's own
+    /// fill or stroke keeps rendering inside the group.
+    local: bool,
 }
 
 /// Straight RGB colours of an extrusion's surfaces, by [`effectcraft_model::extrude::Surface`]
@@ -234,6 +238,7 @@ fn collect(ctx: &EvalCtx, layer: &Layer, contents: &PropGroup, arena: &mut Vec<B
                     opacity: opacity(g),
                     blend: blend_mode(ctx, layer, g),
                     surfaces: [None; 4],
+                    local: true,
                 });
             }
             "stroke" => {
@@ -247,6 +252,7 @@ fn collect(ctx: &EvalCtx, layer: &Layer, contents: &PropGroup, arena: &mut Vec<B
                     opacity: opacity(g),
                     blend: blend_mode(ctx, layer, g),
                     surfaces: [None; 4],
+                    local: true,
                 });
             }
             "gfill" | "gstroke" => {
@@ -270,6 +276,7 @@ fn collect(ctx: &EvalCtx, layer: &Layer, contents: &PropGroup, arena: &mut Vec<B
                     opacity: opacity(g),
                     blend: blend_mode(ctx, layer, g),
                     surfaces: [None; 4],
+                    local: true,
                 });
             }
             "trim" => {
@@ -328,8 +335,9 @@ fn collect(ctx: &EvalCtx, layer: &Layer, contents: &PropGroup, arena: &mut Vec<B
                 arena.push(ops::merge(&input, mode));
                 live = vec![arena.len() - 1];
                 // As in After Effects, fills and strokes above a Merge Paths in its group are not
-                // rendered: the merged path is painted by the paint items below it.
-                draws.clear();
+                // rendered: the merged path is painted by the paint items below it. Paint inside
+                // groups above the merge still renders — it belongs to those groups (#1174).
+                draws.retain(|d| !d.local);
             }
             "group" => {
                 let Some(inner) = g.sub("contents") else { continue };
@@ -341,6 +349,7 @@ fn collect(ctx: &EvalCtx, layer: &Layer, contents: &PropGroup, arena: &mut Vec<B
                 for mut d in cd {
                     d.xf = m * d.xf;
                     d.opacity *= op;
+                    d.local = false;
                     draws.push(d);
                 }
                 live.extend(cl);
diff --git a/crates/render/src/shapes/tests.rs b/crates/render/src/shapes/tests.rs
index 3946fc9d..1dbf67a7 100644
--- a/crates/render/src/shapes/tests.rs
+++ b/crates/render/src/shapes/tests.rs
@@ -76,6 +76,24 @@ fn merge_add_feeds_fill_below_and_drops_paint_above() {
     assert!((coverage(&img) - 80.0 * 40.0).abs() < 20.0, "{}", coverage(&img));
 }
 
+/// #1174: Adding Merge Paths to a shape layer's Contents, after the group that holds the
+/// shape and its paint, erased the render. The merge drops paints above it *in its group* —
+/// not paint that belongs to a group above it.
+#[test]
+fn merge_paths_below_a_group_keeps_the_group_paint() {
+    for mode in [0u32, 1] {
+        let (p, cid) = shape_comp(|ids| {
+            let rect = build::shape_rect(ids, [40.0, 40.0], [0.0, 0.0], 0.0);
+            let fill = build::shape_fill(ids, RED);
+            vec![build::shape_group(ids, "Group 1", vec![rect, fill]), op(ids, "merge", &[("mode", Value::Enum(mode))])]
+        });
+        let img = frame(&p, cid);
+        let c = img.get(100, 50);
+        assert!(c[0] > 0.99 && c[1] < 0.01 && c[3] > 0.99, "mode {mode}: group rectangle must still render, got {c:?}");
+        assert!((coverage(&img) - 40.0 * 40.0).abs() < 20.0, "mode {mode}: {}", coverage(&img));
+    }
+}
+
 #[test]
 fn merge_subtract_and_intersect() {
     let sub = |mode: u32| {