diff --git a/CHANGELOG.adoc b/CHANGELOG.adoc
index 8d30e5a349fa699c9d617051d20e1593b94b978b..da97c34fec30ce1f04ffa22eb5b970b8d69e7603 100644
--- a/CHANGELOG.adoc
+++ b/CHANGELOG.adoc
@@ -6,9 +6,14 @@ For a detailed view of what's changed, refer to the {url-repo}/commits[commit hi
 
 == Unreleased
 
+=== Change
+
+* log warning message if include directive to reduce cannot be found
+
 === Fixed
 
 * reify leveloffset to handle cases when leveloffset is set outside of document header
+* properly reduce include directives that use the `leveloffset` attribute (#9)
 
 == 1.0.0-alpha.5 (2022-07-24)
 
diff --git a/packages/assembler/lib/asciidoctor/reducer-extension.js b/packages/assembler/lib/asciidoctor/reducer-extension.js
index 064812ce0cfec731b8725133ea167c979780f5b6..0faaa3b080efffc775b779f9a23acdd11fd8d6b4 100644
--- a/packages/assembler/lib/asciidoctor/reducer-extension.js
+++ b/packages/assembler/lib/asciidoctor/reducer-extension.js
@@ -121,6 +121,7 @@ const IncludeDirectiveTracker = (() => {
     this.$$reducer.includePushed = true
     const directiveLineno = this.lineno - 1 // we're below the include line, which is 1-based
     const prevIncDepth = this.include_stack.length
+    let offset = lineno > 1 ? lineno - 1 : 0
     const result = Opal.send(this, Opal.find_super_dispatcher(this, 'push_include', pushInclude), [
       data,
       file,
@@ -128,12 +129,12 @@ const IncludeDirectiveTracker = (() => {
       lineno,
       attrs,
     ])
-    pushIncludeReplacement.call(
-      this,
-      directiveLineno,
-      this.include_stack.length > prevIncDepth ? this.$lines() : [],
-      lineno > 1 ? lineno - 1 : 0
-    )
+    let incLines = []
+    if (this.include_stack.length > prevIncDepth) {
+      incLines = this.$lines()
+      if (attrs['$key?']('leveloffset') && incLines[0].startsWith(':leveloffset: ') && incLines[1] === '') offset -= 2
+    }
+    pushIncludeReplacement.call(this, directiveLineno, incLines, offset)
     return result
   })
 
@@ -174,8 +175,12 @@ function treeProcessor () {
           let targetLines, idx
           if (into != null) {
             targetLines = incReplacements[into].lines
-            // adds assurance that we're replacing the correct line
-            if (targetLines[(idx = lineno - 1)] !== line) return
+            // adds extra assurance that the program is replacing the correct line
+            if (targetLines[(idx = lineno - 1)] !== line) {
+              const msg = `include directive to reduce not found; expected: "${line}"; got: "${targetLines[idx]}"`
+              doc.getLogger().error(msg)
+              return
+            }
           }
           if ((drop || []).length) {
             drop
diff --git a/packages/assembler/test/produce-aggregate-documents-test.js b/packages/assembler/test/produce-aggregate-documents-test.js
index 4a26506550b8a8186513248206afc6a239b74b0e..9bd49ad208e4a6a8d6543ac2cbab94d23f4bc489 100644
--- a/packages/assembler/test/produce-aggregate-documents-test.js
+++ b/packages/assembler/test/produce-aggregate-documents-test.js
@@ -74,6 +74,10 @@ describe('produceAggregateDocuments()', () => {
     await runScenario('expand-nested-include', __dirname)
   })
 
+  it('should expand nested include with leveloffset', async () => {
+    await runScenario('expand-nested-include-leveloffset', __dirname)
+  })
+
   it('should evaluate preprocessor conditional', async () => {
     await runScenario('evaluate-preprocessor-conditional', __dirname)
   })
diff --git a/packages/assembler/test/scenarios/expand-nested-include-leveloffset/data.yml b/packages/assembler/test/scenarios/expand-nested-include-leveloffset/data.yml
new file mode 100644
index 0000000000000000000000000000000000000000..21f162026846b32d119b758ecd0f8501bd140618
--- /dev/null
+++ b/packages/assembler/test/scenarios/expand-nested-include-leveloffset/data.yml
@@ -0,0 +1,33 @@
+name: the-component
+version: '1.0'
+title: The Component
+navigation:
+  items:
+  - content: xref:the-page.adoc[The Page Title]
+files:
+- relative: the-page.adoc
+  contents: |-
+    = The Page Title
+
+    == Section
+
+    include::_sections.adoc[leveloffset=+1]
+
+    == Another Section
+- relative: _sections.adoc
+  contents: |-
+    == Subsection
+
+    include::_content.adoc[]
+
+    === Nested Subsection
+
+    include::_more-content.adoc[]
+- relative: _content.adoc
+  contents: |-
+    A paragraph.
+- relative: _more-content.adoc
+  contents: |-
+    Another paragraph.
+
+    And yet another.
diff --git a/packages/assembler/test/scenarios/expand-nested-include-leveloffset/expects/the-component.adoc b/packages/assembler/test/scenarios/expand-nested-include-leveloffset/expects/the-component.adoc
new file mode 100644
index 0000000000000000000000000000000000000000..4f337c5dee7972bc317ee132167abb29ad08835d
--- /dev/null
+++ b/packages/assembler/test/scenarios/expand-nested-include-leveloffset/expects/the-component.adoc
@@ -0,0 +1,37 @@
+= The Component
+v1.0
+:doctype: book
+:page-component-name: the-component
+:page-component-version: 1.0
+:page-version: {page-component-version}
+:page-component-display-version: 1.0
+:page-component-title: The Component
+
+:docname: the-page
+:page-module: ROOT
+:page-relative-src-path: the-page.adoc
+:page-origin-url: https://github.com/acme/the-component
+:page-origin-start-path:
+:page-origin-refname: v1.0
+:page-origin-reftype: branch
+:page-origin-refhash: a00000000000000000000000000000000000000z
+[#the-page:::]
+== The Page Title
+
+[discrete#the-page:::_section]
+=== Section
+
+[discrete#the-page:::_subsection]
+==== Subsection
+
+A paragraph.
+
+[discrete#the-page:::_nested_subsection]
+===== Nested Subsection
+
+Another paragraph.
+
+And yet another.
+
+[discrete#the-page:::_another_section]
+=== Another Section