diff --git a/app/models/group.rb b/app/models/group.rb
index edac2444c4d..22814e35ca8 100644
--- a/app/models/group.rb
+++ b/app/models/group.rb
@@ -382,6 +382,10 @@ class Group < Namespace
     end
   end
 
+  def highest_group_member(user)
+    GroupMember.where(source_id: self_and_ancestors_ids, user_id: user.id).order(:access_level).last
+  end
+
   def hashed_storage?(_feature)
     false
   end
diff --git a/changelogs/unreleased/api-nested-group-permission.yml b/changelogs/unreleased/api-nested-group-permission.yml
new file mode 100644
index 00000000000..3ec0df6893f
--- /dev/null
+++ b/changelogs/unreleased/api-nested-group-permission.yml
@@ -0,0 +1,5 @@
+---
+title: Return the maximum group access level in the projects API
+merge_request: 24403
+author:
+type: changed
diff --git a/lib/api/entities.rb b/lib/api/entities.rb
index 57a48d0c0fa..97b421e8651 100644
--- a/lib/api/entities.rb
+++ b/lib/api/entities.rb
@@ -964,7 +964,7 @@ module API
             if options[:group_members]
               options[:group_members].find { |member| member.source_id == project.namespace_id }
             else
-              project.group.group_member(options[:current_user])
+              project.group.highest_group_member(options[:current_user])
             end
           end
         end
diff --git a/spec/models/group_spec.rb b/spec/models/group_spec.rb
index e63881242f6..9dc32a815d8 100644
--- a/spec/models/group_spec.rb
+++ b/spec/models/group_spec.rb
@@ -722,6 +722,42 @@ describe Group do
     end
   end
 
+  describe '#highest_group_member', :nested_groups do
+    let(:nested_group) { create(:group, parent: group) }
+    let(:nested_group_2) { create(:group, parent: nested_group) }
+    let(:user) { create(:user) }
+
+    subject(:highest_group_member) { nested_group_2.highest_group_member(user) }
+
+    context 'when the user is not a member of any group in the hierarchy' do
+      it 'returns nil' do
+        expect(highest_group_member).to be_nil
+      end
+    end
+
+    context 'when the user is only a member of one group in the hierarchy' do
+      before do
+        nested_group.add_developer(user)
+      end
+
+      it 'returns that group member' do
+        expect(highest_group_member.access_level).to eq(Gitlab::Access::DEVELOPER)
+      end
+    end
+
+    context 'when the user is a member of several groups in the hierarchy' do
+      before do
+        group.add_owner(user)
+        nested_group.add_developer(user)
+        nested_group_2.add_maintainer(user)
+      end
+
+      it 'returns the group member with the highest access level' do
+        expect(highest_group_member.access_level).to eq(Gitlab::Access::OWNER)
+      end
+    end
+  end
+
   describe '#has_parent?' do
     context 'when the group has a parent' do
       it 'should be truthy' do
diff --git a/spec/requests/api/projects_spec.rb b/spec/requests/api/projects_spec.rb
index a01b494f615..7248908b494 100644
--- a/spec/requests/api/projects_spec.rb
+++ b/spec/requests/api/projects_spec.rb
@@ -1147,6 +1147,40 @@ describe API::Projects do
             .to eq(Gitlab::Access::OWNER)
           end
         end
+
+        context 'nested group project', :nested_groups do
+          let(:group) { create(:group) }
+          let(:nested_group) { create(:group, parent: group) }
+          let(:project2) { create(:project, group: nested_group) }
+
+          before do
+            project2.group.parent.add_owner(user)
+          end
+
+          it 'sets group access and return 200' do
+            get api("/projects/#{project2.id}", user)
+
+            expect(response).to have_gitlab_http_status(200)
+            expect(json_response['permissions']['project_access']).to be_nil
+            expect(json_response['permissions']['group_access']['access_level'])
+            .to eq(Gitlab::Access::OWNER)
+          end
+
+          context 'with various access levels across nested groups' do
+            before do
+              project2.group.add_maintainer(user)
+            end
+
+            it 'sets the maximum group access and return 200' do
+              get api("/projects/#{project2.id}", user)
+
+              expect(response).to have_gitlab_http_status(200)
+              expect(json_response['permissions']['project_access']).to be_nil
+              expect(json_response['permissions']['group_access']['access_level'])
+              .to eq(Gitlab::Access::OWNER)
+            end
+          end
+        end
       end
     end
   end