diff --git a/spring-modulith-core/src/main/java/org/springframework/modulith/core/Classes.java b/spring-modulith-core/src/main/java/org/springframework/modulith/core/Classes.java
index 90bf2d3e..16eb52c0 100644
--- a/spring-modulith-core/src/main/java/org/springframework/modulith/core/Classes.java
+++ b/spring-modulith-core/src/main/java/org/springframework/modulith/core/Classes.java
@@ -38,7 +38,6 @@ import com.tngtech.archunit.base.DescribedPredicate;
 import com.tngtech.archunit.core.domain.JavaClass;
 import com.tngtech.archunit.core.domain.JavaClasses;
 import com.tngtech.archunit.core.domain.JavaModifier;
-import com.tngtech.archunit.core.domain.JavaType;
 import com.tngtech.archunit.core.domain.properties.HasName;
 
 /**
@@ -87,7 +86,8 @@ class Classes implements DescribedIterable<JavaClass> {
 	}
 
 	/**
-	 * Returns a {@link Collector} creating a {@link Classes} instance from a {@link Stream} of {@link JavaType}.
+	 * Returns a {@link Collector} creating a {@link Classes} instance from a {@link Stream} of
+	 * {@link com.tngtech.archunit.core.domain.JavaType}.
 	 *
 	 * @return will never be {@literal null}.
 	 */
@@ -110,6 +110,26 @@ class Classes implements DescribedIterable<JavaClass> {
 				.collect(Collectors.collectingAndThen(Collectors.toList(), Classes::new));
 	}
 
+	/**
+	 * Returns all classes that reside the given {@link PackageName}.
+	 *
+	 * @param name must not be {@literal null}.
+	 * @param nested whether to include nested packages
+	 * @return will never be {@literal null}.
+	 */
+	Classes thatResideIn(PackageName name, boolean nested) {
+
+		var result = new ArrayList<JavaClass>();
+
+		for (JavaClass candidate : classes) {
+			if (residesIn(name, candidate, nested)) {
+				result.add(candidate);
+			}
+		}
+
+		return new Classes(result);
+	}
+
 	Classes and(Classes classes) {
 		return and(classes.classes);
 	}
@@ -268,6 +288,13 @@ class Classes implements DescribedIterable<JavaClass> {
 		return format(type, "");
 	}
 
+	private static boolean residesIn(PackageName reference, JavaClass type, boolean inNested) {
+
+		var typesPackage = PackageName.ofType(type.getFullName());
+
+		return inNested ? reference.contains(typesPackage) : reference.equals(typesPackage);
+	}
+
 	private static class SameClass extends DescribedPredicate<JavaClass> {
 
 		private final JavaClass reference;
diff --git a/spring-modulith-core/src/main/java/org/springframework/modulith/core/JavaPackage.java b/spring-modulith-core/src/main/java/org/springframework/modulith/core/JavaPackage.java
index 977801f1..5f19c989 100644
--- a/spring-modulith-core/src/main/java/org/springframework/modulith/core/JavaPackage.java
+++ b/spring-modulith-core/src/main/java/org/springframework/modulith/core/JavaPackage.java
@@ -31,7 +31,6 @@ import java.util.SortedSet;
 import java.util.TreeMap;
 import java.util.TreeSet;
 import java.util.function.BiPredicate;
-import java.util.function.Predicate;
 import java.util.function.Supplier;
 import java.util.stream.Collectors;
 import java.util.stream.Stream;
@@ -73,7 +72,7 @@ public class JavaPackage implements DescribedIterable<JavaClass>, Comparable<Jav
 	 */
 	private JavaPackage(Classes classes, PackageName name, boolean includeSubPackages) {
 
-		this(classes.that(resideInAPackage(name.asFilter(includeSubPackages))), name, includeSubPackages
+		this(classes.thatResideIn(name, includeSubPackages), name, includeSubPackages
 				? SingletonSupplier.of(() -> detectSubPackages(classes, name))
 				: SingletonSupplier.of(JavaPackages.NONE));
 	}
@@ -92,7 +91,7 @@ public class JavaPackage implements DescribedIterable<JavaClass>, Comparable<Jav
 		Assert.notNull(name, "PackageName must not be null!");
 		Assert.notNull(subpackages, "Sub-packages must not be null!");
 
-		this.classes = classes.that(resideInAPackage(name.asFilter(true)));
+		this.classes = classes.thatResideIn(name, true);
 		this.name = name;
 		this.subPackages = subpackages;
 		this.directSubPackages = SingletonSupplier.of(() -> subPackages.get().stream()
@@ -206,15 +205,12 @@ public class JavaPackage implements DescribedIterable<JavaClass>, Comparable<Jav
 
 		Assert.notNull(annotation, "Annotation must not be null!");
 
-		return classes.that(ARE_PACKAGE_INFOS.and(are(metaAnnotatedWith(annotation)))).stream() //
-				.map(JavaClass::getPackageName) //
-				.filter(Predicate.not(name::hasName))
-				.distinct() //
-				.map(it -> of(classes, it));
+		return getSubPackages().stream()
+				.filter(it -> it.hasAnnotation(annotation));
 	}
 
 	/**
-	 * Returns all sub-packages that match the given {@link BiPredicate} for the canidate package and its trailing name
+	 * Returns all sub-packages that match the given {@link BiPredicate} for the candidate package and its trailing name
 	 * relative to the current one.
 	 *
 	 * @param filter must not be {@literal null}.
@@ -388,7 +384,7 @@ public class JavaPackage implements DescribedIterable<JavaClass>, Comparable<Jav
 
 	/**
 	 * Finds the annotation of the given type declared on the package itself or any type located the direct package's
-	 * types .
+	 * types.
 	 *
 	 * @param <A> the type of the annotation.
 	 * @param annotationType must not be {@literal null}.
@@ -502,6 +498,17 @@ public class JavaPackage implements DescribedIterable<JavaClass>, Comparable<Jav
 		return Objects.hash(classes, directSubPackages.get(), name);
 	}
 
+	/**
+	 * Returns whether the current {@link JavaPackage}
+	 *
+	 * @param <A>
+	 * @param annotationType
+	 * @return
+	 */
+	private <A extends Annotation> boolean hasAnnotation(Class<A> annotationType) {
+		return findAnnotation(annotationType).isPresent();
+	}
+
 	static Comparator<JavaPackage> reverse() {
 		return (left, right) -> -left.compareTo(right);
 	}
diff --git a/spring-modulith-core/src/test/java/org/springframework/modulith/core/ClassesUnitTests.java b/spring-modulith-core/src/test/java/org/springframework/modulith/core/ClassesUnitTests.java
new file mode 100644
index 00000000..af9cc0ab
--- /dev/null
+++ b/spring-modulith-core/src/test/java/org/springframework/modulith/core/ClassesUnitTests.java
@@ -0,0 +1,51 @@
+/*
+ * Copyright 2025 the original author or authors.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      https://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * 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.
+ */
+package org.springframework.modulith.core;
+
+import static org.assertj.core.api.Assertions.*;
+
+import example.Example;
+
+import org.junit.jupiter.api.Test;
+
+import com.tngtech.archunit.core.domain.JavaClass;
+
+/**
+ * Unit tests for {@link Classes}.
+ *
+ * @author Oliver Drotbohm
+ */
+class ClassesUnitTests {
+
+	@Test // GH-1098
+	void filtersClassesByPackageName() {
+
+		var classes = TestUtils.getClasses(Example.class);
+		var nestedDirectly = classes.thatResideIn(PackageName.of("example.ni.nested"), false);
+
+		assertThat(nestedDirectly)
+				.extracting(JavaClass::getSimpleName)
+				.contains("InNested")
+				.doesNotContain("InNestedA");
+
+		var nestedRecursive = classes.thatResideIn(PackageName.of("example.ni.nested"), true);
+
+		assertThat(nestedRecursive)
+				.extracting(JavaClass::getSimpleName)
+				.contains("InNested", "InNestedA")
+				.doesNotContain("ApiType");
+	}
+}