diff --git a/plugins/ui/src/js/src/layout/Column.test.tsx b/plugins/ui/src/js/src/layout/Column.test.tsx
new file mode 100644
index 000000000..5ad13b7bc
--- /dev/null
+++ b/plugins/ui/src/js/src/layout/Column.test.tsx
@@ -0,0 +1,69 @@
+import React from 'react';
+import { render, screen } from '@testing-library/react';
+import type { DashboardLayoutConfig } from '@deephaven/dashboard';
+import Column from './Column';
+import { ReactPanelContext } from './ReactPanelContext';
+import { InitialLayoutConfigContext } from './InitialLayoutConfigContext';
+import { wrapBareChildrenInPanel } from './LayoutUtils';
+
+// Mock Flex so we can detect the "inside a panel" branch without pulling in the
+// full Spectrum provider stack.
+jest.mock('@deephaven/components', () => ({
+  ...jest.requireActual('@deephaven/components'),
+  Flex: ({ children }: { children: React.ReactNode }) => (
+    <div data-testid="flex">{children}</div>
+  ),
+}));
+
+// Spy on wrapBareChildrenInPanel so we can assert the rehydration branch is not
+// taken when we're inside a panel.
+jest.mock('./LayoutUtils', () => ({
+  ...jest.requireActual('./LayoutUtils'),
+  wrapBareChildrenInPanel: jest.fn((children: React.ReactNode) => children),
+}));
+
+const mockLayoutConfig = [
+  { type: 'row', content: [] },
+] as unknown as DashboardLayoutConfig;
+
+beforeEach(() => {
+  jest.clearAllMocks();
+});
+
+it('renders as a Flex when inside a panel, even during rehydration (DH-23205)', () => {
+  // Regression: a ui.column used as the content of a ui.panel must render as a
+  // Flex, not wrap its bare children in a nested panel, which would throw a
+  // NestedPanelError. This must hold even when an initial layout config exists.
+  render(
+    <ReactPanelContext.Provider value="test-panel-id">
+      <InitialLayoutConfigContext.Provider value={mockLayoutConfig}>
+        <Column width={100}>hello</Column>
+      </InitialLayoutConfigContext.Provider>
+    </ReactPanelContext.Provider>
+  );
+
+  expect(screen.getByTestId('flex')).toHaveTextContent('hello');
+  expect(wrapBareChildrenInPanel).not.toHaveBeenCalled();
+});
+
+it('renders as a Flex when inside a panel with no initial layout config', () => {
+  render(
+    <ReactPanelContext.Provider value="test-panel-id">
+      <Column width={100}>hello</Column>
+    </ReactPanelContext.Provider>
+  );
+
+  expect(screen.getByTestId('flex')).toHaveTextContent('hello');
+  expect(wrapBareChildrenInPanel).not.toHaveBeenCalled();
+});
+
+it('wraps bare children in a panel during rehydration when not inside a panel', () => {
+  render(
+    <InitialLayoutConfigContext.Provider value={mockLayoutConfig}>
+      <Column width={100}>hello</Column>
+    </InitialLayoutConfigContext.Provider>
+  );
+
+  expect(screen.queryByTestId('flex')).not.toBeInTheDocument();
+  expect(wrapBareChildrenInPanel).toHaveBeenCalled();
+});
diff --git a/plugins/ui/src/js/src/layout/Column.tsx b/plugins/ui/src/js/src/layout/Column.tsx
index fa5b7a74e..eab2ef495 100644
--- a/plugins/ui/src/js/src/layout/Column.tsx
+++ b/plugins/ui/src/js/src/layout/Column.tsx
@@ -50,6 +50,18 @@ function LayoutColumn({
 function Column({ children, width }: ColumnElementProps): JSX.Element {
   const panelId = usePanelId();
   const initialLayoutConfig = useInitialLayoutConfig();
+
+  if (panelId != null) {
+    // We're inside a panel (e.g. ui.panel(ui.column(...))), so render as a Flex
+    // regardless of any persisted layout. Wrapping bare children in a panel here
+    // would nest a panel inside a panel and throw a NestedPanelError.
+    return (
+      <Flex width={`${width}%`} direction="column">
+        {children}
+      </Flex>
+    );
+  }
+
   if (initialLayoutConfig != null) {
     // If there's already an initial layout defined, user has likely already customized their layout.
     // Don't add a column here, or normalize the children which might add a stack unnecessarily.
@@ -59,15 +71,7 @@ function Column({ children, width }: ColumnElementProps): JSX.Element {
     return <>{wrapBareChildrenInPanel(children)}</>;
   }
 
-  if (panelId == null) {
-    return <LayoutColumn width={width}>{children}</LayoutColumn>;
-  }
-
-  return (
-    <Flex width={`${width}%`} direction="column">
-      {children}
-    </Flex>
-  );
+  return <LayoutColumn width={width}>{children}</LayoutColumn>;
 }
 
 export default Column;
diff --git a/plugins/ui/src/js/src/layout/Row.test.tsx b/plugins/ui/src/js/src/layout/Row.test.tsx
new file mode 100644
index 000000000..afa4d437d
--- /dev/null
+++ b/plugins/ui/src/js/src/layout/Row.test.tsx
@@ -0,0 +1,69 @@
+import React from 'react';
+import { render, screen } from '@testing-library/react';
+import type { DashboardLayoutConfig } from '@deephaven/dashboard';
+import Row from './Row';
+import { ReactPanelContext } from './ReactPanelContext';
+import { InitialLayoutConfigContext } from './InitialLayoutConfigContext';
+import { wrapBareChildrenInPanel } from './LayoutUtils';
+
+// Mock Flex so we can detect the "inside a panel" branch without pulling in the
+// full Spectrum provider stack.
+jest.mock('@deephaven/components', () => ({
+  ...jest.requireActual('@deephaven/components'),
+  Flex: ({ children }: { children: React.ReactNode }) => (
+    <div data-testid="flex">{children}</div>
+  ),
+}));
+
+// Spy on wrapBareChildrenInPanel so we can assert the rehydration branch is not
+// taken when we're inside a panel.
+jest.mock('./LayoutUtils', () => ({
+  ...jest.requireActual('./LayoutUtils'),
+  wrapBareChildrenInPanel: jest.fn((children: React.ReactNode) => children),
+}));
+
+const mockLayoutConfig = [
+  { type: 'row', content: [] },
+] as unknown as DashboardLayoutConfig;
+
+beforeEach(() => {
+  jest.clearAllMocks();
+});
+
+it('renders as a Flex when inside a panel, even during rehydration (DH-23205)', () => {
+  // Regression: a ui.row used as the content of a ui.panel must render as a
+  // Flex, not wrap its bare children in a nested panel, which would throw a
+  // NestedPanelError. This must hold even when an initial layout config exists.
+  render(
+    <ReactPanelContext.Provider value="test-panel-id">
+      <InitialLayoutConfigContext.Provider value={mockLayoutConfig}>
+        <Row height={100}>hello</Row>
+      </InitialLayoutConfigContext.Provider>
+    </ReactPanelContext.Provider>
+  );
+
+  expect(screen.getByTestId('flex')).toHaveTextContent('hello');
+  expect(wrapBareChildrenInPanel).not.toHaveBeenCalled();
+});
+
+it('renders as a Flex when inside a panel with no initial layout config', () => {
+  render(
+    <ReactPanelContext.Provider value="test-panel-id">
+      <Row height={100}>hello</Row>
+    </ReactPanelContext.Provider>
+  );
+
+  expect(screen.getByTestId('flex')).toHaveTextContent('hello');
+  expect(wrapBareChildrenInPanel).not.toHaveBeenCalled();
+});
+
+it('wraps bare children in a panel during rehydration when not inside a panel', () => {
+  render(
+    <InitialLayoutConfigContext.Provider value={mockLayoutConfig}>
+      <Row height={100}>hello</Row>
+    </InitialLayoutConfigContext.Provider>
+  );
+
+  expect(screen.queryByTestId('flex')).not.toBeInTheDocument();
+  expect(wrapBareChildrenInPanel).toHaveBeenCalled();
+});
diff --git a/plugins/ui/src/js/src/layout/Row.tsx b/plugins/ui/src/js/src/layout/Row.tsx
index d318dac19..c6ab42329 100644
--- a/plugins/ui/src/js/src/layout/Row.tsx
+++ b/plugins/ui/src/js/src/layout/Row.tsx
@@ -46,6 +46,18 @@ function LayoutRow({ children, height }: RowElementProps): JSX.Element | null {
 function Row({ children, height }: RowElementProps): JSX.Element {
   const panelId = usePanelId();
   const initialLayoutConfig = useInitialLayoutConfig();
+
+  if (panelId != null) {
+    // We're inside a panel (e.g. ui.panel(ui.row(...))), so render as a Flex
+    // regardless of any persisted layout. Wrapping bare children in a panel here
+    // would nest a panel inside a panel and throw a NestedPanelError.
+    return (
+      <Flex height={`${height}%`} direction="row">
+        {children}
+      </Flex>
+    );
+  }
+
   if (initialLayoutConfig != null) {
     // If there's already an initial layout defined, user has likely already customized their layout.
     // Don't add a row here, or normalize the children which might add a stack unnecessarily.
@@ -55,15 +67,7 @@ function Row({ children, height }: RowElementProps): JSX.Element {
     return <>{wrapBareChildrenInPanel(children)}</>;
   }
 
-  if (panelId == null) {
-    return <LayoutRow height={height}>{children}</LayoutRow>;
-  }
-
-  return (
-    <Flex height={`${height}%`} direction="row">
-      {children}
-    </Flex>
-  );
+  return <LayoutRow height={height}>{children}</LayoutRow>;
 }
 
 export default Row;