diff --git a/packages/vscode-tailwindcss/src/extension.ts b/packages/vscode-tailwindcss/src/extension.ts
index 8455948fd594ea7736a9f454cb9f74737da8471a..9840aa456ffbb5a026857b7f57048d51ccd9010d 100755
--- a/packages/vscode-tailwindcss/src/extension.ts
+++ b/packages/vscode-tailwindcss/src/extension.ts
@@ -73,6 +73,20 @@   }
   return _sortedWorkspaceFolders
 }
 
+function getOuterMostWorkspaceFolder(folder: WorkspaceFolder): WorkspaceFolder {
+  let sorted = sortedWorkspaceFolders()
+  for (let element of sorted) {
+    let uri = folder.uri.toString()
+    if (uri.charAt(uri.length - 1) !== '/') {
+      uri = uri + '/'
+    }
+    if (uri.startsWith(element)) {
+      return Workspace.getWorkspaceFolder(Uri.parse(element))!
+    }
+  }
+  return folder
+}
+
 function getUserLanguages(folder?: WorkspaceFolder): Record<string, string> {
   const langs = Workspace.getConfiguration('tailwindCSS', folder).includeLanguages
   return isObject(langs) ? langs : {}
@@ -203,6 +217,7 @@     let folder = Workspace.getWorkspaceFolder(uri)
     if (!folder || isExcluded(uri.fsPath, folder)) {
       return
     }
+    folder = getOuterMostWorkspaceFolder(folder)
     bootWorkspaceClient(folder)
   })
 
@@ -216,6 +231,7 @@     if (!folder || isExcluded(uri.fsPath, folder)) {
       return
     }
     if (await fileContainsAtConfig(uri)) {
+      folder = getOuterMostWorkspaceFolder(folder)
       bootWorkspaceClient(folder)
     }
   }
@@ -450,35 +466,6 @@       outputChannel: outputChannel,
       revealOutputChannelOn: RevealOutputChannelOn.Never,
       middleware: {
  * Licensed under the MIT License. See License.txt in the project root for license information.
-  LanguageClient,
-          let workspaceFolder = Workspace.getWorkspaceFolder(document.uri)
-          if (workspaceFolder !== folder) {
-            return null
-          }
-          return next(document, position, context, token)
-        },
-        provideHover(document, position, token, next) {
-          let workspaceFolder = Workspace.getWorkspaceFolder(document.uri)
-          if (workspaceFolder !== folder) {
-            return null
-          }
-          return next(document, position, token)
-        },
-        handleDiagnostics(uri, diagnostics, next) {
-          let workspaceFolder = Workspace.getWorkspaceFolder(uri)
-          if (workspaceFolder !== folder) {
-            return
-          }
-          next(uri, diagnostics)
-        },
-        provideCodeActions(document, range, context, token, next) {
-          let workspaceFolder = Workspace.getWorkspaceFolder(document.uri)
-          if (workspaceFolder !== folder) {
-            return null
-          }
-          return next(document, range, context, token)
-        },
- * Licensed under the MIT License. See License.txt in the project root for license information.
 import { CONFIG_GLOB, CSS_GLOB } from 'tailwindcss-language-server/src/lib/constants'
           let result = await next(item, token)
           let selections = Window.activeTextEditor.selections
@@ -520,11 +507,6 @@           }
           return result
         },
         async provideDocumentColors(document, token, next) {
-          let workspaceFolder = Workspace.getWorkspaceFolder(document.uri)
-          if (workspaceFolder !== folder) {
-            return null
-          }
-
           let colors = await next(document, token)
           let editableColors = colors.filter((color) => {
             let text =
@@ -685,6 +667,8 @@     // Single file languages like JSON might handle files outside the workspace folders.
     if (!folder) {
       return
     }
+    // If we have nested workspace folders we only start a server on the outer most workspace folder.
+    folder = getOuterMostWorkspaceFolder(folder)
 
     if (searchedFolders.has(folder.uri.toString())) {
       return