diff --git a/ext/ReactantKernelAbstractionsExt.jl b/ext/ReactantKernelAbstractionsExt.jl
index ee13c3bb3f..a2e9fab614 100644
--- a/ext/ReactantKernelAbstractionsExt.jl
+++ b/ext/ReactantKernelAbstractionsExt.jl
@@ -1,6 +1,7 @@
 module ReactantKernelAbstractionsExt
 
 using Reactant: Reactant
+using ReactantCore: ReactantCore
 
 using Adapt: Adapt
 using KernelAbstractions: KernelAbstractions
@@ -101,6 +102,14 @@ function tokw(ndrange, workgroupsize, obj, args...)
 end
 
 function (obj::KA.Kernel{ReactantBackend})(args...; ndrange=nothing, workgroupsize=nothing)
+    # If we're already inside a compilation/tracing context, or if any arguments are traced,
+    # we should trace through this kernel call instead of trying to compile it again.
+    if Reactant.within_compile() || any(ReactantCore.is_traced, args)
+        return Reactant.call_with_reactant(
+            Reactant.ka_with_reactant, ndrange, workgroupsize, obj, args...
+        )
+    end
+    
     if Reactant.precompiling()
         Reactant.@code_hlo optimize = false tokw(ndrange, workgroupsize, obj, args...)
     else
diff --git a/ext/ReactantSparseArraysExt/ReactantSparseArraysExt.jl b/ext/ReactantSparseArraysExt/ReactantSparseArraysExt.jl
index b782ad62ad..4344371023 100644
--- a/ext/ReactantSparseArraysExt/ReactantSparseArraysExt.jl
+++ b/ext/ReactantSparseArraysExt/ReactantSparseArraysExt.jl
@@ -7,4 +7,6 @@ using SparseArrays:
 include("Errors.jl")
 include("ReadOnly.jl")
 
+Reactant.use_overlayed_version(::AbstractSparseArray) = false
+
 end
diff --git a/src/Overlay.jl b/src/Overlay.jl
index 143e8a4a45..13fa9a4880 100644
--- a/src/Overlay.jl
+++ b/src/Overlay.jl
@@ -121,10 +121,11 @@ for (cT, aT, bT) in (
         @reactant_overlay @noinline function LinearAlgebra.mul!(
             C::$cT, A::$aT, B::$bT, α::Number, β::Number
         )
-            A, B = aos_to_soa(A), aos_to_soa(B)
+            A2, B2 = aos_to_soa(A), aos_to_soa(B)
             C2 = aos_to_soa(C)
-            if use_overlayed_version((C2, A, B))
-                TracedLinearAlgebra.overloaded_mul!(C2, A, B, α, β)
+            # A2 can also be a SparseMatrix, which should be handled by its own methods
+            if use_overlayed_version(A2) && use_overlayed_version((C2, A2, B2))
+                TracedLinearAlgebra.overloaded_mul!(C2, A2, B2, α, β)
                 if C2 !== C
                     C .= C2
                 end
@@ -132,7 +133,7 @@ for (cT, aT, bT) in (
                 # Inference barrier is required when calling function recursively within
                 # overload. This is required since otherwise type inference will think this
                 # is a recursive edge rather than a call to the base method
-                Base.inferencebarrier(LinearAlgebra.mul!)(C, A, B, α, β)
+                Base.inferencebarrier(LinearAlgebra.mul!)(C2, A2, B2, α, β)
             end
             return C
         end