diff --git a/src/lightning/pytorch/CHANGELOG.md b/src/lightning/pytorch/CHANGELOG.md
index 81c7bfc656885..65aef1ea3b306 100644
--- a/src/lightning/pytorch/CHANGELOG.md
+++ b/src/lightning/pytorch/CHANGELOG.md
@@ -26,6 +26,7 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
 ### Fixed
 
 - fix progress bar console clearing for Rich `14.1+` ([#21016](https://github.com/Lightning-AI/pytorch-lightning/pull/21016))
+- fix `AdvancedProfiler` to handle nested profiling actions for Python 3.12+ ([#20809](https://github.com/Lightning-AI/pytorch-lightning/pull/20809))
 
 
 ---
diff --git a/src/lightning/pytorch/profilers/advanced.py b/src/lightning/pytorch/profilers/advanced.py
index 41681fbd239f3..c0b4b9953cc33 100644
--- a/src/lightning/pytorch/profilers/advanced.py
+++ b/src/lightning/pytorch/profilers/advanced.py
@@ -19,6 +19,7 @@
 import os
 import pstats
 import tempfile
+from collections import defaultdict
 from pathlib import Path
 from typing import Optional, Union
 
@@ -66,14 +67,15 @@ def __init__(
                 If you attempt to stop recording an action which was never started.
         """
         super().__init__(dirpath=dirpath, filename=filename)
-        self.profiled_actions: dict[str, cProfile.Profile] = {}
+        self.profiled_actions: dict[str, cProfile.Profile] = defaultdict(cProfile.Profile)
         self.line_count_restriction = line_count_restriction
         self.dump_stats = dump_stats
 
     @override
     def start(self, action_name: str) -> None:
-        if action_name not in self.profiled_actions:
-            self.profiled_actions[action_name] = cProfile.Profile()
+        # Disable all profilers before starting a new one
+        for pr in self.profiled_actions.values():
+            pr.disable()
         self.profiled_actions[action_name].enable()
 
     @override
@@ -114,7 +116,7 @@ def summary(self) -> str:
     @override
     def teardown(self, stage: Optional[str]) -> None:
         super().teardown(stage=stage)
-        self.profiled_actions = {}
+        self.profiled_actions.clear()
 
     def __reduce__(self) -> tuple:
         # avoids `TypeError: cannot pickle 'cProfile.Profile' object`
diff --git a/tests/tests_pytorch/profilers/test_profiler.py b/tests/tests_pytorch/profilers/test_profiler.py
index d0221d12e317f..52112769702c0 100644
--- a/tests/tests_pytorch/profilers/test_profiler.py
+++ b/tests/tests_pytorch/profilers/test_profiler.py
@@ -336,6 +336,12 @@ def test_advanced_profiler_deepcopy(advanced_profiler):
     assert deepcopy(advanced_profiler)
 
 
+def test_advanced_profiler_nested(advanced_profiler):
+    """Ensure AdvancedProfiler does not raise ValueError for nested profiling actions (Python 3.12+ compatibility)."""
+    with advanced_profiler.profile("outer"), advanced_profiler.profile("inner"):
+        pass  # Should not raise ValueError
+
+
 @pytest.fixture
 def pytorch_profiler(tmp_path):
     return PyTorchProfiler(dirpath=tmp_path, filename="profiler")