diff --git a/lib/ncdata/utils/_rename_dim.py b/lib/ncdata/utils/_rename_dim.py
index 35aa436..8043b22 100644
--- a/lib/ncdata/utils/_rename_dim.py
+++ b/lib/ncdata/utils/_rename_dim.py
@@ -20,6 +20,25 @@ def _rename_dims_in_vars(ncdata: NcData, name_from: str, name_to: str) -> None:
             _rename_dims_in_vars(grp, name_from, name_to)
 
 
+def _check_name_collisions(ncdata, name_from, name_to, group_path=""):
+    if name_to in ncdata.dimensions:
+        inner = f' in group "{group_path}"' if group_path else ""
+        msg = (
+            f"Cannot rename dimension {name_from!r} to {name_to!r}, "
+            f"because a {name_to!r} dimension already exists{inner}."
+        )
+        raise ValueError(msg)
+
+    for group in ncdata.groups.values():
+        if name_from in group.dimensions:
+            # Skip this group as its 'name_from' dim makes it a "scope hole".
+            continue
+        inner_path = group_path + "/" + group.name
+        _check_name_collisions(
+            group, name_from, name_to, group_path=inner_path
+        )
+
+
 def rename_dimension(ncdata: NcData, name_from: str, name_to: str) -> None:
     """
     Rename a dimension of an :class:`~ncdata.NcData`.
@@ -47,20 +66,6 @@ def rename_dimension(ncdata: NcData, name_from: str, name_to: str) -> None:
       of the new name already exists, and if so raises an error.
 
     """
-
-    def check_name_collides(ncdata, name_to, group_path=""):
-        if name_to in ncdata.dimensions:
-            inner = f' in group "{group_path}"' if group_path else ""
-            msg = (
-                f"Cannot rename dimension {name_from!r} to {name_to!r}, "
-                f"because a {name_to!r} dimension already exists{inner}."
-            )
-            raise ValueError(msg)
-
-        for group in ncdata.groups.values():
-            inner_path = group_path + "/" + group.name
-            check_name_collides(group, name_to, group_path=inner_path)
-
-    check_name_collides(ncdata, name_to)
+    _check_name_collisions(ncdata, name_from, name_to)
     ncdata.dimensions.rename(name_from, name_to)
     _rename_dims_in_vars(ncdata, name_from, name_to)
diff --git a/tests/unit/utils/test_rename_dimension.py b/tests/unit/utils/test_rename_dimension.py
index feab000..be51cd2 100644
--- a/tests/unit/utils/test_rename_dimension.py
+++ b/tests/unit/utils/test_rename_dimension.py
@@ -103,6 +103,17 @@ def test_name_collision_ingroup_fail(self, innergroup):
         with pytest.raises(ValueError, match=msg):
             rename_dimension(ncdata, "x", "z")
 
+    def test_name_ingroup_masked_nofail(self):
+        ncdata = self.ncdata
+        ncdata.groups.add(
+            NcData(
+                name="inner",
+                dimensions=[NcDimension("x", 2), NcDimension("z", 2)],
+            )
+        )
+        # No error in this case, because the "z" is inside a group with its own "x".
+        rename_dimension(ncdata, "x", "z")
+
     @pytest.fixture()
     def group_example(self, setup):
         ncdata = self.ncdata.copy()