diff --git a/src/backend/InvenTree/part/filters.py b/src/backend/InvenTree/part/filters.py
index 4d247529b9..a2a6440c98 100644
--- a/src/backend/InvenTree/part/filters.py
+++ b/src/backend/InvenTree/part/filters.py
@@ -299,15 +299,12 @@ def annotate_default_location(reference=''):
         rght__gt=OuterRef(f'{reference}rght'),
         level__lte=OuterRef(f'{reference}level'),
         parent__isnull=False,
-    )
+        default_location__isnull=False,
+    ).order_by('-level')
 
     return Coalesce(
         F(f'{reference}default_location'),
-        Subquery(
-            subquery.order_by('-level')
-            .filter(default_location__isnull=False)
-            .values('default_location')
-        ),
+        Subquery(subquery.values('default_location')[:1]),
         Value(None),
         output_field=IntegerField(),
     )
diff --git a/src/backend/InvenTree/part/test_api.py b/src/backend/InvenTree/part/test_api.py
index f65d06a425..10a6e9505e 100644
--- a/src/backend/InvenTree/part/test_api.py
+++ b/src/backend/InvenTree/part/test_api.py
@@ -505,6 +505,82 @@ class PartCategoryAPITest(InvenTreeAPITestCase):
             self.assertEqual(item['parent'], parent)
             self.assertEqual(item['subcategories'], subcategories)
 
+    def test_part_category_default_location(self):
+        """Test default location propagation through location trees."""
+        """Making a tree structure like this:
+        main
+        loc 2
+            sub1
+                sub2
+                loc 3
+                    sub3
+                    loc 4
+                        sub4
+                    sub5
+        Expected behaviour:
+        main parent loc: Out of test scope. Parent category data not controlled by the test
+        sub1 parent loc: loc 2
+        sub2 parent loc: loc 2
+        sub3 parent loc: loc 3
+        sub4 parent loc: loc 4
+        sub5 parent loc: loc 3
+        """
+        main = PartCategory.objects.create(
+            name='main',
+            parent=PartCategory.objects.first(),
+            default_location=StockLocation.objects.get(id=2),
+        )
+        sub1 = PartCategory.objects.create(name='sub1', parent=main)
+        sub2 = PartCategory.objects.create(
+            name='sub2', parent=sub1, default_location=StockLocation.objects.get(id=3)
+        )
+        sub3 = PartCategory.objects.create(
+            name='sub3', parent=sub2, default_location=StockLocation.objects.get(id=4)
+        )
+        sub4 = PartCategory.objects.create(name='sub4', parent=sub3)
+        sub5 = PartCategory.objects.create(name='sub5', parent=sub2)
+        part = Part.objects.create(name='test', category=sub4)
+        PartCategory.objects.rebuild()
+
+        # This query will trigger an internal server error if annotation results are not limited to 1
+        url = reverse('api-part-list')
+        response = self.get(url, expected_code=200)
+
+        # sub1, expect main to be propagated
+        url = reverse('api-part-category-detail', kwargs={'pk': sub1.pk})
+        response = self.get(url, expected_code=200)
+        self.assertEqual(
+            response.data['parent_default_location'], main.default_location.pk
+        )
+
+        # sub2, expect main to be propagated
+        url = reverse('api-part-category-detail', kwargs={'pk': sub2.pk})
+        response = self.get(url, expected_code=200)
+        self.assertEqual(
+            response.data['parent_default_location'], main.default_location.pk
+        )
+
+        # sub3, expect sub2 to be propagated
+        url = reverse('api-part-category-detail', kwargs={'pk': sub3.pk})
+        response = self.get(url, expected_code=200)
+        self.assertEqual(
+            response.data['parent_default_location'], sub2.default_location.pk
+        )
+
+        # sub4, expect sub3 to be propagated
+        url = reverse('api-part-category-detail', kwargs={'pk': sub4.pk})
+        response = self.get(url, expected_code=200)
+        self.assertEqual(
+            response.data['parent_default_location'], sub3.default_location.pk
+        )
+
+        # sub5, expect sub2 to be propagated
+        url = reverse('api-part-category-detail', kwargs={'pk': sub5.pk})
+        response = self.get(url, expected_code=200)
+        self.assertEqual(
+            response.data['parent_default_location'], sub2.default_location.pk
+        )
+
 
 class PartOptionsAPITest(InvenTreeAPITestCase):
     """Tests for the various OPTIONS endpoints in the /part/ API.