diff --git a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java
index c5cc8440506..06641c1293a 100644
--- a/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java
+++ b/core/org.eclipse.cdt.core.tests/parser/org/eclipse/cdt/core/parser/tests/ast2/AST2TemplateTests.java
@@ -10703,6 +10703,33 @@ public class AST2TemplateTests extends AST2CPPTestBase {
 		parseAndCheckBindings();
 	}
 
+	//	template<int Idx>
+	//	struct get_from_variadic_pack {
+	//		template<typename First, typename ... Accessors>
+	//		static constexpr int apply(First first, Accessors... args) {
+	//			return get_from_variadic_pack<Idx - 1>::apply(args...);
+	//		}
+	//	};
+	//
+	//	template<>
+	//	struct get_from_variadic_pack<0> {
+	//		template<typename First, typename ... Accessors>
+	//		static constexpr int apply(First first, Accessors ... args) {
+	//			return first;
+	//		}
+	//	};
+	//
+	//	template<int N>
+	//	struct static_int{
+	//		static constexpr int value = N;
+	//	};
+	//
+	//	constexpr int tmp = get_from_variadic_pack<1>::apply(1,2);
+	//	constexpr int result = static_int<tmp>::value;
+	public void testInstantiationOfPackInNestedTemplate_540758() throws Exception {
+		parseAndCheckBindings();
+	}
+
 	//	// A metafunction that loops infinitely on odd inputs.
 	//	template <int N>
 	//	struct meta {
diff --git a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPDependentEvaluation.java b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPDependentEvaluation.java
index 7bf07930382..952e08d75ce 100644
--- a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPDependentEvaluation.java
+++ b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPDependentEvaluation.java
@@ -124,7 +124,9 @@ public abstract class CPPDependentEvaluation extends CPPEvaluation {
 					if (packSize == CPPTemplates.PACK_SIZE_FAIL || packSize == CPPTemplates.PACK_SIZE_NOT_FOUND) {
 						newEval = EvalFixed.INCOMPLETE;
 					} else if (packSize == CPPTemplates.PACK_SIZE_DEFER) {
-						newEval = origEval;
+						// We're not expanding the pack, but arguments for template parameters of
+						// enclosing templates may still need to be substituted into the expansion pattern.
+						newEval = origEval.instantiate(context, maxDepth);
 					} else {
 						int shift = packSize - 1;
 						ICPPEvaluation[] newResult = new ICPPEvaluation[subexpressions.length + resultShift + shift];
diff --git a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java
index 157107f088e..a2b17c0e9fd 100644
--- a/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java
+++ b/core/org.eclipse.cdt.core/parser/org/eclipse/cdt/internal/core/dom/parser/cpp/semantics/CPPTemplates.java
@@ -1334,7 +1334,9 @@ public class CPPTemplates {
 							IProblemBinding.SEMANTIC_INVALID_TYPE,
 							types[i] instanceof IBinding ? ((IBinding) types[i]).getNameCharArray() : null);
 				} else if (packSize == PACK_SIZE_DEFER) {
-					newType = origType;
+					// We're not expanding the pack, but arguments for template parameters of
+					// enclosing templates may still need to be substituted into the expansion pattern.
+					newType = instantiateType(origType, context);
 				} else {
 					IType[] newResult = new IType[result.length + packSize - 1];
 					System.arraycopy(result, 0, newResult, 0, j);
@@ -1395,7 +1397,14 @@ public class CPPTemplates {
 					throw new DOMException(new ProblemBinding(CPPSemantics.getCurrentLookupPoint(),
 							IProblemBinding.SEMANTIC_INVALID_TEMPLATE_ARGUMENTS, null));
 				} else if (packSize == PACK_SIZE_DEFER) {
-					newArg = origArg;
+					// We're not expanding the pack, but arguments for template parameters of
+					// enclosing templates may still need to be substituted into the expansion pattern.
+					newArg = instantiateArgument(origArg, context);
+					if (!isValidArgument(newArg)) {
+						if (strict)
+							return null;
+						newArg = origArg;
+					}
 				} else {
 					int shift = packSize - 1;
 					ICPPTemplateArgument[] newResult = new ICPPTemplateArgument[args.length + resultShift + shift];