diff --git a/src/Application/Base.php b/src/Application/Base.php
index 710ccb1..24e35a3 100644
--- a/src/Application/Base.php
+++ b/src/Application/Base.php
@@ -717,7 +717,16 @@ protected function initSettings( ?ISettingSource $source ): void
 
 		try
 		{
-			$this->_settings = new SettingManager( $source );
+			// If source is already a SettingManager, use it directly (avoids double-wrapping)
+			// Otherwise wrap the raw source in a SettingManager (backward compatibility)
+			if( $source instanceof SettingManager )
+			{
+				$this->_settings = $source;
+			}
+			else
+			{
+				$this->_settings = new SettingManager( $source );
+			}
 
 			$basePath = $this->getSetting( 'system','base_path' ) ?? $defaultBasePath;
 			$fallback = new Env( Data\Env::getInstance( "$basePath/.env" ) );
diff --git a/tests/Application/ApplicationTest.php b/tests/Application/ApplicationTest.php
index a7e718c..ca6e743 100644
--- a/tests/Application/ApplicationTest.php
+++ b/tests/Application/ApplicationTest.php
@@ -534,5 +534,62 @@ public function testInitSettingsUsesEnvVariable()
 
 		$this->assertNotNull($app->getSettingManager());
 	}
+
+	public function testInitSettingsWithSettingManagerUsesItDirectly()
+	{
+		// Clear registry
+		Registry::getInstance()->set(RegistryKeys::SETTINGS, null);
+
+		// Create a SettingManager with a raw source
+		$rawSource = new Ini('examples/config/application.ini');
+		$settingManager = new \Neuron\Data\Settings\SettingManager($rawSource);
+
+		// Pass the SettingManager to the app
+		$app = new AppMock("2.0", $settingManager);
+
+		// The app should use the SettingManager directly (not wrap it again)
+		$appSettings = $app->getSettingManager();
+		$this->assertSame($settingManager, $appSettings);
+
+		// Verify we don't have double-wrapping by checking the internal source
+		// If double-wrapped, getSource() would return a SettingManager instead of the raw Ini
+		$this->assertInstanceOf(Ini::class, $appSettings->getSource());
+		$this->assertNotInstanceOf(\Neuron\Data\Settings\SettingManager::class, $appSettings->getSource());
+	}
+
+	public function testInitSettingsWithRawSourceWrapsIt()
+	{
+		// Clear registry
+		Registry::getInstance()->set(RegistryKeys::SETTINGS, null);
+
+		// Pass a raw source (not a SettingManager)
+		$rawSource = new Ini('examples/config/application.ini');
+		$app = new AppMock("2.0", $rawSource);
+
+		// The app should wrap it in a SettingManager
+		$appSettings = $app->getSettingManager();
+		$this->assertInstanceOf(\Neuron\Data\Settings\SettingManager::class, $appSettings);
+
+		// Verify the raw source is wrapped
+		$this->assertInstanceOf(Ini::class, $appSettings->getSource());
+	}
+
+	public function testInitSettingsSetsEnvFallbackWhenNoneProvided()
+	{
+		// Clear registry
+		Registry::getInstance()->set(RegistryKeys::SETTINGS, null);
+
+		// Create a SettingManager without a fallback
+		$rawSource = new Ini('examples/config/application.ini');
+		$settingManager = new \Neuron\Data\Settings\SettingManager($rawSource);
+
+		// Pass the SettingManager to the app
+		$app = new AppMock("2.0", $settingManager);
+
+		// The app should set a fallback (env variables)
+		$appSettings = $app->getSettingManager();
+		$this->assertNotNull($appSettings->getFallback());
+		$this->assertInstanceOf(\Neuron\Data\Settings\Source\Env::class, $appSettings->getFallback());
+	}
 }
 
diff --git a/versionlog.md b/versionlog.md
index 9dcca0a..63d82f3 100644
--- a/versionlog.md
+++ b/versionlog.md
@@ -1,16 +1,14 @@
 ## 0.8.16
+* Fix to support setting managers or sources correctly without incurring a manager that contains a manager.
 
 ## 0.8.15 2026-01-13
-
 ## 0.8.14 2026-01-12
-
 ## 0.8.13 2026-01-06
 
 ## 0.8.12 2026-01-01
 * Added psr-11 container support.
 
 ## 0.8.11 2025-12-26
-
 ## 0.8.10 2025-11-28
 
 ## 0.8.9 2025-11-27
@@ -25,20 +23,16 @@
 * Renamed config.yaml to neuron.yaml
 
 ## 0.8.5 2025-11-11
-
 ## 0.8.4 2025-11-10
-
 ## 0.8.3 2025-11-10
 * Improved error handling.
 
 ## 0.8.2 2025-11-08
-
 ## 0.8.1 2025-11-06
 
 * Added getSettingManager() method to provide access to SettingManager instance
 
 ## 0.7.1 2025-11-04
-
 ## 0.7.0 2025-08-14
 * Refactored get/set setting methods.
 
@@ -46,9 +40,7 @@
 * Added the Crashed state.
 
 ## 0.6.32 2025-05-21
-
 ## 0.6.31
-
 ## 0.6.30 2025-02-06
 * Transitioned from core package to application.