diff --git a/lib/document.js b/lib/document.js
index 413b0de35b7..0183ce47e51 100644
--- a/lib/document.js
+++ b/lib/document.js
@@ -856,7 +856,7 @@ Document.prototype.$set = function $set(path, val, type, options) {
         this.schema.paths[pathName].options &&
         this.schema.paths[pathName].options.ref)) {
       this.$__.$setCalled.add(prefix + key);
-      this.$set(path[key], prefix + key, constructing);
+      this.$set(path[key], prefix + key, constructing, options);
     } else if (strict) {
       // Don't overwrite defaults with undefined keys (gh-3981)
       if (constructing && path[key] === void 0 &&
@@ -876,10 +876,10 @@ Document.prototype.$set = function $set(path, val, type, options) {
             path[key] instanceof Document) {
           p = p.toObject({ virtuals: false, transform: false });
         }
-        this.$set(prefix + key, p, constructing);
+        this.$set(prefix + key, p, constructing, options);
       } else if (pathtype === 'nested' && path[key] instanceof Document) {
         this.$set(prefix + key,
-          path[key].toObject({transform: false}), constructing);
+          path[key].toObject({transform: false}), constructing, options);
       } else if (strict === 'throw') {
         if (pathtype === 'nested') {
           throw new ObjectExpectedError(key, path[key]);
@@ -888,7 +888,7 @@ Document.prototype.$set = function $set(path, val, type, options) {
         }
       }
     } else if (path[key] !== void 0) {
-      this.$set(prefix + key, path[key], constructing);
+      this.$set(prefix + key, path[key], constructing, options);
     }
   }
 
@@ -1034,6 +1034,18 @@ Document.prototype.$set = function $set(path, val, type, options) {
     return this;
   }
 
+  if (schema.$isSingleNested && val != null && merge) {
+    if (val instanceof Document) {
+      val = val.toObject({ virtuals: false, transform: false });
+    }
+    const keys = Object.keys(val);
+    for (const key of keys) {
+      this.$set(path + '.' + key, val[key], constructing, options);
+    }
+
+    return this;
+  }
+
   let shouldSet = true;
   try {
     // If the user is trying to set a ref path to a document with
@@ -1097,11 +1109,11 @@ Document.prototype.$set = function $set(path, val, type, options) {
       didPopulate = true;
     }
 
-    // If this path is underneath a single nested schema, we'll call the setter
-    // later in `$__set()` because we don't take `_doc` when we iterate through
-    // a single nested doc. That's to make sure we get the correct context.
-    // Otherwise we would double-call the setter, see gh-7196.
     if (this.schema.singleNestedPaths[path] == null) {
+      // If this path is underneath a single nested schema, we'll call the setter
+      // later in `$__set()` because we don't take `_doc` when we iterate through
+      // a single nested doc. That's to make sure we get the correct context.
+      // Otherwise we would double-call the setter, see gh-7196.
       val = schema.applySetters(val, this, false, priorVal);
     }