diff --git a/packages/@aws-cdk/core/lib/nested-stack.ts b/packages/@aws-cdk/core/lib/nested-stack.ts
index 82a123fb9243b..347731894d794 100644
--- a/packages/@aws-cdk/core/lib/nested-stack.ts
+++ b/packages/@aws-cdk/core/lib/nested-stack.ts
@@ -1,4 +1,5 @@
 import * as crypto from 'crypto';
+import * as cxapi from '@aws-cdk/cx-api';
 import { Construct, Node } from 'constructs';
 import { FileAssetPackaging } from './assets';
 import { Fn } from './cfn-fn';
@@ -213,6 +214,8 @@ export class NestedStack extends Stack {
       fileName: this.templateFile,
     });
 
+    this.addResourceMetadata(this.resource, 'TemplateURL');
+
     // if bucketName/objectKey are cfn parameters from a stack other than the parent stack, they will
     // be resolved as cross-stack references like any other (see "multi" tests).
     this._templateUrl = `https://s3.${this._parentStack.region}.${this._parentStack.urlSuffix}/${templateLocation.bucketName}/${templateLocation.objectKey}`;
@@ -230,6 +233,18 @@ export class NestedStack extends Stack {
       },
     });
   }
+
+  private addResourceMetadata(resource: CfnResource, resourceProperty: string) {
+    if (!this.node.tryGetContext(cxapi.ASSET_RESOURCE_METADATA_ENABLED_CONTEXT)) {
+      return; // not enabled
+    }
+
+    // tell tools such as SAM CLI that the "TemplateURL" property of this resource
+    // points to the nested stack template for local emulation
+    resource.cfnOptions.metadata = resource.cfnOptions.metadata || { };
+    resource.cfnOptions.metadata[cxapi.ASSET_RESOURCE_METADATA_PATH_KEY] = this.templateFile;
+    resource.cfnOptions.metadata[cxapi.ASSET_RESOURCE_METADATA_PROPERTY_KEY] = resourceProperty;
+  }
 }
 
 /**
diff --git a/packages/@aws-cdk/core/test/stack.test.ts b/packages/@aws-cdk/core/test/stack.test.ts
index 7c67f545d4b87..cd7186fea9f7d 100644
--- a/packages/@aws-cdk/core/test/stack.test.ts
+++ b/packages/@aws-cdk/core/test/stack.test.ts
@@ -661,6 +661,29 @@ describe('stack', () => {
     }));
   });
 
+  test('asset metadata added to NestedStack resource that contains asset path and property', () => {
+    const app = new App();
+
+    // WHEN
+    const parentStack = new Stack(app, 'parent');
+    parentStack.node.setContext(cxapi.ASSET_RESOURCE_METADATA_ENABLED_CONTEXT, true);
+    const childStack = new NestedStack(parentStack, 'child');
+    new CfnResource(childStack, 'ChildResource', { type: 'Resource::Child' });
+
+    const assembly = app.synth();
+    expect(assembly.getStackByName(parentStack.stackName).template).toEqual(expect.objectContaining({
+      Resources: {
+        childNestedStackchildNestedStackResource7408D03F: expect.objectContaining({
+          Metadata: {
+            'aws:asset:path': 'parentchild13F9359B.nested.template.json',
+            'aws:asset:property': 'TemplateURL',
+          },
+        }),
+      },
+    }));
+
+  });
+
   test('cross-stack reference (substack references parent stack)', () => {
     // GIVEN
     const app = new App();