diff --git a/crates/packet-forward/src/lib.rs b/crates/packet-forward/src/lib.rs
index 4f1fd36..3107884 100644
--- a/crates/packet-forward/src/lib.rs
+++ b/crates/packet-forward/src/lib.rs
@@ -367,7 +367,7 @@ where
         let override_packet = {
             let ics20_packet_data = PacketData {
                 receiver: override_receiver,
-                memo: String::new().into(),
+                memo: extract_next_memo_from_pfm_packet(&source_transfer_pkt).into(),
                 ..source_transfer_pkt
             };
 
@@ -902,3 +902,15 @@ fn emit_event_with_attrs(extras: &mut ModuleExtras, attributes: Vec<ModuleEventA
 fn get_retries_left_for_new_pkt(input_retries: Option<u8>) -> Option<NonZeroU8> {
     input_retries.map_or(Some(DEFAULT_FORWARD_RETRIES), NonZeroU8::new)
 }
+
+// NB: Assume that `src_packet_data` has been validated as a PFM packet
+#[inline]
+fn extract_next_memo_from_pfm_packet(src_packet_data: &PacketData) -> String {
+    let serde_json::Value::Object(mut memo_obj) =
+        serde_json::from_str(src_packet_data.memo.as_ref()).unwrap()
+    else {
+        unreachable!()
+    };
+    memo_obj.remove("forward");
+    serde_json::to_string(&memo_obj).unwrap()
+}
diff --git a/crates/packet-forward/src/tests.rs b/crates/packet-forward/src/tests.rs
index e21e63e..430d1b0 100644
--- a/crates/packet-forward/src/tests.rs
+++ b/crates/packet-forward/src/tests.rs
@@ -1247,3 +1247,22 @@ fn retries_left_for_new_pkt() {
         Some(DEFAULT_FORWARD_RETRIES)
     );
 }
+
+#[test]
+fn next_middleware_memo_has_no_fwd_key() -> Result<(), crate::MiddlewareError> {
+    let ack_from_c =
+        AcknowledgementStatus::success(AckStatusValue::new("Ack from chain C").unwrap()).into();
+    no_timeout_packet_flow_inner(&ack_from_c, |_, pfm| {
+        assert!(pfm.next.overriden_packets_received.iter().all(|packet| {
+            let packet_data: PacketData = serde_json::from_slice(&packet.data).unwrap();
+
+            let serde_json::Value::Object(memo_obj) =
+                serde_json::from_str(packet_data.memo.as_ref()).unwrap()
+            else {
+                panic!("Expected JSON object");
+            };
+
+            !memo_obj.contains_key("forward")
+        }))
+    })
+}
diff --git a/crates/packet-forward/src/tests/utils.rs b/crates/packet-forward/src/tests/utils.rs
index 3b63184..cc2cced 100644
--- a/crates/packet-forward/src/tests/utils.rs
+++ b/crates/packet-forward/src/tests/utils.rs
@@ -73,6 +73,7 @@ pub struct Store<M> {
     pub refunds_received: Vec<(Packet, PacketData)>,
     pub refunds_sent: Vec<InFlightPacket>,
     pub ack_and_events_written: Vec<(Packet, Acknowledgement)>,
+    pub overriden_packets_received: Vec<Packet>,
 }
 
 impl<M> Store<M> {
@@ -85,6 +86,7 @@ impl<M> Store<M> {
             refunds_sent: Vec::new(),
             ack_and_events_written: Vec::new(),
             failure_injections: HashSet::new(),
+            overriden_packets_received: Vec::new(),
         }
     }
 
@@ -122,6 +124,8 @@ where
         packet: &Packet,
         relayer: &Signer,
     ) -> (ModuleExtras, Option<Acknowledgement>) {
+        self.overriden_packets_received.push(packet.clone());
+
         if let Err(err) =
             self.check_failure_injection(FailurePoint::BeforeNextMiddlewareOnRecvPacket)
         {