diff --git a/CHANGES.rst b/CHANGES.rst
index ab5791a3a7..27f019d4b3 100644
--- a/CHANGES.rst
+++ b/CHANGES.rst
@@ -119,6 +119,10 @@ extract_1d
 
 - Fix error in application of aperture correction to variance arrays. [#8530]
 
+- Fix error in ``_coalesce_bounds`` that returned incorrect spectral or background
+  extraction region when one set of pixel limits is entirely contained within
+  another [#8586]
+  
 - Removed a check for the primary slit for NIRSpec fixed slit mode:
   all slits containing point sources are now handled consistently,
   whether they are marked primary or not. [#8467]
diff --git a/jwst/extract_1d/extract1d.py b/jwst/extract_1d/extract1d.py
index f0c3a60d95..e083497cd6 100644
--- a/jwst/extract_1d/extract1d.py
+++ b/jwst/extract_1d/extract1d.py
@@ -802,7 +802,7 @@ def _coalesce_bounds(segments):
         pint = cint[-1]
         interval = intervals.pop(0)
         if interval[0] <= pint[1]:
-            pint[1] = interval[1]
+            pint[1] = max(interval[1], pint[1])
             continue
         cint.append(interval)