diff --git a/backend/src/app/services/queries/files.clj b/backend/src/app/services/queries/files.clj
index 0aa6b134d2..8fa7106ec0 100644
--- a/backend/src/app/services/queries/files.clj
+++ b/backend/src/app/services/queries/files.clj
@@ -247,6 +247,7 @@
 
 (def ^:private sql:file-libraries
   "select fl.*,
+          ? as is_indirect,
           flr.synced_at as synced_at
      from file as fl
     inner join file_library_rel as flr on (flr.library_file_id = fl.id)
@@ -254,8 +255,23 @@
       and fl.deleted_at is null")
 
 (defn retrieve-file-libraries
-  [conn file-id]
-  (into [] decode-row-xf (db/exec! conn [sql:file-libraries file-id])))
+  [conn is-indirect file-id]
+  (let [direct-libraries
+        (into [] decode-row-xf (db/exec! conn [sql:file-libraries is-indirect file-id]))
+
+        select-distinct
+        (fn [used-libraries new-libraries]
+          (remove (fn [new-library]
+                    (some #(= (:id %) (:id new-library)) used-libraries))
+                  new-libraries))]
+
+    (reduce (fn [used-libraries library]
+              (concat used-libraries
+                      (select-distinct
+                        used-libraries
+                        (retrieve-file-libraries conn true (:id library)))))
+            direct-libraries
+            direct-libraries)))
 
 (s/def ::file-libraries
   (s/keys :req-un [::profile-id ::file-id]))
@@ -264,7 +280,7 @@
   [{:keys [profile-id file-id] :as params}]
   (db/with-atomic [conn db/pool]
     (check-edition-permissions! conn profile-id file-id)
-    (retrieve-file-libraries conn file-id)))
+    (retrieve-file-libraries conn false file-id)))
 
 
 ;; --- Query: Single File Library
diff --git a/common/app/common/data.cljc b/common/app/common/data.cljc
index c938e0b757..3034e369b5 100644
--- a/common/app/common/data.cljc
+++ b/common/app/common/data.cljc
@@ -136,6 +136,16 @@
   [mfn coll]
   (into {} (map (fn [[key val]] [key (mfn key val)]) coll)))
 
+(defn filterm
+  "Filter values of a map that satisfy a predicate"
+  [pred coll]
+  (into {} (filter pred coll)))
+
+(defn removem
+  "Remove values of a map that satisfy a predicate"
+  [pred coll]
+  (into {} (remove pred coll)))
+
 (defn map-perm
   "Maps a function to each pair of values that can be combined inside the
   function without repetition.
diff --git a/frontend/src/app/main/ui/workspace/libraries.cljs b/frontend/src/app/main/ui/workspace/libraries.cljs
index 1b22620817..8138379361 100644
--- a/frontend/src/app/main/ui/workspace/libraries.cljs
+++ b/frontend/src/app/main/ui/workspace/libraries.cljs
@@ -7,6 +7,7 @@
 
 (ns app.main.ui.workspace.libraries
   (:require
+   [app.common.data :as d]
    [rumext.alpha :as mf]
    [cuerdas.core :as str]
    [okulary.core :as l]
@@ -142,7 +143,6 @@
                                 :value (tr "workspace.libraries.update")
                                 :on-click #(update-library (:id library))}]])]])]))
 
-
 (mf/defc libraries-dialog
   {::mf/register modal/components
    ::mf/register-as :libraries-dialog}
@@ -152,7 +152,9 @@
         locale       (mf/deref i18n/locale)
         project      (mf/deref refs/workspace-project)
         file         (mf/deref workspace-file)
-        libraries    (mf/deref refs/workspace-libraries)
+        libraries    (->> (mf/deref refs/workspace-libraries)
+                          (d/removem (fn [[key val]]
+                                       (:is-indirect val))))
         shared-files (mf/deref refs/workspace-shared-files)
 
         change-tab   #(reset! selected-tab %)
diff --git a/frontend/src/app/main/ui/workspace/sidebar/assets.cljs b/frontend/src/app/main/ui/workspace/sidebar/assets.cljs
index ae5dd213ba..42f4678519 100644
--- a/frontend/src/app/main/ui/workspace/sidebar/assets.cljs
+++ b/frontend/src/app/main/ui/workspace/sidebar/assets.cljs
@@ -631,7 +631,9 @@
 
 (mf/defc assets-toolbox
   []
-  (let [libraries (mf/deref refs/workspace-libraries)
+  (let [libraries (->> (mf/deref refs/workspace-libraries)
+                       (vals)
+                       (remove :is-indirect))
         file      (mf/deref refs/workspace-file)
         locale    (mf/deref i18n/locale)
         team-id   (mf/use-ctx ctx/current-team-id)
@@ -697,7 +699,7 @@
         :open? true
         :filters @filters}]
 
-      (for [file (->> (vals libraries)
+      (for [file (->> libraries
                       (sort-by #(str/lower (:name %))))]
         [:& file-library
          {:key (:id file)