diff --git a/dts/bindings/test/vnd,great-grandchild-bindings.yaml b/dts/bindings/test/vnd,great-grandchild-bindings.yaml
new file mode 100644
index 00000000000..c2a89b550ce
--- /dev/null
+++ b/dts/bindings/test/vnd,great-grandchild-bindings.yaml
@@ -0,0 +1,27 @@
+# Copyright (c) 2020 Nordic Semiconductor ASA
+# SPDX-License-Identifier: Apache-2.0
+
+description: |
+  Test binding for 3 levels of "child-binding".
+
+  Previous versions of Zephyr only allowed up to two levels of
+  "child-binding:" in a YAML file. This file is used to test that the
+  restriction no longer holds.
+
+compatible: "vnd,great-grandchild-bindings"
+
+include: [base.yaml]
+
+child-binding:
+  description: child node, no properties
+
+  child-binding:
+    description: grandchild node, no properties
+
+    child-binding:
+      description: great-grandchild node, ggc-prop property
+
+      properties:
+        ggc-prop:
+          type: int
+          required: true
diff --git a/tests/lib/devicetree/app.overlay b/tests/lib/devicetree/app.overlay
index 5ad052821bb..913fc72d2a3 100644
--- a/tests/lib/devicetree/app.overlay
+++ b/tests/lib/devicetree/app.overlay
@@ -332,5 +332,17 @@
 				val = <2>;
 			};
 		};
+
+		test-great-grandchildren {
+			compatible = "vnd,great-grandchild-bindings";
+
+			child {
+				grandchild {
+					test_ggc: great-grandchild {
+						ggc-prop = <42>;
+					};
+				};
+			};
+		};
 	};
 };
diff --git a/tests/lib/devicetree/src/main.c b/tests/lib/devicetree/src/main.c
index cdf1d5fdd14..c83475e513f 100644
--- a/tests/lib/devicetree/src/main.c
+++ b/tests/lib/devicetree/src/main.c
@@ -1442,6 +1442,12 @@ static void test_child_nodes_list(void)
 	#undef TEST_FUNC
 }
 
+static void test_great_grandchild(void)
+{
+	zassert_equal(DT_PROP(DT_NODELABEL(test_ggc), ggc_prop),
+		      42, "great-grandchild bindings returned wrong value");
+}
+
 void test_main(void)
 {
 	ztest_test_suite(devicetree_api,
@@ -1471,7 +1477,8 @@ void test_main(void)
 			 ztest_unit_test(test_enums),
 			 ztest_unit_test(test_clocks),
 			 ztest_unit_test(test_parent),
-			 ztest_unit_test(test_child_nodes_list)
+			 ztest_unit_test(test_child_nodes_list),
+			 ztest_unit_test(test_great_grandchild)
 		);
 	ztest_run_test_suite(devicetree_api);
 }