diff --git a/editor/src/messages/portfolio/document/document_message_handler.rs b/editor/src/messages/portfolio/document/document_message_handler.rs
index 799fa74631..72184b5b96 100644
--- a/editor/src/messages/portfolio/document/document_message_handler.rs
+++ b/editor/src/messages/portfolio/document/document_message_handler.rs
@@ -573,7 +573,7 @@ impl MessageHandler<DocumentMessage, DocumentMessageContext<'_>> for DocumentMes
 					self.node_graph_handler.context_menu = None;
 					responses.add(FrontendMessage::UpdateContextMenuInformation { context_menu_information: None });
 				}
-				// Exit one level up if inside a nested network
+				// Go back up one level in the breadcrumb path if we're in a subgraph
 				else if !self.breadcrumb_network_path.is_empty() {
 					responses.add(DocumentMessage::ExitNestedNetwork { steps_back: 1 });
 				}
diff --git a/editor/src/messages/portfolio/document_migration.rs b/editor/src/messages/portfolio/document_migration.rs
index a826225f16..0fb342d900 100644
--- a/editor/src/messages/portfolio/document_migration.rs
+++ b/editor/src/messages/portfolio/document_migration.rs
@@ -1226,6 +1226,30 @@ pub fn document_migration_upgrades(document: &mut DocumentMessageHandler, reset_
 		}
 	}
 
+	// The "Image" wrapper network was replaced with the `image` proto node directly. Convert old `Network("Image")` instances to the proto node, forwarding the embedded image data so the `image` pass in `migrate_node` below turns it into a resource.
+	// Pre-pass for the same reason as the Brush and Transform migrations above: replacing the outer Image's network impl orphans its child paths.
+	let image_layers: Vec<(NodeId, Vec<NodeId>)> = document
+		.network_interface
+		.document_network()
+		.recursive_nodes()
+		.filter_map(|(node_id, _, path)| (document.network_interface.reference(node_id, &path) == Some(DefinitionIdentifier::Network("Image".into()))).then_some((*node_id, path)))
+		.collect();
+	for (node_id, network_path) in &image_layers {
+		let _ = document.network_interface.outward_wires(network_path);
+		let new_reference = DefinitionIdentifier::ProtoNode(graphene_std::raster_nodes::std_nodes::image::IDENTIFIER);
+		let Some(definition) = resolve_document_node_type(&new_reference) else { continue };
+		let mut node_template = definition.default_node_template();
+		document.network_interface.replace_implementation(node_id, network_path, &mut node_template);
+		let Some(old_inputs) = document.network_interface.replace_inputs(node_id, network_path, &mut node_template) else {
+			continue;
+		};
+
+		// Forward the embedded image data into input 0, where the `migrate_node` `image` pass finds it and converts it to a resource.
+		if let Some(image_input) = old_inputs.into_iter().find(|input| matches!(input.as_value(), Some(TaggedValue::ImageData(_)))) {
+			document.network_interface.set_input(&InputConnector::node(*node_id, 0), image_input, network_path);
+		}
+	}
+
 	// Apply upgrades to each unmodified node.
 	let nodes = document
 		.network_interface
diff --git a/node-graph/graph-craft/src/document/value.rs b/node-graph/graph-craft/src/document/value.rs
index ab137a24c9..69c92db887 100644
--- a/node-graph/graph-craft/src/document/value.rs
+++ b/node-graph/graph-craft/src/document/value.rs
@@ -623,7 +623,11 @@ pub fn deserialize_tagged_value_with_legacy_migration<'de, D: serde::Deserialize
 			"Graphic" | "GraphicGroup" | "Group" => return Ok(MemoHash::new(TaggedValue::TypeDefault(descriptor!(List<Graphic>)))),
 			"Artboard" | "ArtboardGroup" => return Ok(MemoHash::new(TaggedValue::TypeDefault(descriptor!(List<Artboard>)))),
 			"Raster" | "ImageFrame" | "RasterData" | "Image" => {
-				let first_element = content.as_object().and_then(|c| c.get("element")).and_then(|e| e.as_array()).and_then(|arr| arr.first());
+				let first_element = content
+					.as_object()
+					.and_then(|c| c.get("element").or_else(|| c.get("instance")).or_else(|| c.get("instances")))
+					.and_then(|e| e.as_array())
+					.and_then(|arr| arr.first());
 				if let Some(image_value) = first_element {
 					let image: Image<Color> = serde_json::from_value(image_value.clone()).map_err(serde::de::Error::custom)?;
 					return Ok(MemoHash::new(TaggedValue::ImageData(image)));