diff --git a/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/__tests__/applySiblingStyle.test.ts b/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/__tests__/applySiblingStyle.test.ts
new file mode 100644
index 000000000..0f8b0b103
--- /dev/null
+++ b/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/__tests__/applySiblingStyle.test.ts
@@ -0,0 +1,82 @@
+import { applySiblingStyleId } from '../applySiblingStyle';
+import * as getSiblingStyleId from '../getSiblingStyleId';
+
+describe('applySiblingStyleId', () => {
+    const getNewStyleIdSpy = jest.spyOn(getSiblingStyleId, 'getNewStyleId');
+
+    beforeEach(() => {
+        getNewStyleIdSpy.mockReset();
+    });
+
+    it('should swap styles and recurse into children for a FRAME', async () => {
+        const mockChild = {
+            type: 'RECTANGLE',
+            fillStyleId: 'style-1',
+        };
+        const mockNode = {
+            type: 'FRAME',
+            children: [mockChild],
+            fillStyleId: 'style-2',
+        } as any;
+
+        getNewStyleIdSpy.mockResolvedValue('new-style');
+
+        await applySiblingStyleId(mockNode, {}, {}, []);
+
+        expect(getNewStyleIdSpy).toHaveBeenCalledWith('style-2', {}, {}, []);
+        expect(getNewStyleIdSpy).toHaveBeenCalledWith('style-1', {}, {}, []);
+        expect(mockNode.fillStyleId).toBe('new-style');
+        expect(mockChild.fillStyleId).toBe('new-style');
+    });
+
+    it('should skip INSTANCE children but process the COMPONENT itself', async () => {
+        const mockInstanceChild = {
+            type: 'INSTANCE',
+            fillStyleId: 'style-instance',
+        };
+        const mockRectChild = {
+            type: 'RECTANGLE',
+            fillStyleId: 'style-rect',
+        };
+        const mockNode = {
+            type: 'COMPONENT',
+            children: [mockInstanceChild, mockRectChild],
+            fillStyleId: 'style-comp',
+        } as any;
+
+        getNewStyleIdSpy.mockResolvedValue('new-style');
+
+        await applySiblingStyleId(mockNode, {}, {}, []);
+
+        // Should be called for COMPONENT and RECTANGLE, but NOT INSTANCE child
+        expect(getNewStyleIdSpy).toHaveBeenCalledWith('style-comp', {}, {}, []);
+        expect(getNewStyleIdSpy).toHaveBeenCalledWith('style-rect', {}, {}, []);
+        expect(getNewStyleIdSpy).not.toHaveBeenCalledWith('style-instance', {}, {}, []);
+
+        expect(mockNode.fillStyleId).toBe('new-style');
+        expect(mockRectChild.fillStyleId).toBe('new-style');
+        expect(mockInstanceChild.fillStyleId).toBe('style-instance'); // Should remain unchanged
+    });
+
+    it('should skip INSTANCE children but process the COMPONENT_SET itself', async () => {
+        const mockInstanceChild = {
+            type: 'INSTANCE',
+            fillStyleId: 'style-instance',
+        };
+        const mockNode = {
+            type: 'COMPONENT_SET',
+            children: [mockInstanceChild],
+            fillStyleId: 'style-comp-set',
+        } as any;
+
+        getNewStyleIdSpy.mockResolvedValue('new-style');
+
+        await applySiblingStyleId(mockNode, {}, {}, []);
+
+        expect(getNewStyleIdSpy).toHaveBeenCalledWith('style-comp-set', {}, {}, []);
+        expect(getNewStyleIdSpy).not.toHaveBeenCalledWith('style-instance', {}, {}, []);
+
+        expect(mockNode.fillStyleId).toBe('new-style');
+        expect(mockInstanceChild.fillStyleId).toBe('style-instance');
+    });
+});
diff --git a/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/applySiblingStyle.ts b/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/applySiblingStyle.ts
index 240b21a7a..c8f2a71a1 100644
--- a/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/applySiblingStyle.ts
+++ b/packages/tokens-studio-for-figma/src/plugin/asyncMessageHandlers/applySiblingStyle.ts
@@ -78,7 +78,12 @@ export async function applySiblingStyleId(node: BaseNode, styleIds: StyleIdMap,
             node.effectStyleId = newEffectStyleId;
           }
           if (['COMPONENT', 'COMPONENT_SET', 'SECTION', 'INSTANCE', 'FRAME', 'BOOLEAN_OPERATION'].includes(node.type) && 'children' in node) {
-            await Promise.all(node.children.map((child) => applySiblingStyleId(child, styleIds, styleMap, activeThemes)));
+            await Promise.all(node.children.map((child) => {
+              if ((node.type === 'COMPONENT' || node.type === 'COMPONENT_SET') && child.type === 'INSTANCE') {
+                return Promise.resolve();
+              }
+              return applySiblingStyleId(child, styleIds, styleMap, activeThemes);
+            }));
           }
         }
         break;
diff --git a/packages/tokens-studio-for-figma/src/utils/__tests__/findAll.test.ts b/packages/tokens-studio-for-figma/src/utils/__tests__/findAll.test.ts
new file mode 100644
index 000000000..de7139049
--- /dev/null
+++ b/packages/tokens-studio-for-figma/src/utils/__tests__/findAll.test.ts
@@ -0,0 +1,94 @@
+import { ValidNodeTypes } from '@/constants/ValidNodeTypes';
+import { findAll } from '../findAll';
+
+describe('findAll', () => {
+    it('should find all nodes including self', () => {
+        const mockNodes = [
+            {
+                id: '1',
+                type: 'FRAME',
+                children: [
+                    { id: '2', type: 'RECTANGLE' },
+                ],
+                findAllWithCriteria: jest.fn().mockReturnValue([{ id: '2', type: 'RECTANGLE' }]),
+            },
+        ] as any;
+
+        const result = findAll(mockNodes, true);
+        expect(result).toHaveLength(2);
+        expect(result.map(n => n.id)).toContain('1');
+        expect(result.map(n => n.id)).toContain('2');
+    });
+
+    it('should exclude instances when recursing from a COMPONENT', () => {
+        const mockNodes = [
+            {
+                id: 'component-1',
+                type: 'COMPONENT',
+                children: [
+                    { id: 'rect-1', type: 'RECTANGLE' },
+                    { id: 'instance-1', type: 'INSTANCE' },
+                ],
+                findAllWithCriteria: jest.fn().mockReturnValue([
+                    { id: 'rect-1', type: 'RECTANGLE' },
+                    { id: 'instance-1', type: 'INSTANCE' },
+                ]),
+            },
+        ] as any;
+
+        const result = findAll(mockNodes, true);
+        // Should include COMPONENT and RECTANGLE, but NOT INSTANCE
+        expect(result).toHaveLength(2);
+        expect(result.map(n => n.id)).toContain('component-1');
+        expect(result.map(n => n.id)).toContain('rect-1');
+        expect(result.map(n => n.id)).not.toContain('instance-1');
+    });
+
+    it('should exclude instances when recursing from a COMPONENT_SET', () => {
+        const mockNodes = [
+            {
+                id: 'component-set-1',
+                type: 'COMPONENT_SET',
+                children: [
+                    { id: 'rect-1', type: 'RECTANGLE' },
+                    { id: 'instance-1', type: 'INSTANCE' },
+                ],
+                findAllWithCriteria: jest.fn().mockReturnValue([
+                    { id: 'rect-1', type: 'RECTANGLE' },
+                    { id: 'instance-1', type: 'INSTANCE' },
+                ]),
+            },
+        ] as any;
+
+        const result = findAll(mockNodes, true);
+        // Should include COMPONENT_SET and RECTANGLE, but NOT INSTANCE
+        expect(result).toHaveLength(2);
+        expect(result.map(n => n.id)).toContain('component-set-1');
+        expect(result.map(n => n.id)).toContain('rect-1');
+        expect(result.map(n => n.id)).not.toContain('instance-1');
+    });
+
+    it('should NOT exclude instances when recursing from a FRAME', () => {
+        const mockNodes = [
+            {
+                id: 'frame-1',
+                type: 'FRAME',
+                children: [
+                    { id: 'rect-1', type: 'RECTANGLE' },
+                    { id: 'instance-1', type: 'INSTANCE' },
+                ],
+                findAllWithCriteria: jest.fn().mockReturnValue([
+                    { id: 'rect-1', type: 'RECTANGLE' },
+                    { id: 'instance-1', type: 'INSTANCE' },
+                ]),
+            },
+        ] as any;
+
+        const result = findAll(mockNodes, true);
+        // Should include FRAME, RECTANGLE, AND INSTANCE
+        expect(result).toHaveLength(3);
+        expect(result.map(n => n.id)).toContain('frame-1');
+        expect(result.map(n => n.id)).toContain('rect-1');
+        expect(result.map(n => n.id)).toContain('instance-1');
+    });
+});
diff --git a/packages/tokens-studio-for-figma/src/utils/findAll.ts b/packages/tokens-studio-for-figma/src/utils/findAll.ts
index 013e40f9a..d42e13010 100644
--- a/packages/tokens-studio-for-figma/src/utils/findAll.ts
+++ b/packages/tokens-studio-for-figma/src/utils/findAll.ts
@@ -11,12 +11,16 @@ export function findAll(nodes: readonly BaseNode[], includeSelf = false, nodesWi
     };
   nodes.forEach((node) => {
     if ('children' in node) {
-      allNodes = allNodes.concat(
-        node.findAllWithCriteria({
-          types: ValidNodeTypes,
-          ...pluginDataOptions,
-        }),
-      );
+      const childNodes = node.findAllWithCriteria({
+        types: ValidNodeTypes,
+        ...pluginDataOptions,
+      });
+
+      const filteredChildren = node.type === 'COMPONENT' || node.type === 'COMPONENT_SET'
+        ? childNodes.filter((child) => child.type !== 'INSTANCE')
+        : childNodes;
+
+      allNodes = allNodes.concat(filteredChildren);
     }
   });
   return allNodes;