diff --git a/src/store.ts b/src/store.ts
index 4bcb6545..e95b0222 100644
--- a/src/store.ts
+++ b/src/store.ts
@@ -137,6 +137,7 @@ export function makeObserver(): Observer {
           );
         }
         if (newVal !== value) {
+          unobserve(value);
           value = newVal;
           observe(newVal, obj);
           obj.__owl__.rev!++;
@@ -229,6 +230,12 @@ export function makeObserver(): Observer {
     }
   }
 
+  function unobserve(target: any) {
+    if (target !== null && typeof target === "object") {
+      delete target.__owl__;
+    }
+  }
+
   return observer;
 }
 
diff --git a/tests/store.test.ts b/tests/store.test.ts
index 01c618d8..3c9929c3 100644
--- a/tests/store.test.ts
+++ b/tests/store.test.ts
@@ -308,6 +308,18 @@ describe("observer", () => {
     expect(state.a.__owl__.rev).toBe(2);
   });
 
+  test("properly unobserve objects in object", () => {
+    const observer = makeObserver();
+    const state: any = { a: { b: 1 } };
+    observer.observe(state);
+    expect(state.__owl__.rev).toBe(1);
+    const initialA = state.a;
+    expect(initialA.__owl__.rev).toBe(1);
+
+    state.a = "Karlsquell";
+    expect(initialA.__owl__).not.toBeDefined();
+  });
+
   test("reobserve new object values", () => {
     const observer = makeObserver();
     const obj: any = { a: 1 };