diff --git a/src/validators/function.rs b/src/validators/function.rs
index e65ff79c3..ddb096054 100644
--- a/src/validators/function.rs
+++ b/src/validators/function.rs
@@ -380,7 +380,9 @@ impl Validator for FunctionWrapValidator {
         let handler = Bound::new(py, handler)?;
         #[allow(clippy::used_underscore_items)]
         let result = self._validate(handler.as_any(), py, input, state);
-        state.exactness = handler.borrow_mut().validator.exactness;
+        let handler = handler.borrow();
+        state.exactness = handler.validator.exactness;
+        state.fields_set_count = handler.validator.fields_set_count;
         result
     }
 
diff --git a/src/validators/generator.rs b/src/validators/generator.rs
index 12d76b3be..b4be4c68f 100644
--- a/src/validators/generator.rs
+++ b/src/validators/generator.rs
@@ -225,6 +225,7 @@ pub struct InternalValidator {
     self_instance: Option<PyObject>,
     recursion_guard: RecursionState,
     pub(crate) exactness: Option<Exactness>,
+    pub(crate) fields_set_count: Option<usize>,
     validation_mode: InputType,
     hide_input_in_errors: bool,
     validation_error_cause: bool,
@@ -256,6 +257,7 @@ impl InternalValidator {
             self_instance: extra.self_instance.map(|d| d.clone().unbind()),
             recursion_guard: state.recursion_guard.clone(),
             exactness: state.exactness,
+            fields_set_count: state.fields_set_count,
             validation_mode: extra.input_type,
             hide_input_in_errors,
             validation_error_cause,
@@ -323,6 +325,7 @@ impl InternalValidator {
         };
         let mut state = ValidationState::new(extra, &mut self.recursion_guard, false.into());
         state.exactness = self.exactness;
+        state.fields_set_count = self.fields_set_count;
         let result = self.validator.validate(py, input, &mut state).map_err(|e| {
             ValidationError::from_val_error(
                 py,
@@ -335,6 +338,7 @@ impl InternalValidator {
             )
         });
         self.exactness = state.exactness;
+        self.fields_set_count = state.fields_set_count;
         result
     }
 }
diff --git a/tests/validators/test_union.py b/tests/validators/test_union.py
index f35ebfec0..7e0daacec 100644
--- a/tests/validators/test_union.py
+++ b/tests/validators/test_union.py
@@ -1358,3 +1358,83 @@ class Model:
 
     assert isinstance(validator.validate_python({'x': {'foo': 'foo'}}).x, Foo)
     assert isinstance(validator.validate_python({'x': {'bar': 'bar'}}).x, Bar)
+
+
+def test_smart_union_wrap_validator_should_not_change_nested_model_field_counts() -> None:
+    """Adding a wrap validator on a union member should not affect smart union behavior"""
+
+    class SubModel:
+        x: str = 'x'
+
+    class ModelA:
+        type: str = 'A'
+        sub: SubModel
+
+    class ModelB:
+        type: str = 'B'
+        sub: SubModel
+
+    submodel_schema = core_schema.model_schema(
+        SubModel,
+        core_schema.model_fields_schema(fields={'x': core_schema.model_field(core_schema.str_schema())}),
+    )
+
+    wrapped_submodel_schema = core_schema.no_info_wrap_validator_function(
+        lambda v, handler: handler(v), submodel_schema
+    )
+
+    model_a_schema = core_schema.model_schema(
+        ModelA,
+        core_schema.model_fields_schema(
+            fields={
+                'type': core_schema.model_field(
+                    core_schema.with_default_schema(core_schema.literal_schema(['A']), default='A'),
+                ),
+                'sub': core_schema.model_field(wrapped_submodel_schema),
+            },
+        ),
+    )
+
+    model_b_schema = core_schema.model_schema(
+        ModelB,
+        core_schema.model_fields_schema(
+            fields={
+                'type': core_schema.model_field(
+                    core_schema.with_default_schema(core_schema.literal_schema(['B']), default='B'),
+                ),
+                'sub': core_schema.model_field(submodel_schema),
+            },
+        ),
+    )
+
+    for choices in permute_choices([model_a_schema, model_b_schema]):
+        schema = core_schema.union_schema(choices)
+        validator = SchemaValidator(schema)
+
+        assert isinstance(validator.validate_python({'type': 'A', 'sub': {'x': 'x'}}), ModelA)
+        assert isinstance(validator.validate_python({'type': 'B', 'sub': {'x': 'x'}}), ModelB)
+
+        # defaults to leftmost choice if there's a tie
+        assert isinstance(validator.validate_python({'sub': {'x': 'x'}}), choices[0]['cls'])
+
+    # test validate_assignment
+    class RootModel:
+        ab: Union[ModelA, ModelB]
+
+    root_model = core_schema.model_schema(
+        RootModel,
+        core_schema.model_fields_schema(
+            fields={'ab': core_schema.model_field(core_schema.union_schema([model_a_schema, model_b_schema]))}
+        ),
+    )
+
+    validator = SchemaValidator(root_model)
+    m = validator.validate_python({'ab': {'type': 'B', 'sub': {'x': 'x'}}})
+    assert isinstance(m, RootModel)
+    assert isinstance(m.ab, ModelB)
+    assert m.ab.sub.x == 'x'
+
+    m = validator.validate_assignment(m, 'ab', {'sub': {'x': 'y'}})
+    assert isinstance(m, RootModel)
+    assert isinstance(m.ab, ModelA)
+    assert m.ab.sub.x == 'y'