diff --git a/index.js b/index.js
index 81260671..93fd8b34 100644
--- a/index.js
+++ b/index.js
@@ -96,16 +96,22 @@ const fastifyAutoload = async function autoload (fastify, options) {
           // encapsulate hooks at plugin level
           app.register(hookPlugin)
         }
-        registerAllPlugins(app, pluginFiles)
+        registerAllPlugins(app, pluginFiles, true)
       }
-      fastify.register(composedPlugin)
+
+      fastify.register(composedPlugin, { prefix: options.options?.prefix ?? prefix })
     }
   }
 
-  function registerAllPlugins (app, pluginFiles) {
+  function registerAllPlugins (app, pluginFiles, composed = false) {
     for (const pluginFile of pluginFiles) {
       // find plugins for this prefix, based on filename stored in registerPlugins()
       const plugin = metas.find((i) => i.filename === pluginFile.file)
+
+      if (composed) {
+        plugin.options.prefix = undefined
+      }
+
       // register plugins at fastify level
       if (plugin) registerPlugin(app, plugin, pluginsMeta)
     }
diff --git a/test/issues/326/autohooks/index.js b/test/issues/326/autohooks/index.js
new file mode 100644
index 00000000..93d93f27
--- /dev/null
+++ b/test/issues/326/autohooks/index.js
@@ -0,0 +1,19 @@
+'use strict'
+
+const path = require('node:path')
+const autoLoad = require('../../../../')
+
+module.exports = async function (fastify) {
+  fastify.register(autoLoad, {
+    dir: path.join(__dirname, '/routes-a'),
+    autoHooks: true,
+    cascadeHooks: true
+  })
+
+  fastify.register(autoLoad, {
+    dir: path.join(__dirname, '/routes-b'),
+    autoHooks: true,
+    cascadeHooks: true,
+    options: { prefix: 'custom-prefix' }
+  })
+}
diff --git a/test/issues/326/autohooks/routes-a/child/.autohooks.js b/test/issues/326/autohooks/routes-a/child/.autohooks.js
new file mode 100644
index 00000000..37e7bed8
--- /dev/null
+++ b/test/issues/326/autohooks/routes-a/child/.autohooks.js
@@ -0,0 +1,7 @@
+module.exports = async function (app) {
+  app.setNotFoundHandler((request, reply) => {
+    reply.code(404)
+      .header('from', 'routes-a/child')
+      .send()
+  });
+}
diff --git a/test/issues/326/autohooks/routes-a/child/routes.js b/test/issues/326/autohooks/routes-a/child/routes.js
new file mode 100644
index 00000000..8d16accd
--- /dev/null
+++ b/test/issues/326/autohooks/routes-a/child/routes.js
@@ -0,0 +1,7 @@
+'use strict'
+
+module.exports = async function (app) {
+  app.get('/', async function (req, reply) {
+    reply.send()
+  })
+}
diff --git a/test/issues/326/autohooks/routes-a/sibling/.autohooks.js b/test/issues/326/autohooks/routes-a/sibling/.autohooks.js
new file mode 100644
index 00000000..3d63b457
--- /dev/null
+++ b/test/issues/326/autohooks/routes-a/sibling/.autohooks.js
@@ -0,0 +1,7 @@
+module.exports = async function (app) {
+  app.setNotFoundHandler((request, reply) => {
+    reply.code(404)
+      .header('from', 'routes-a/sibling')
+      .send()
+  });
+}
diff --git a/test/issues/326/autohooks/routes-a/sibling/routes.js b/test/issues/326/autohooks/routes-a/sibling/routes.js
new file mode 100644
index 00000000..8d16accd
--- /dev/null
+++ b/test/issues/326/autohooks/routes-a/sibling/routes.js
@@ -0,0 +1,7 @@
+'use strict'
+
+module.exports = async function (app) {
+  app.get('/', async function (req, reply) {
+    reply.send()
+  })
+}
diff --git a/test/issues/326/autohooks/routes-b/child/.autohooks.js b/test/issues/326/autohooks/routes-b/child/.autohooks.js
new file mode 100644
index 00000000..a002c29b
--- /dev/null
+++ b/test/issues/326/autohooks/routes-b/child/.autohooks.js
@@ -0,0 +1,7 @@
+module.exports = async function (app) {
+  app.setNotFoundHandler((request, reply) => {
+    reply.code(404)
+      .header('from', 'routes-b')
+      .send()
+  });
+}
diff --git a/test/issues/326/autohooks/routes-b/child/routes.js b/test/issues/326/autohooks/routes-b/child/routes.js
new file mode 100644
index 00000000..8d16accd
--- /dev/null
+++ b/test/issues/326/autohooks/routes-b/child/routes.js
@@ -0,0 +1,7 @@
+'use strict'
+
+module.exports = async function (app) {
+  app.get('/', async function (req, reply) {
+    reply.send()
+  })
+}
diff --git a/test/issues/326/test.js b/test/issues/326/test.js
new file mode 100644
index 00000000..58f4f99f
--- /dev/null
+++ b/test/issues/326/test.js
@@ -0,0 +1,80 @@
+'use strict'
+
+const t = require('tap')
+const Fastify = require('fastify')
+
+t.plan(19)
+
+const app = Fastify()
+
+app.register(require('./autohooks'))
+
+app.setNotFoundHandler((request, reply) => {
+  reply.code(404)
+    .header('from', 'root')
+    .send()
+})
+
+app.ready(function (err) {
+  t.error(err)
+
+  app.inject({
+    url: '/not-exists'
+  }, function (err, res) {
+    t.error(err)
+    t.equal(res.headers.from, 'root')
+
+    t.equal(res.statusCode, 404)
+  })
+
+  app.inject({
+    url: '/child'
+  }, function (err, res) {
+    t.error(err)
+
+    t.equal(res.statusCode, 200)
+  })
+
+  app.inject({
+    url: '/child/not-exists'
+  }, function (err, res) {
+    t.error(err)
+    t.equal(res.headers.from, 'routes-a/child')
+
+    t.equal(res.statusCode, 404)
+  })
+
+  app.inject({
+    url: '/sibling'
+  }, function (err, res) {
+    t.error(err)
+
+    t.equal(res.statusCode, 200)
+  })
+
+  app.inject({
+    url: '/sibling/not-exists'
+  }, function (err, res) {
+    t.error(err)
+    t.equal(res.headers.from, 'routes-a/sibling')
+
+    t.equal(res.statusCode, 404)
+  })
+
+  app.inject({
+    url: '/custom-prefix'
+  }, function (err, res) {
+    t.error(err)
+
+    t.equal(res.statusCode, 200)
+  })
+
+  app.inject({
+    url: '/custom-prefix/not-exists'
+  }, function (err, res) {
+    t.error(err)
+    t.equal(res.headers.from, 'routes-b')
+
+    t.equal(res.statusCode, 404)
+  })
+})