diff --git a/examples/data-router/src/app.tsx b/examples/data-router/src/app.tsx
index 4cf6396a7e..1de88ac21b 100644
--- a/examples/data-router/src/app.tsx
+++ b/examples/data-router/src/app.tsx
@@ -49,9 +49,17 @@ let router = createBrowserRouter([
         ],
       },
       {
+        id: "deferred",
         path: "deferred",
         loader: deferredLoader,
         Component: DeferredPage,
+        children: [
+          {
+            index: true,
+            loader: childLoader,
+            Component: DeferredChild
+          }
+        ]
       },
     ],
   },
@@ -378,6 +386,8 @@ export function DeferredPage() {
           <RenderAwaitedData />
         </Await>
       </React.Suspense>
+
+      <Outlet />
     </div>
   );
 }
@@ -397,3 +407,21 @@ function RenderAwaitedError() {
     </p>
   );
 }
+
+export async function childLoader({ routeLoaderData }: LoaderFunctionArgs) {
+  const dataPromise = routeLoaderData("deferred")! as Promise<DeferredRouteLoaderData>
+  return defer({
+    lazy2: dataPromise.then(data => data.lazy2.then((message) => "Child: " + message))
+  })
+}
+
+export function DeferredChild(): React.ReactElement {
+  let data = useLoaderData() as Pick<DeferredRouteLoaderData, 'lazy2'>;
+  return <div>
+    <React.Suspense fallback={<p>Child: loading 2...</p>}>
+        <Await resolve={data.lazy2}>
+          <RenderAwaitedData />
+        </Await>
+      </React.Suspense>
+  </div>
+}
diff --git a/packages/router/router.ts b/packages/router/router.ts
index bdea4b0ccf..7fa42b907e 100644
--- a/packages/router/router.ts
+++ b/packages/router/router.ts
@@ -7,47 +7,45 @@ import {
   parsePath,
   warning,
 } from "./history";
-import type {
+import {
   ActionFunction,
   AgnosticDataRouteMatch,
   AgnosticDataRouteObject,
   AgnosticRouteObject,
+  convertRouteMatchToUiMatch,
+  convertRoutesToDataRoutes,
   DataResult,
   DeferredData,
   DeferredResult,
   DetectErrorBoundaryFunction,
+  ErrorResponseImpl,
   ErrorResult,
   FormEncType,
   FormMethod,
+  getPathContributingMatches,
+  getResolveToMatches,
   HTMLFormMethod,
   ImmutableRouteKey,
+  immutableRouteKeys,
+  isRouteErrorResponse,
+  joinPaths,
   LoaderFunction,
   MapRoutePropertiesFunction,
+  matchRoutes,
   MutationFormMethod,
   RedirectResult,
+  resolveTo,
+  ResultType,
   RouteData,
   RouteManifest,
   ShouldRevalidateFunctionArgs,
+  stripBasename,
   Submission,
   SuccessResult,
   UIMatch,
   V7_FormMethod,
   V7_MutationFormMethod,
 } from "./utils";
-import {
-  ErrorResponseImpl,
-  ResultType,
-  convertRouteMatchToUiMatch,
-  convertRoutesToDataRoutes,
-  getPathContributingMatches,
-  getResolveToMatches,
-  immutableRouteKeys,
-  isRouteErrorResponse,
-  joinPaths,
-  matchRoutes,
-  resolveTo,
-  stripBasename,
-} from "./utils";
 
 ////////////////////////////////////////////////////////////////////////////////
 //#region Types and Constants
@@ -1586,7 +1584,8 @@ export function createRouter(init: RouterInit): Router {
         manifest,
         mapRouteProperties,
         basename,
-        future.v7_relativeSplatPath
+        future.v7_relativeSplatPath,
+        undefined
       );
 
       if (request.signal.aborted) {
@@ -1989,7 +1988,8 @@ export function createRouter(init: RouterInit): Router {
       manifest,
       mapRouteProperties,
       basename,
-      future.v7_relativeSplatPath
+      future.v7_relativeSplatPath,
+      undefined
     );
 
     if (fetchRequest.signal.aborted) {
@@ -2240,7 +2240,9 @@ export function createRouter(init: RouterInit): Router {
       manifest,
       mapRouteProperties,
       basename,
-      future.v7_relativeSplatPath
+      future.v7_relativeSplatPath,
+      // TODO
+      {}
     );
 
     // Deferred isn't supported for fetcher loads, await everything and treat it
@@ -2419,6 +2421,68 @@ export function createRouter(init: RouterInit): Router {
     }
   }
 
+  type MatchNode = {
+    match: AgnosticDataRouteMatch
+    ancestor?: MatchNode
+    descendents: MatchNode[]
+  }
+
+  function createMatcherForest(matches: AgnosticDataRouteMatch[]): MatchNode[] {
+    // Create all the nodes with no edges.
+    const forest = new Map<string, MatchNode>(matches.map(match => [match.route.id, {match, descendents: []}]))
+
+    // Keep track of the routes that we have visited already.
+    const visited = new Set<string>()
+
+    // We iterate over every match doing a breadth first traversal of all its
+    // descendents, creating edges between our nodes as we go. For any two
+    // matches, one is almost certainly forms a subtree of the other so most
+    // iterations will do nothing.
+    matches.forEach(match => {
+      // The queue has the remaining children at the front and the grandchildren
+      // at the back.
+      const queue: {
+        routes: AgnosticDataRouteObject[],
+        ancestor?: MatchNode
+      }[] = [{ routes: [match.route] }]
+      while (queue.length > 0) {
+        const next = queue.shift()
+        if (next) {
+          const { routes, ancestor } = next
+            routes.forEach(route => {
+              if (!visited.has(route.id)) {
+                visited.add(route.id)
+                // We only care about the routes with matches, but we still need
+                // to traverse the others.
+                const matchNode = forest.get(route.id)
+                let nextAncestor = ancestor
+                if (matchNode) {
+                  // Add the edge in both directions.
+                  matchNode.ancestor = ancestor
+                  if (ancestor) {
+                    ancestor.descendents.push(matchNode)
+                  }
+                  // The current node will be the ancestor for its descendents,
+                  // otherwise it will be the previous ancestor (we only track
+                  // the routes with matches).
+                  nextAncestor = matchNode
+                }
+                const nextRoutes = route.children ? route.children : []
+                queue.push({ routes: nextRoutes, ancestor: nextAncestor })
+              }
+            })
+        }
+      }
+    })
+
+    // Now we just need to find all the sources of each tree.
+    const sources: MatchNode[] = []
+    for (const matchNode of forest.values()) {
+      if (!matchNode.ancestor) sources.push(matchNode)
+    }
+    return sources
+  }
+
   async function callLoadersAndMaybeResolveData(
     currentMatches: AgnosticDataRouteMatch[],
     matches: AgnosticDataRouteMatch[],
@@ -2426,22 +2490,58 @@ export function createRouter(init: RouterInit): Router {
     fetchersToLoad: RevalidatingFetcher[],
     request: Request
   ) {
+    // We need to ensure that descendents loaders are started after their
+    // ancestors so that we can provide the loader result promise to the
+    // descendents. To do this we create a forest of all routes to load and then
+    // traverse the forest from each source node.
+    const sources = createMatcherForest(matchesToLoad)
+
+    // Now we do depth first traversal of each source, starting each loader,
+    // and keeping track of the ancestor loader results as we go.
+    const allResults: Promise<DataResult>[] = []
+    sources.forEach(source => {
+      const queue = [[source]]
+      const ancestorData : [string, Promise<any | undefined>][] = []
+      while (queue.length > 0) {
+        const nodes = queue[0]
+        const node = nodes.shift()
+        if (node) {
+          // Going down.
+          const resultPromise = callLoaderOrAction(
+            "loader",
+            request,
+            node.match,
+            matches,
+            manifest,
+            mapRouteProperties,
+            basename,
+            future.v7_relativeSplatPath,
+            // Need a shallow copy of these since we are mutating them.
+            Object.fromEntries(ancestorData),
+          )
+          allResults.push(resultPromise)
+          const data = resultPromise.then(result => {
+            if (result.type === ResultType.data) {
+              return result.data
+            } else if (isDeferredResult(result)) {
+              return resolveDeferredData(result, request.signal).then(resolved => resolved?.type === ResultType.data ? resolved.data : undefined)
+            }
+          })
+          ancestorData.push([node.match.route.id, data])
+          queue.unshift(node.descendents)
+        } else {
+          // Going back up.
+          ancestorData.shift()
+          queue.shift()
+        }
+      }
+    })
+
     // Call all navigation loaders and revalidating fetcher loaders in parallel,
     // then slice off the results into separate arrays so we can handle them
     // accordingly
     let results = await Promise.all([
-      ...matchesToLoad.map((match) =>
-        callLoaderOrAction(
-          "loader",
-          request,
-          match,
-          matches,
-          manifest,
-          mapRouteProperties,
-          basename,
-          future.v7_relativeSplatPath
-        )
-      ),
+      ...allResults.values(),
       ...fetchersToLoad.map((f) => {
         if (f.matches && f.match && f.controller) {
           return callLoaderOrAction(
@@ -2452,7 +2552,9 @@ export function createRouter(init: RouterInit): Router {
             manifest,
             mapRouteProperties,
             basename,
-            future.v7_relativeSplatPath
+            future.v7_relativeSplatPath,
+            // TODO
+            {}
           );
         } else {
           let error: ErrorResult = {
@@ -3148,6 +3250,7 @@ export function createStaticHandler(
         mapRouteProperties,
         basename,
         future.v7_relativeSplatPath,
+        undefined,
         { isStaticRequest: true, isRouteRequest, requestContext }
       );
 
@@ -3314,6 +3417,8 @@ export function createStaticHandler(
           mapRouteProperties,
           basename,
           future.v7_relativeSplatPath,
+          // TODO:
+          {},
           { isStaticRequest: true, isRouteRequest, requestContext }
         )
       ),
@@ -3940,8 +4045,11 @@ async function loadLazyRouteModule(
   });
 }
 
-async function callLoaderOrAction(
-  type: "loader" | "action",
+type LoaderOrActionResultData<T extends "loader" | "action"> =
+  T extends "loader" ? Record<string, Promise<any | undefined>> : undefined
+
+async function callLoaderOrAction<T extends "loader" | "action">(
+  type: T,
   request: Request,
   match: AgnosticDataRouteMatch,
   matches: AgnosticDataRouteMatch[],
@@ -3949,6 +4057,7 @@ async function callLoaderOrAction(
   mapRouteProperties: MapRoutePropertiesFunction,
   basename: string,
   v7_relativeSplatPath: boolean,
+  ancestorData: LoaderOrActionResultData<T>,
   opts: {
     isStaticRequest?: boolean;
     isRouteRequest?: boolean;
@@ -3959,7 +4068,7 @@ async function callLoaderOrAction(
   let result;
   let onReject: (() => void) | undefined;
 
-  let runHandler = (handler: ActionFunction | LoaderFunction) => {
+  let runHandler = (handler: ActionFunction) => {
     // Setup a promise we can race against so that abort signals short circuit
     let reject: () => void;
     let abortPromise = new Promise((_, r) => (reject = r));
@@ -3975,8 +4084,19 @@ async function callLoaderOrAction(
     ]);
   };
 
+  function loaderToAction(loader: LoaderFunction, ancestorResults: Record<string, Promise<any | undefined>>): ActionFunction {
+    const routeLoaderData = (routeId: string) => ancestorResults[routeId]
+    return (args) => loader({...args, routeLoaderData })
+  }
+
+  function getHandler() {
+    return type === "loader" ?
+      match.route.loader === undefined ? undefined : loaderToAction(match.route.loader, ancestorData!) :
+      match.route.action
+  }
+
   try {
-    let handler = match.route[type];
+    let handler = getHandler();
 
     if (match.route.lazy) {
       if (handler) {
@@ -3999,7 +4119,7 @@ async function callLoaderOrAction(
         // Load lazy route module, then run any returned handler
         await loadLazyRouteModule(match.route, mapRouteProperties, manifest);
 
-        handler = match.route[type];
+        handler = getHandler();
         if (handler) {
           // Handler still run even if we got interrupted to maintain consistency
           // with un-abortable behavior of handler execution on non-lazy or
diff --git a/packages/router/utils.ts b/packages/router/utils.ts
index 4bb9f48e1d..8a6cc4f019 100644
--- a/packages/router/utils.ts
+++ b/packages/router/utils.ts
@@ -147,11 +147,19 @@ interface DataFunctionArgs<Context> {
 //   ActionFunction, ActionFunctionArgs, LoaderFunction, LoaderFunctionArgs
 //   Also, make them a type alias instead of an interface
 
+interface RouteLoaderDataFunction {
+  (routeId: string):
+    | Promise<DataFunctionValue>
+    | undefined;
+}
+
 /**
  * Arguments passed to loader functions
  */
 export interface LoaderFunctionArgs<Context = any>
-  extends DataFunctionArgs<Context> {}
+  extends DataFunctionArgs<Context> {
+  routeLoaderData: RouteLoaderDataFunction
+}
 
 /**
  * Arguments passed to action functions