diff --git a/src/google/adk/agents/base_agent.py b/src/google/adk/agents/base_agent.py
index 18a5de4..bdc10ac 100644
--- a/src/google/adk/agents/base_agent.py
+++ b/src/google/adk/agents/base_agent.py
@@ -246,8 +246,6 @@ class BaseAgent(BaseModel):
   ) -> InvocationContext:
     """Creates a new invocation context for this agent."""
     invocation_context = parent_context.model_copy(update={'agent': self})
-    if parent_context.branch:
-      invocation_context.branch = f'{parent_context.branch}.{self.name}'
     return invocation_context
 
   @property
diff --git a/src/google/adk/agents/parallel_agent.py b/src/google/adk/agents/parallel_agent.py
index 61ca41b..427128c 100644
--- a/src/google/adk/agents/parallel_agent.py
+++ b/src/google/adk/agents/parallel_agent.py
@@ -26,14 +26,20 @@ from ..events.event import Event
 from .base_agent import BaseAgent
 
 
-def _set_branch_for_current_agent(
-    current_agent: BaseAgent, invocation_context: InvocationContext
-):
+def _create_branch_ctx_for_sub_agent(
+    agent: BaseAgent,
+    sub_agent: BaseAgent,
+    invocation_context: InvocationContext,
+) -> InvocationContext:
+  """Create isolated branch for every sub-agent."""
+  invocation_context = invocation_context.model_copy()
+  branch_suffix = f"{agent.name}.{sub_agent.name}"
   invocation_context.branch = (
-      f"{invocation_context.branch}.{current_agent.name}"
+      f"{invocation_context.branch}.{branch_suffix}"
       if invocation_context.branch
-      else current_agent.name
+      else branch_suffix
   )
+  return invocation_context
 
 
 async def _merge_agent_run(
@@ -90,8 +96,12 @@ class ParallelAgent(BaseAgent):
   async def _run_async_impl(
       self, ctx: InvocationContext
   ) -> AsyncGenerator[Event, None]:
-    _set_branch_for_current_agent(self, ctx)
-    agent_runs = [agent.run_async(ctx) for agent in self.sub_agents]
+    agent_runs = [
+        sub_agent.run_async(
+            _create_branch_ctx_for_sub_agent(self, sub_agent, ctx)
+        )
+        for sub_agent in self.sub_agents
+    ]
     async for event in _merge_agent_run(agent_runs):
       yield event
 
diff --git a/tests/unittests/agents/test_base_agent.py b/tests/unittests/agents/test_base_agent.py
index 624bd28..25aca8f 100644
--- a/tests/unittests/agents/test_base_agent.py
+++ b/tests/unittests/agents/test_base_agent.py
@@ -159,7 +159,7 @@ async def test_run_async_with_branch(request: pytest.FixtureRequest):
   assert len(events) == 1
   assert events[0].author == agent.name
   assert events[0].content.parts[0].text == 'Hello, world!'
-  assert events[0].branch.endswith(agent.name)
+  assert events[0].branch == 'parent_branch'
 
 
 @pytest.mark.asyncio
@@ -625,7 +625,7 @@ async def test_run_live_with_branch(request: pytest.FixtureRequest):
   assert len(events) == 1
   assert events[0].author == agent.name
   assert events[0].content.parts[0].text == 'Hello, live!'
-  assert events[0].branch.endswith(agent.name)
+  assert events[0].branch == 'parent_branch'
 
 
 @pytest.mark.asyncio
diff --git a/tests/unittests/agents/test_parallel_agent.py b/tests/unittests/agents/test_parallel_agent.py
index 8b29987..ccfdae3 100644
--- a/tests/unittests/agents/test_parallel_agent.py
+++ b/tests/unittests/agents/test_parallel_agent.py
@@ -20,6 +20,7 @@ from typing import AsyncGenerator
 from google.adk.agents.base_agent import BaseAgent
 from google.adk.agents.invocation_context import InvocationContext
 from google.adk.agents.parallel_agent import ParallelAgent
+from google.adk.agents.sequential_agent import SequentialAgent
 from google.adk.events import Event
 from google.adk.sessions.in_memory_session_service import InMemorySessionService
 from google.genai import types
@@ -86,7 +87,51 @@ async def test_run_async(request: pytest.FixtureRequest):
   # and agent1 has a delay.
   assert events[0].author == agent2.name
   assert events[1].author == agent1.name
-  assert events[0].branch.endswith(agent2.name)
-  assert events[1].branch.endswith(agent1.name)
+  assert events[0].branch.endswith(f'{parallel_agent.name}.{agent2.name}')
+  assert events[1].branch.endswith(f'{parallel_agent.name}.{agent1.name}')
   assert events[0].content.parts[0].text == f'Hello, async {agent2.name}!'
   assert events[1].content.parts[0].text == f'Hello, async {agent1.name}!'
+
+
+@pytest.mark.asyncio
+async def test_run_async_branches(request: pytest.FixtureRequest):
+  agent1 = _TestingAgent(
+      name=f'{request.function.__name__}_test_agent_1',
+      delay=0.5,
+  )
+  agent2 = _TestingAgent(name=f'{request.function.__name__}_test_agent_2')
+  agent3 = _TestingAgent(name=f'{request.function.__name__}_test_agent_3')
+  sequential_agent = SequentialAgent(
+      name=f'{request.function.__name__}_test_sequential_agent',
+      sub_agents=[agent2, agent3],
+  )
+  parallel_agent = ParallelAgent(
+      name=f'{request.function.__name__}_test_parallel_agent',
+      sub_agents=[
+          sequential_agent,
+          agent1,
+      ],
+  )
+  parent_ctx = await _create_parent_invocation_context(
+      request.function.__name__, parallel_agent
+  )
+  events = [e async for e in parallel_agent.run_async(parent_ctx)]
+
+  assert len(events) == 3
+  assert (
+      events[0].author == agent2.name
+      and events[0].branch == f'{parallel_agent.name}.{sequential_agent.name}'
+  )
+  assert (
+      events[1].author == agent3.name
+      and events[0].branch == f'{parallel_agent.name}.{sequential_agent.name}'
+  )
+  # Descendants of the same sub-agent should have the same branch.
+  assert events[0].branch == events[1].branch
+  assert (
+      events[2].author == agent1.name
+      and events[2].branch == f'{parallel_agent.name}.{agent1.name}'
+  )
+  # Sub-agents should have different branches.
+  assert events[2].branch != events[1].branch
+  assert events[2].branch != events[0].branch