diff --git a/hathor/indexes/mempool_tips_index.py b/hathor/indexes/mempool_tips_index.py
index 210844a70..fb3b8e5b2 100644
--- a/hathor/indexes/mempool_tips_index.py
+++ b/hathor/indexes/mempool_tips_index.py
@@ -202,6 +202,7 @@ def iter_all(self, tx_storage: 'TransactionStorage') -> Iterator[Transaction]:
         bfs = BFSTimestampWalk(tx_storage, is_dag_verifications=True, is_dag_funds=True, is_left_to_right=False)
         for tx in bfs.run(self.iter(tx_storage), skip_root=False):
             if not isinstance(tx, Transaction):
+                bfs.skip_neighbors(tx)
                 continue
             if tx.get_metadata().first_block is not None:
                 bfs.skip_neighbors(tx)
diff --git a/hathor/manager.py b/hathor/manager.py
index 9b9bdd9d9..e48249c2d 100644
--- a/hathor/manager.py
+++ b/hathor/manager.py
@@ -579,7 +579,7 @@ def generate_parent_txs(self, timestamp: Optional[float]) -> 'ParentTxs':
         best_block = self.tx_storage.get_best_block()
         assert timestamp >= best_block.timestamp
 
-        def get_tx_parents(tx: BaseTransaction) -> list[Transaction]:
+        def get_tx_parents(tx: BaseTransaction, *, with_inputs: bool = False) -> list[Transaction]:
             if tx.is_genesis:
                 genesis_txs = [self._settings.GENESIS_TX1_HASH, self._settings.GENESIS_TX2_HASH]
                 if tx.is_transaction:
@@ -590,34 +590,38 @@ def get_tx_parents(tx: BaseTransaction) -> list[Transaction]:
 
             parents = tx.get_tx_parents()
             assert len(parents) == 2
-            return list(parents)
 
-        unconfirmed_tips = [tx for tx in self.tx_storage.iter_mempool_tips() if tx.timestamp < timestamp]
-        unconfirmed_extras = sorted(
-            (tx for tx in self.tx_storage.iter_mempool() if tx.timestamp < timestamp and tx not in unconfirmed_tips),
-            key=lambda tx: tx.timestamp,
-        )
+            txs = list(parents)
+            if with_inputs:
+                input_tx_ids = set(i.tx_id for i in tx.inputs)
+                inputs = (self.tx_storage.get_transaction(tx_id) for tx_id in input_tx_ids)
+                input_txs = (tx for tx in inputs if isinstance(tx, Transaction))
+                txs.extend(input_txs)
 
-        # mix the blocks tx-parents, with their own tx-parents to avoid carrying one of the genesis tx over
-        best_block_tx_parents = get_tx_parents(best_block)
-        tx1_tx_grandparents = get_tx_parents(best_block_tx_parents[0])
-        tx2_tx_grandparents = get_tx_parents(best_block_tx_parents[1])
-        confirmed_tips = sorted(
-            set(best_block_tx_parents) | set(tx1_tx_grandparents) | set(tx2_tx_grandparents),
-            key=lambda tx: tx.timestamp,
-        )
+            return txs
 
+        unconfirmed_tips = [tx for tx in self.tx_storage.iter_mempool_tips() if tx.timestamp < timestamp]
         match unconfirmed_tips:
             case []:
+                # mix the blocks tx-parents, with their own tx-parents to avoid carrying one of the genesis tx over
+                best_block_tx_parents = get_tx_parents(best_block)
+                tx1_tx_grandparents = get_tx_parents(best_block_tx_parents[0], with_inputs=True)
+                tx2_tx_grandparents = get_tx_parents(best_block_tx_parents[1], with_inputs=True)
+                confirmed_tips = sorted(
+                    set(best_block_tx_parents) | set(tx1_tx_grandparents) | set(tx2_tx_grandparents),
+                    key=lambda tx: tx.timestamp,
+                )
                 self.log.debug('generate_parent_txs: empty mempool, repeat parents')
                 return ParentTxs.from_txs(can_include=confirmed_tips[-2:], must_include=())
             case [tip_tx]:
-                if unconfirmed_extras:
-                    self.log.debug('generate_parent_txs: one tx tip and at least one other mempool tx')
-                    return ParentTxs.from_txs(can_include=unconfirmed_extras[-1:], must_include=(tip_tx,))
-                else:
-                    self.log.debug('generate_parent_txs: one tx in mempool, fill with one repeated parent')
-                    return ParentTxs.from_txs(can_include=confirmed_tips[-1:], must_include=(tip_tx,))
+                best_block_tx_parents = get_tx_parents(best_block)
+                repeated_parents = get_tx_parents(tip_tx, with_inputs=True)
+                confirmed_tips = sorted(
+                    set(best_block_tx_parents) | set(repeated_parents),
+                    key=lambda tx: tx.timestamp,
+                )
+                self.log.debug('generate_parent_txs: one tx in mempool, fill with one repeated parent')
+                return ParentTxs.from_txs(can_include=confirmed_tips[-1:], must_include=(tip_tx,))
             case _:
                 self.log.debug('generate_parent_txs: multiple unconfirmed mempool tips')
                 return ParentTxs.from_txs(can_include=unconfirmed_tips, must_include=())
diff --git a/hathor_tests/tx/test_mempool_iter_all.py b/hathor_tests/tx/test_mempool_iter_all.py
new file mode 100644
index 000000000..85ad15df8
--- /dev/null
+++ b/hathor_tests/tx/test_mempool_iter_all.py
@@ -0,0 +1,61 @@
+# Copyright 2025 Hathor Labs
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#    http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+from unittest.mock import patch
+
+from hathor.simulator.utils import add_new_blocks, gen_new_tx
+from hathor_tests import unittest
+
+
+class MempoolIterAllTraversalTestCase(unittest.TestCase):
+    """Regression helpers for ByteCollectionMempoolTipsIndex.iter_all."""
+
+    def setUp(self) -> None:
+        super().setUp()
+        self.manager = self.create_peer('testnet', unlock_wallet=True)
+
+    def test_iter_mempool_walks_block_chain_via_inputs(self) -> None:
+        # Mine enough blocks so at least one reward is spendable by the wallet.
+        num_blocks = self._settings.REWARD_SPEND_MIN_BLOCKS + 2
+        add_new_blocks(self.manager, num_blocks, advance_clock=1)
+        self.run_to_completion()
+
+        address = self.get_address(0)
+        assert address is not None
+        tx = gen_new_tx(self.manager, address, value=10)
+        self.manager.propagate_tx(tx)
+        self.run_to_completion()
+
+        # Capture which vertices iter_mempool touches while walking dependencies.
+        with patch.object(self.manager.tx_storage, 'get_vertex',
+                          wraps=self.manager.tx_storage.get_vertex) as get_vertex:
+            mempool = list(self.manager.tx_storage.iter_mempool())
+
+        self.assertEqual({tx.hash}, {t.hash for t in mempool})
+
+        tx_storage = self.manager.tx_storage
+        expected_blocks = {
+            txin.tx_id
+            for txin in tx.inputs
+            if tx_storage.get_transaction(txin.tx_id).is_block
+        }
+        visited_blocks = {
+            call.args[0]
+            for call in get_vertex.call_args_list
+            if tx_storage.get_transaction(call.args[0]).is_block
+        }
+
+        # iter_mempool should only touch the blocks whose outputs are being spent in the mempool.
+        self.assertTrue(expected_blocks, 'at least one block reward should be spent')
+        self.assertEqual(expected_blocks, visited_blocks)