diff --git a/synthtool/gcp/common.py b/synthtool/gcp/common.py
index 9083c7bb7..042a45538 100644
--- a/synthtool/gcp/common.py
+++ b/synthtool/gcp/common.py
@@ -384,8 +384,13 @@ def detect_versions(
         except FileNotFoundError:
             pass
 
-    # Sort the sub directories alphabetically.
-    sub_dirs = sorted([p.name for p in Path(path).rglob("*v[1-9]*") if p.is_dir()])
+    # Detect versions up to a depth of 4 in directory hierarchy
+    for level in ("*v[1-9]*", "*/*v[1-9]*", "*/*/*v[1-9]*", "*/*/*/*v[1-9]*"):
+        # Sort the sub directories alphabetically.
+        sub_dirs = sorted([p.name for p in Path(path).glob(level) if p.is_dir()])
+        # Don't proceed to the next level if we've detected versions in this depth level
+        if sub_dirs:
+            break
 
     if sub_dirs:
         # if `default_version` is not specified, return the sorted directories.
diff --git a/synthtool/languages/python.py b/synthtool/languages/python.py
index 4dbb3f898..9eb627379 100644
--- a/synthtool/languages/python.py
+++ b/synthtool/languages/python.py
@@ -184,7 +184,7 @@ def owlbot_main() -> None:
 
         templated_files = CommonTemplates().py_library(
             microgenerator=True,
-            versions=detect_versions(path="./google/cloud", default_first=True),
+            versions=detect_versions(path="./google", default_first=True),
         )
         s.move(
             [templated_files], excludes=[".coveragerc"]
diff --git a/tests/test_common.py b/tests/test_common.py
index 0677e0d35..975221b02 100644
--- a/tests/test_common.py
+++ b/tests/test_common.py
@@ -237,10 +237,12 @@ def test_detect_versions_with_default_version_from_metadata():
 
 def test_detect_versions_nested_directory():
     temp_dir = Path(tempfile.mkdtemp())
-    src_dir = temp_dir / "src" / "src2" / "src3"
+    src_dir = temp_dir / "src" / "src2" / "src3" / "src4"
     vs = ("v1", "v2", "v3")
     for v in vs:
         os.makedirs(src_dir / v)
+        # this folder should be ignored
+        os.makedirs(src_dir / v / "some_other_service_v1_beta")
 
     with util.chdir(temp_dir):
         versions = detect_versions(default_version="v1")