diff --git a/src/c14n-canonicalization.ts b/src/c14n-canonicalization.ts
index dd9d7788..a77bc219 100644
--- a/src/c14n-canonicalization.ts
+++ b/src/c14n-canonicalization.ts
@@ -96,18 +96,36 @@ export class C14nCanonicalization implements CanonicalizationOrTransformationAlg
     const nsListToRender: { prefix: string; namespaceURI: string }[] = [];
     const currNs = node.namespaceURI || "";
 
-    //handle the namespace of the node itself
-    if (node.prefix) {
-      if (prefixesInScope.indexOf(node.prefix) === -1) {
-        nsListToRender.push({
-          prefix: node.prefix,
-          namespaceURI: node.namespaceURI || defaultNsForPrefix[node.prefix],
-        });
-        prefixesInScope.push(node.prefix);
+    if (node.prefix && prefixesInScope.indexOf(node.prefix) === -1) {
+      nsListToRender.push({
+        prefix: node.prefix,
+        namespaceURI: node.namespaceURI || defaultNsForPrefix[node.prefix],
+      });
+      prefixesInScope.push(node.prefix);
+    }
+
+    // The default namespace is independent of a prefixed element's namespaceURI.
+    // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+    let localDefaultNs: string | null = null;
+    if (node.attributes) {
+      for (i = 0; i < node.attributes.length; ++i) {
+        if (node.attributes[i].name === "xmlns") {
+          localDefaultNs = node.attributes[i].value;
+        }
       }
-    } else if (defaultNs !== currNs) {
-      //new default ns
-      newDefaultNs = node.namespaceURI || "";
+    }
+
+    let nodeDefaultNs: string;
+    if (localDefaultNs !== null) {
+      nodeDefaultNs = localDefaultNs;
+    } else if (node.prefix) {
+      nodeDefaultNs = defaultNs;
+    } else {
+      nodeDefaultNs = currNs;
+    }
+
+    if (nodeDefaultNs !== defaultNs) {
+      newDefaultNs = nodeDefaultNs;
       res.push(' xmlns="', newDefaultNs, '"');
     }
 
@@ -152,6 +170,9 @@ export class C14nCanonicalization implements CanonicalizationOrTransformationAlg
 
         if (!alreadyListed) {
           nsListToRender.push(ancestorNamespace);
+          if (!ancestorNamespace.prefix) {
+            newDefaultNs = ancestorNamespace.namespaceURI;
+          }
         }
       }
     }
diff --git a/src/utils.ts b/src/utils.ts
index 466b252e..dc2dbf46 100644
--- a/src/utils.ts
+++ b/src/utils.ts
@@ -221,15 +221,19 @@ function collectAncestorNamespaces(
   return collectAncestorNamespaces(parent, nsArray);
 }
 
-function findNSPrefix(subset) {
+function findSubsetNSPrefixes(subset: Element): Set<string> {
+  const prefixes = new Set<string>();
   const subsetAttributes = subset.attributes;
   for (let k = 0; k < subsetAttributes.length; k++) {
     const nodeName = subsetAttributes[k].nodeName;
-    if (nodeName.search(/^xmlns:?/) !== -1) {
-      return nodeName.replace(/^xmlns:?/, "");
+    if (nodeName === "xmlns" || nodeName.startsWith("xmlns:")) {
+      prefixes.add(nodeName.replace(/^xmlns:?/, ""));
     }
   }
-  return subset.prefix || "";
+  // C14N already renders the element's own namespace; hoisting it would duplicate the declaration.
+  // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+  prefixes.add(subset.prefix || "");
+  return prefixes;
 }
 
 function isElementSubset(docSubset: Node[]): docSubset is Element[] {
@@ -264,28 +268,19 @@ export function findAncestorNs(
     throw new Error("Document subset must be list of elements");
   }
 
-  // Remove duplicate on ancestor namespace
   const ancestorNs = collectAncestorNamespaces(docSubset[0]);
   const ancestorNsWithoutDuplicate: NamespacePrefix[] = [];
-  for (let i = 0; i < ancestorNs.length; i++) {
-    let notOnTheList = true;
-    for (const v in ancestorNsWithoutDuplicate) {
-      if (ancestorNsWithoutDuplicate[v].prefix === ancestorNs[i].prefix) {
-        notOnTheList = false;
-        break;
-      }
-    }
-
-    if (notOnTheList) {
-      ancestorNsWithoutDuplicate.push(ancestorNs[i]);
+  for (const ns of ancestorNs) {
+    const isDuplicate = ancestorNsWithoutDuplicate.some((seen) => seen.prefix === ns.prefix);
+    if (!isDuplicate) {
+      ancestorNsWithoutDuplicate.push(ns);
     }
   }
 
-  // Remove namespaces which are already declared in the subset with the same prefix
   const returningNs: NamespacePrefix[] = [];
-  const subsetNsPrefix = findNSPrefix(docSubset[0]);
+  const subsetNsPrefixes = findSubsetNSPrefixes(docSubset[0]);
   for (const ancestorNs of ancestorNsWithoutDuplicate) {
-    if (ancestorNs.prefix !== subsetNsPrefix) {
+    if (!subsetNsPrefixes.has(ancestorNs.prefix)) {
       returningNs.push(ancestorNs);
     }
   }
diff --git a/test/c14n-non-exclusive-unit-tests.spec.ts b/test/c14n-non-exclusive-unit-tests.spec.ts
index ee7f2ba4..a5d308ba 100644
--- a/test/c14n-non-exclusive-unit-tests.spec.ts
+++ b/test/c14n-non-exclusive-unit-tests.spec.ts
@@ -1,15 +1,22 @@
 import { expect } from "chai";
 
-import { C14nCanonicalization } from "../src/c14n-canonicalization";
+import {
+  C14nCanonicalization,
+  C14nCanonicalizationWithComments,
+} from "../src/c14n-canonicalization";
 import * as xmldom from "@xmldom/xmldom";
 import * as xpath from "xpath";
 import * as utils from "../src/utils";
 import * as isDomNode from "@xmldom/is-dom-node";
 
-const test_C14nCanonicalization = function (xml, xpathArg, expected) {
+const test_C14nCanonicalization = function (
+  xml: string,
+  xpathArg: string,
+  expected: string,
+  can = new C14nCanonicalization(),
+) {
   const doc = new xmldom.DOMParser().parseFromString(xml);
   const node = xpath.select1(xpathArg, doc);
-  const can = new C14nCanonicalization();
 
   isDomNode.assertIsNodeLike(node);
   const result = can
@@ -117,6 +124,37 @@ describe("C14N non-exclusive canonicalization tests", function () {
     test_findAncestorNs(xml, xpath, expected);
   });
 
+  it("findAncestorNs: Should not hoist default namespace when subset also declares a prefixed namespace", function () {
+    // The element's own default namespace must be rendered only once.
+    // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+    const xml = '<root xmlns="urn:default"><child1><child2 xmlns:enc="urn:enc"/></child1></root>';
+    const xpath = "//*[local-name()='child2']";
+    const expected = [];
+
+    test_findAncestorNs(xml, xpath, expected);
+  });
+
+  it("findAncestorNs: Should hoist non-default ancestor namespaces when subset is in default namespace", function () {
+    // Inclusive C14N retains ancestor bindings even when the subset does not visibly use them.
+    // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#DataModel
+    const xml =
+      '<root xmlns="urn:default" xmlns:aaa="urn:aaa"><child1><child2 xmlns:enc="urn:enc"/></child1></root>';
+    const xpath = "//*[local-name()='child2']";
+    const expected = [{ prefix: "aaa", namespaceURI: "urn:aaa" }];
+
+    test_findAncestorNs(xml, xpath, expected);
+  });
+
+  it("findAncestorNs: Should not suppress ancestor namespace for non-namespace attribute starting with 'xmlns'", function () {
+    // Only xmlns and xmlns:* declare namespaces; xmlnsfoo must not hide an inherited binding.
+    // https://www.w3.org/TR/REC-xml-names/#ns-decl
+    const xml = '<root xmlns:foo="urn:foo"><child1><child2 xmlnsfoo="bar"/></child1></root>';
+    const xpath = "//*[local-name()='child2']";
+    const expected = [{ prefix: "foo", namespaceURI: "urn:foo" }];
+
+    test_findAncestorNs(xml, xpath, expected);
+  });
+
   // Tests for c14nCanonicalization
   it("C14n: Correctly picks up root ancestor namespace", function () {
     const xml = "<root xmlns:aaa='bbb'><child1><child2></child2></child1></root>";
@@ -210,4 +248,97 @@ describe("C14N non-exclusive canonicalization tests", function () {
 
     test_C14nCanonicalization(xml, xpath, expected);
   });
+
+  for (const Canonicalization of [C14nCanonicalization, C14nCanonicalizationWithComments]) {
+    describe(`${Canonicalization.name}: subset namespace declarations`, function () {
+      it("does not duplicate the default namespace when the subset declares a prefixed namespace", function () {
+        // Render the inherited default namespace exactly once on the subset root.
+        // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+        test_C14nCanonicalization(
+          '<root xmlns="urn:default"><child1><child2 xmlns:enc="urn:enc"/></child1></root>',
+          "//*[local-name()='child2']",
+          '<child2 xmlns="urn:default" xmlns:enc="urn:enc"></child2>',
+          new Canonicalization(),
+        );
+      });
+
+      it("does not duplicate the default namespace for the reported #538 document", function () {
+        // Literal reproduction from https://github.com/node-saml/xml-crypto/issues/538:
+        // a subset root inheriting a default namespace while declaring a prefixed one,
+        // with a prefixed child that must resolve against the local declaration.
+        // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+        test_C14nCanonicalization(
+          '<Root xmlns="http://example.com/root">' +
+            '<Body Id="B" xmlns:enc="http://www.w3.org/2001/04/xmlenc#">' +
+            "<enc:CipherValue>x</enc:CipherValue></Body></Root>",
+          "//*[local-name()='Body']",
+          '<Body xmlns="http://example.com/root" xmlns:enc="http://www.w3.org/2001/04/xmlenc#" Id="B">' +
+            "<enc:CipherValue>x</enc:CipherValue></Body>",
+          new Canonicalization(),
+        );
+      });
+
+      it("retains unused ancestor prefixes alongside the default and local namespaces", function () {
+        // Inclusive C14N preserves every in-scope namespace, including unused ancestor bindings.
+        // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#DataModel
+        test_C14nCanonicalization(
+          '<root xmlns="urn:default" xmlns:aaa="urn:aaa"><child2 xmlns:enc="urn:enc"/></root>',
+          "//*[local-name()='child2']",
+          '<child2 xmlns="urn:default" xmlns:aaa="urn:aaa" xmlns:enc="urn:enc"></child2>',
+          new Canonicalization(),
+        );
+      });
+
+      for (const declarations of [
+        'xmlns:a="urn:local-a" xmlns:b="urn:local-b"',
+        'xmlns:b="urn:local-b" xmlns:a="urn:local-a"',
+      ]) {
+        it(`uses both local prefix bindings with ${declarations}`, function () {
+          // Local declarations override ancestor bindings regardless of declaration order.
+          // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#DataModel
+          test_C14nCanonicalization(
+            '<root xmlns:a="urn:ancestor-a" xmlns:b="urn:ancestor-b">' +
+              `<child2 ${declarations}><a:item/><b:item/></child2></root>`,
+            "//*[local-name()='child2']",
+            '<child2 xmlns:a="urn:local-a" xmlns:b="urn:local-b"><a:item></a:item><b:item></b:item></child2>',
+            new Canonicalization(),
+          );
+        });
+      }
+
+      it("renders the default namespace on a prefixed apex that redeclares it", function () {
+        // Every namespace in scope at the apex is rendered there, including the default one.
+        // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+        test_C14nCanonicalization(
+          '<root xmlns="urn:default"><p:child2 xmlns:p="urn:p" xmlns="urn:default"/></root>',
+          "//*[local-name()='child2']",
+          '<p:child2 xmlns="urn:default" xmlns:p="urn:p"></p:child2>',
+          new Canonicalization(),
+        );
+      });
+
+      it("omits a descendant default namespace already hoisted onto the subset root", function () {
+        // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+        test_C14nCanonicalization(
+          '<root xmlns="urn:default" xmlns:p="urn:p">' +
+            '<p:target><p:child xmlns="urn:default"/></p:target></root>',
+          "//*[local-name()='target']",
+          '<p:target xmlns="urn:default" xmlns:p="urn:p"><p:child></p:child></p:target>',
+          new Canonicalization(),
+        );
+      });
+
+      it("does not restore a default namespace explicitly cleared on a prefixed root", function () {
+        // An empty default declaration removes the inherited binding; no reset is needed at the apex.
+        // https://www.w3.org/TR/REC-xml-names/#defaulting
+        // https://www.w3.org/TR/2001/REC-xml-c14n-20010315#ProcessingModel
+        test_C14nCanonicalization(
+          '<root xmlns="urn:ancestor"><p:child2 xmlns:p="urn:p" xmlns=""><item/></p:child2></root>',
+          "//*[local-name()='child2']",
+          '<p:child2 xmlns:p="urn:p"><item></item></p:child2>',
+          new Canonicalization(),
+        );
+      });
+    });
+  }
 });
diff --git a/test/canonicalization-unit-tests.spec.ts b/test/canonicalization-unit-tests.spec.ts
index 4bce8a6f..227ae529 100644
--- a/test/canonicalization-unit-tests.spec.ts
+++ b/test/canonicalization-unit-tests.spec.ts
@@ -1,9 +1,12 @@
 import { expect } from "chai";
 
-import { ExclusiveCanonicalization } from "../src/exclusive-canonicalization";
+import {
+  ExclusiveCanonicalization,
+  ExclusiveCanonicalizationWithComments,
+} from "../src/exclusive-canonicalization";
 import * as xmldom from "@xmldom/xmldom";
 import * as xpath from "xpath";
-import { SignedXml } from "../src/index";
+import { findAncestorNs, SignedXml } from "../src/index";
 import * as isDomNode from "@xmldom/is-dom-node";
 
 const compare = function (
@@ -28,6 +31,50 @@ const compare = function (
 };
 
 describe("Canonicalization unit tests", function () {
+  for (const Canonicalization of [
+    ExclusiveCanonicalization,
+    ExclusiveCanonicalizationWithComments,
+  ]) {
+    describe(`${Canonicalization.name}: configured inclusive namespaces`, function () {
+      const xml =
+        '<root xmlns:b="urn:ancestor" xmlns:c="urn:inherited">' +
+        '<target xmlns:a="urn:a" xmlns:b="urn:local" type="b:Kind"/></root>';
+      const selector = "//*[local-name()='target']";
+
+      it("retains local and inherited bindings requested by the caller", function () {
+        // PrefixList includes QName-value bindings without replacing local declarations with ancestors.
+        // https://www.w3.org/TR/xml-exc-c14n/#sec-Specification
+        const doc = new xmldom.DOMParser().parseFromString(xml);
+        const node = xpath.select1(selector, doc);
+        isDomNode.assertIsElementNode(node);
+
+        const result = new Canonicalization().process(node, {
+          ancestorNamespaces: findAncestorNs(doc, selector),
+          inclusiveNamespacesPrefixList: ["b", "c"],
+        });
+
+        expect(result).to.equal(
+          '<target xmlns:b="urn:local" xmlns:c="urn:inherited" type="b:Kind"></target>',
+        );
+      });
+
+      it("omits non-visible bindings when the caller supplies an empty PrefixList", function () {
+        // Prefixes used only in attribute values are not visibly utilized in exclusive C14N.
+        // https://www.w3.org/TR/xml-exc-c14n/#def-visibly-utilizes
+        const doc = new xmldom.DOMParser().parseFromString(xml);
+        const node = xpath.select1(selector, doc);
+        isDomNode.assertIsElementNode(node);
+
+        const result = new Canonicalization().process(node, {
+          ancestorNamespaces: findAncestorNs(doc, selector),
+          inclusiveNamespacesPrefixList: [],
+        });
+
+        expect(result).to.equal('<target type="b:Kind"></target>');
+      });
+    });
+  }
+
   it("Exclusive canonicalization works on xml with no namespaces", function () {
     compare("<root><child>123</child></root>", "//*", "<root><child>123</child></root>");
   });