Abstract. This paper presents an extension of disjunctive datalog (Datalog∨ ) by nested rules. Nested rules are (disjunctive) rules where elements of the head may be also rules. Nested rules increase the knowledge representation power of Datalog∨ both from a theoretical and from a practical viewpoint. A number of examples show that nested rules allow to naturally model several real world situations that cannot be represented in Datalog∨ . An in depth analysis of complexity and expressive power of the language shows that nested rules do increase the expressiveness of Datalog∨ without implying any increase in its computational complexity.