Since Uzawa's comprehensive analysis of multi-input C.E.S. functions [12], theorists have believed that with C.E.S. technologies inputs can never be complements in the economically important sense that an increase in the price of input i causes the equilibrium employment of any other input j to decrease.' This is correct for non-nested C.E.S. functions; however, it is incorrect if production takes place with nested C.E.S. functions. The main goal of this paper is to show precisely how nested C.E.S. technologies can cause inputs to be complements in the sense noted above. The key to such complementarity is interprocess substitution, as we studied in an earlier paper [2]. Nested technologies of the sort we have in mind are quite common. They occur whenever an intermediate good produced with one sort of capital equipment and labor is processed further by a different type of capital and labor. This entails virtually all of manufacturing. For instance, crude oil is an intermediate good extracted with drill pipe, pump jacks, and separating tanks. It is then refined into its components using high temperature fractionating columns. The two subprocesses, and forms of capital, are distinct: fractionating columns cannot do the work of extraction, nor can drill pipe, pump jacks, and separating tanks help in refining. Although direct, technical substitution of capital in one subprocess for capital in the other is not possible, some substitution between subprocesses is quite feasible. As the price of crude oil increases, it is refined more efficiently. In this specific sense one subprocess, refining, increases relative to the other, intermediate crude oil; hence there is indirect economic substitution of refining inputs for extraction inputs. Nested production functions are clearly the rule for semi-finished goods traded internationally. A country that imports a semi-finished good produced with foreign resources, then refines it further domestically, combines a nesting of foreign and domestic production functions. This is a matter of first-order significance in the U.S. automobile industry; a larger share of the final value of imported cars sold domestically now originates abroad rather than at home. Content protection, the notion that a certain percentage of either a specific physical input or the final cost of a