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Nested Prefabs
It is possible to include Prefab Instances within other Prefabs. These are called Nested Prefabs. This section shows how to create them.
There are two ways to create a Nested Prefab. One is creating a new Prefab within a Prefab and the other one is using an existing Prefab. Both are shown below.

Using a new Prefab

To create a Nested Prefab using a new Prefab, go to the Prefab View of the Prefab in which you wish to include another Prefab. Then select the Objects that will compose the Nested Prefab, right-click and click on Make prefab. Then, save the Prefab and the change will take effect on all of its Instances. Additionally, the newly created Prefab will generate its Prefab Asset and can also be used as any other Prefab.

Using an existing Prefab

To create a Nested Prefab using an existing Prefab, go to the Prefab View of the intended parent Prefab. Then, select the intended child Prefab(s) from the Asset Manager and drag it to either the Viewport or the Scene Outliner. Finally, save the Prefab and the change will take effect on all of its Instances.
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Using a new Prefab
Using an existing Prefab