diff --git a/crates/engine/src/tests_draw2.rs b/crates/engine/src/tests_draw2.rs
index b5a6aa2d..004c9d1d 100644
--- a/crates/engine/src/tests_draw2.rs
+++ b/crates/engine/src/tests_draw2.rs
@@ -1035,3 +1035,29 @@ fn join_takes_the_paths_and_the_ends_to_join() {
         assert!(s.execute("path.join", &bad).is_err(), "{bad}");
     }
 }
+
+#[test]
+fn pen_with_alt_converts_the_anchors_of_a_path_in_a_selected_group() {
+    // #1273: a selected group (or compound path) shows its paths' anchors, so Alt with the Pen
+    // converts them as it does a selected path's, rather than starting a new path there.
+    let alt = Mods { alt: true, ..Mods::default() };
+    let v = view();
+    for wrap in ["object.group", "object.compoundPath.make"] {
+        let mut s = session();
+        let anchors = json!([{"x": 100, "y": 200}, {"x": 200, "y": 100, "in": [150, 100], "out": [250, 100]}, {"x": 300, "y": 200}]);
+        let id = NodeId(s.execute("path.create", &json!({"anchors": anchors})).unwrap()["id"].as_u64().unwrap());
+        s.execute(wrap, &json!({})).unwrap();
+        assert!(!s.doc().unwrap().selection.objects.contains(&id), "{wrap}: the wrapper is selected, not the path");
+        s.select_tool("pen", v).unwrap();
+        // Alt-click the smooth anchor: a corner, in one step, and no new path.
+        assert_eq!(gesture(&mut s, &[(200.0, 100.0)], alt), 1, "{wrap}");
+        let a = path(&s, id).subpaths[0].anchors[1];
+        assert!(!a.has_in() && !a.has_out(), "{wrap}: a corner: {a:?}");
+        assert_eq!(paths(&s).len(), 1, "{wrap}: no new path");
+        // Alt-drag it: smooth again.
+        assert_eq!(gesture(&mut s, &[(200.0, 100.0), (220.0, 100.0), (240.0, 110.0)], alt), 1, "{wrap}");
+        let a = path(&s, id).subpaths[0].anchors[1];
+        assert_eq!((a.h_in, a.h_out), (Point::new(160.0, 90.0), Point::new(240.0, 110.0)), "{wrap}");
+        assert_eq!(paths(&s).len(), 1, "{wrap}: no new path");
+    }
+}
diff --git a/crates/tools/src/draw2.rs b/crates/tools/src/draw2.rs
index 69117508..77731260 100644
--- a/crates/tools/src/draw2.rs
+++ b/crates/tools/src/draw2.rs
@@ -103,6 +103,29 @@ pub(crate) fn editable_paths<'a>(cx: &'a ToolContext) -> impl Iterator<Item = No
         .filter(|&id| cx.doc.is_editable(id) && cx.doc.node(id).is_some_and(|n| matches!(n.kind, NodeKind::Path { guide: false, .. })))
 }
 
+/// The paths whose anchors show with the Pen: the selected ones, and those inside selected groups
+/// and compound paths (not guides, nor locked or hidden ones). Pen + Alt converts their anchors.
+pub(crate) fn shown_paths(cx: &ToolContext) -> Vec<NodeId> {
+    fn inside(n: &vectorcraft_doc::Node, v: &mut Vec<NodeId>) {
+        match &n.kind {
+            NodeKind::Path { guide: false, .. } => v.push(n.id),
+            // A Shape Builder group's first child is its shaper, not art.
+            NodeKind::Group { children, .. } | NodeKind::Compound { children, .. } => {
+                for c in children.iter().skip(usize::from(n.shaper.is_some())) {
+                    inside(c, v);
+                }
+            }
+            _ => {}
+        }
+    }
+    let mut v = vec![];
+    for n in cx.selection.objects.iter().filter_map(|id| cx.doc.node(*id)) {
+        inside(n, &mut v);
+    }
+    v.retain(|id| cx.doc.is_editable(*id));
+    v
+}
+
 /// Nearest anchor within `tol`: (path, subpath, anchor).
 pub(crate) fn hit_anchor(cx: &ToolContext, p: Point, tol: f64) -> Option<(NodeId, usize, usize)> {
     anchor_in(cx, candidate_paths(cx), p, tol)
diff --git a/crates/tools/src/pen.rs b/crates/tools/src/pen.rs
index 9e0f9e34..add267c3 100644
--- a/crates/tools/src/pen.rs
+++ b/crates/tools/src/pen.rs
@@ -107,12 +107,14 @@ fn last_anchor(cx: &ToolContext, id: NodeId) -> Option<(usize, usize)> {
     Some((si, ai))
 }
 
+/// Alt held over a handle end, an anchor or a segment of a selected path (or of one inside a
+/// selected group or compound path, whose anchors show too): the Anchor Point tool's gesture,
+/// within its tolerance.
 #[derive(Clone, Copy, Debug, PartialEq, Eq)]
 enum Endpoint {
     First,
     Last,
 }
-
 /// Pick the closest eligible endpoint at `p`. The caller supplies the historical
 /// tie choice: closing prefers the first end, resuming prefers the last. A one-anchor path has
 /// no eligible closing end.
@@ -129,15 +131,14 @@ fn pick_endpoint(first: Option<Point>, last: Point, p: Point, tol: f64, tie: End
         (None, None) => None,
     }
 }
-
 /// Alt held over a handle end, an anchor or a segment of a selected path: the Anchor Point tool's
 /// gesture, within its tolerance.
 fn alt_converts(cx: &ToolContext, p: Point, m: Mods) -> bool {
     let point = cx.point_tol();
     m.alt
         && (hit_handle(cx, p, point).is_some()
-            || crate::draw2::anchor_in(cx, editable_paths(cx), p, point).is_some()
-            || crate::draw2::segment_in(cx, editable_paths(cx), p, cx.pick_tol()).is_some())
+            || crate::draw2::anchor_in(cx, crate::draw2::shown_paths(cx), p, point).is_some()
+            || crate::draw2::segment_in(cx, crate::draw2::shown_paths(cx), p, cx.pick_tol()).is_some())
 }
 
 /// Preview the outgoing handle of anchor `ai` of subpath `si` at `h`, the incoming one left alone.