diff --git a/Sources/TestingMacros/SuiteDeclarationMacro.swift b/Sources/TestingMacros/SuiteDeclarationMacro.swift
index 5658123a0..a79255bc8 100644
--- a/Sources/TestingMacros/SuiteDeclarationMacro.swift
+++ b/Sources/TestingMacros/SuiteDeclarationMacro.swift
@@ -63,7 +63,11 @@ public struct SuiteDeclarationMacro: MemberMacro, PeerMacro, Sendable {
     diagnostics += diagnoseIssuesWithLexicalContext(context.lexicalContext, containing: declaration, attribute: suiteAttribute)
     diagnostics += diagnoseIssuesWithLexicalContext(declaration, containing: declaration, attribute: suiteAttribute)
 
-    // Suites inheriting from XCTestCase are not supported.
+    // Suites inheriting from XCTestCase are not supported. This check is
+    // duplicated in TestDeclarationMacro but is not part of
+    // diagnoseIssuesWithLexicalContext() because it doesn't need to recurse
+    // across the entire lexical context list, just the innermost type
+    // declaration.
     if let declaration = declaration.asProtocol((any DeclGroupSyntax).self),
        declaration.inherits(fromTypeNamed: "XCTestCase", inModuleNamed: "XCTest") {
       diagnostics.append(.xcTestCaseNotSupported(declaration, whenUsing: suiteAttribute))
diff --git a/Sources/TestingMacros/TestDeclarationMacro.swift b/Sources/TestingMacros/TestDeclarationMacro.swift
index 1f9025f08..334cc1dac 100644
--- a/Sources/TestingMacros/TestDeclarationMacro.swift
+++ b/Sources/TestingMacros/TestDeclarationMacro.swift
@@ -59,6 +59,16 @@ public struct TestDeclarationMacro: PeerMacro, Sendable {
     // Check if the lexical context is appropriate for a suite or test.
     diagnostics += diagnoseIssuesWithLexicalContext(context.lexicalContext, containing: declaration, attribute: testAttribute)
 
+    // Suites inheriting from XCTestCase are not supported. We are a bit
+    // conservative here in this check and only check the immediate context.
+    // Presumably, if there's an intermediate lexical context that is *not* a
+    // type declaration, then it must be a function or closure (disallowed
+    // elsewhere) and thus the test function is not a member of any type.
+    if let containingTypeDecl = context.lexicalContext.first?.asProtocol((any DeclGroupSyntax).self),
+       containingTypeDecl.inherits(fromTypeNamed: "XCTestCase", inModuleNamed: "XCTest") {
+      diagnostics.append(.containingNodeUnsupported(containingTypeDecl, whenUsing: testAttribute, on: declaration))
+    }
+
     // Only one @Test attribute is supported.
     let suiteAttributes = function.attributes(named: "Test")
     if suiteAttributes.count > 1 {
diff --git a/Tests/TestingMacrosTests/TestDeclarationMacroTests.swift b/Tests/TestingMacrosTests/TestDeclarationMacroTests.swift
index 6330d3fcf..fffa06664 100644
--- a/Tests/TestingMacrosTests/TestDeclarationMacroTests.swift
+++ b/Tests/TestingMacrosTests/TestDeclarationMacroTests.swift
@@ -82,6 +82,10 @@ struct TestDeclarationMacroTests {
         "Attribute 'Suite' cannot be applied to a subclass of 'XCTestCase'",
       "@Suite final class C: XCTest.XCTestCase {}":
         "Attribute 'Suite' cannot be applied to a subclass of 'XCTestCase'",
+      "final class C: XCTestCase { @Test func f() {} }":
+        "Attribute 'Test' cannot be applied to a function within class 'C'",
+      "final class C: XCTest.XCTestCase { @Test func f() {} }":
+        "Attribute 'Test' cannot be applied to a function within class 'C'",
 
       // Unsupported inheritance
       "@Suite protocol P {}":