diff --git a/crates/red_knot_project/resources/test/corpus/88_regression_generic_method_with_nested_function.py b/crates/red_knot_project/resources/test/corpus/88_regression_generic_method_with_nested_function.py
new file mode 100644
index 0000000000..055f2c1721
--- /dev/null
+++ b/crates/red_knot_project/resources/test/corpus/88_regression_generic_method_with_nested_function.py
@@ -0,0 +1,9 @@
+# Regression test for an issue that came up while working
+# on https://github.com/astral-sh/ruff/pull/17769
+
+class C:
+    def method[T](self, x: T) -> T:
+        def inner():
+            self.attr = 1
+
+C().attr
diff --git a/crates/red_knot_python_semantic/resources/mdtest/attributes.md b/crates/red_knot_python_semantic/resources/mdtest/attributes.md
index 5077b0eb8f..17079b86b8 100644
--- a/crates/red_knot_python_semantic/resources/mdtest/attributes.md
+++ b/crates/red_knot_python_semantic/resources/mdtest/attributes.md
@@ -1949,6 +1949,27 @@ reveal_type(C.a_type)  # revealed: type
 reveal_type(C.a_none)  # revealed: None
 ```
 
+### Generic methods
+
+We also detect implicit instance attributes on methods that are themselves generic. We have an extra
+test for this because generic functions have an extra type-params scope in between the function body
+scope and the outer scope, so we need to make sure that our implementation can still recognize `f`
+as a method of `C` here:
+
+```toml
+[environment]
+python-version = "3.12"
+```
+
+```py
+class C:
+    def f[T](self, t: T) -> T:
+        self.x: int = 1
+        return t
+
+reveal_type(C().x)  # revealed: int
+```
+
 ## Enum classes
 
 Enums are not supported yet; attribute access on an enum class is inferred as `Todo`.
diff --git a/crates/red_knot_python_semantic/src/semantic_index.rs b/crates/red_knot_python_semantic/src/semantic_index.rs
index 619172faef..11137f3eeb 100644
--- a/crates/red_knot_python_semantic/src/semantic_index.rs
+++ b/crates/red_knot_python_semantic/src/semantic_index.rs
@@ -18,7 +18,8 @@ use crate::semantic_index::builder::SemanticIndexBuilder;
 use crate::semantic_index::definition::{Definition, DefinitionNodeKey, Definitions};
 use crate::semantic_index::expression::Expression;
 use crate::semantic_index::symbol::{
-    FileScopeId, NodeWithScopeKey, NodeWithScopeRef, Scope, ScopeId, ScopedSymbolId, SymbolTable,
+    FileScopeId, NodeWithScopeKey, NodeWithScopeRef, Scope, ScopeId, ScopeKind, ScopedSymbolId,
+    SymbolTable,
 };
 use crate::semantic_index::use_def::{EagerBindingsKey, ScopedEagerBindingsId, UseDefMap};
 use crate::Db;
@@ -109,12 +110,26 @@ pub(crate) fn attribute_assignments<'db, 's>(
     let index = semantic_index(db, file);
     let class_scope_id = class_body_scope.file_scope_id(db);
 
-    ChildrenIter::new(index, class_scope_id).filter_map(|(file_scope_id, maybe_method)| {
-        maybe_method.node().as_function()?;
-        let attribute_table = index.instance_attribute_table(file_scope_id);
+    ChildrenIter::new(index, class_scope_id).filter_map(|(child_scope_id, scope)| {
+        let (function_scope_id, function_scope) =
+            if scope.node().scope_kind() == ScopeKind::Annotation {
+                // This could be a generic method with a type-params scope.
+                // Go one level deeper to find the function scope. The first
+                // descendant is the (potential) function scope.
+                let function_scope_id = scope.descendants().start;
+                (function_scope_id, index.scope(function_scope_id))
+            } else {
+                (child_scope_id, scope)
+            };
+
+        function_scope.node().as_function()?;
+        let attribute_table = index.instance_attribute_table(function_scope_id);
         let symbol = attribute_table.symbol_id_by_name(name)?;
-        let use_def = &index.use_def_maps[file_scope_id];
-        Some((use_def.instance_attribute_bindings(symbol), file_scope_id))
+        let use_def = &index.use_def_maps[function_scope_id];
+        Some((
+            use_def.instance_attribute_bindings(symbol),
+            function_scope_id,
+        ))
     })
 }
 
diff --git a/crates/red_knot_python_semantic/src/semantic_index/builder.rs b/crates/red_knot_python_semantic/src/semantic_index/builder.rs
index 75c7494b43..6426e5cc0f 100644
--- a/crates/red_knot_python_semantic/src/semantic_index/builder.rs
+++ b/crates/red_knot_python_semantic/src/semantic_index/builder.rs
@@ -183,13 +183,26 @@ impl<'db> SemanticIndexBuilder<'db> {
     fn is_method_of_class(&self) -> Option<FileScopeId> {
         let mut scopes_rev = self.scope_stack.iter().rev();
         let current = scopes_rev.next()?;
+
+        if self.scopes[current.file_scope_id].kind() != ScopeKind::Function {
+            return None;
+        }
+
         let parent = scopes_rev.next()?;
 
-        match (
-            self.scopes[current.file_scope_id].kind(),
-            self.scopes[parent.file_scope_id].kind(),
-        ) {
-            (ScopeKind::Function, ScopeKind::Class) => Some(parent.file_scope_id),
+        match self.scopes[parent.file_scope_id].kind() {
+            ScopeKind::Class => Some(parent.file_scope_id),
+            ScopeKind::Annotation => {
+                // If the function is generic, the parent scope is an annotation scope.
+                // In this case, we need to go up one level higher to find the class scope.
+                let grandparent = scopes_rev.next()?;
+
+                if self.scopes[grandparent.file_scope_id].kind() == ScopeKind::Class {
+                    Some(grandparent.file_scope_id)
+                } else {
+                    None
+                }
+            }
             _ => None,
         }
     }