diff --git a/mypyc/irbuild/builder.py b/mypyc/irbuild/builder.py
index 8c68f91bf633..0757415f6753 100644
--- a/mypyc/irbuild/builder.py
+++ b/mypyc/irbuild/builder.py
@@ -502,6 +502,11 @@ def non_function_scope(self) -> bool:
         # Currently the stack always has at least two items: dummy and top-level.
         return len(self.fn_infos) <= 2
 
+    def top_level_fn_info(self) -> FuncInfo | None:
+        if self.non_function_scope():
+            return None
+        return self.fn_infos[2]
+
     def init_final_static(
         self,
         lvalue: Lvalue,
diff --git a/mypyc/irbuild/context.py b/mypyc/irbuild/context.py
index 676afb507504..a740f0b821d9 100644
--- a/mypyc/irbuild/context.py
+++ b/mypyc/irbuild/context.py
@@ -22,6 +22,7 @@ def __init__(
         contains_nested: bool = False,
         is_decorated: bool = False,
         in_non_ext: bool = False,
+        add_nested_funcs_to_env: bool = False,
     ) -> None:
         self.fitem = fitem
         self.name = name
@@ -47,6 +48,7 @@ def __init__(
         self.contains_nested = contains_nested
         self.is_decorated = is_decorated
         self.in_non_ext = in_non_ext
+        self.add_nested_funcs_to_env = add_nested_funcs_to_env
 
         # TODO: add field for ret_type: RType = none_rprimitive
 
diff --git a/mypyc/irbuild/env_class.py b/mypyc/irbuild/env_class.py
index ded8072deb63..aa223fe20176 100644
--- a/mypyc/irbuild/env_class.py
+++ b/mypyc/irbuild/env_class.py
@@ -107,7 +107,7 @@ def load_env_registers(builder: IRBuilder) -> None:
         load_outer_envs(builder, fn_info.callable_class)
         # If this is a FuncDef, then make sure to load the FuncDef into its own environment
         # class so that the function can be called recursively.
-        if isinstance(fitem, FuncDef):
+        if isinstance(fitem, FuncDef) and fn_info.add_nested_funcs_to_env:
             setup_func_for_recursive_call(builder, fitem, fn_info.callable_class)
 
 
diff --git a/mypyc/irbuild/function.py b/mypyc/irbuild/function.py
index 822350ea829b..ebf7fa9a54de 100644
--- a/mypyc/irbuild/function.py
+++ b/mypyc/irbuild/function.py
@@ -19,6 +19,7 @@
     ArgKind,
     ClassDef,
     Decorator,
+    FuncBase,
     FuncDef,
     FuncItem,
     LambdaExpr,
@@ -222,6 +223,7 @@ def c() -> None:
     is_decorated = fitem in builder.fdefs_to_decorators
     is_singledispatch = fitem in builder.singledispatch_impls
     in_non_ext = False
+    add_nested_funcs_to_env = has_nested_func_self_reference(builder, fitem)
     class_name = None
     if cdef:
         ir = builder.mapper.type_to_ir[cdef.info]
@@ -234,14 +236,15 @@ def c() -> None:
         func_name = name
     builder.enter(
         FuncInfo(
-            fitem,
-            func_name,
-            class_name,
-            gen_func_ns(builder),
-            is_nested,
-            contains_nested,
-            is_decorated,
-            in_non_ext,
+            fitem=fitem,
+            name=func_name,
+            class_name=class_name,
+            namespace=gen_func_ns(builder),
+            is_nested=is_nested,
+            contains_nested=contains_nested,
+            is_decorated=is_decorated,
+            in_non_ext=in_non_ext,
+            add_nested_funcs_to_env=add_nested_funcs_to_env,
         )
     )
 
@@ -267,7 +270,13 @@ def c() -> None:
         builder.enter(fn_info)
         setup_env_for_generator_class(builder)
         load_outer_envs(builder, builder.fn_info.generator_class)
-        if builder.fn_info.is_nested and isinstance(fitem, FuncDef):
+        top_level = builder.top_level_fn_info()
+        if (
+            builder.fn_info.is_nested
+            and isinstance(fitem, FuncDef)
+            and top_level
+            and top_level.add_nested_funcs_to_env
+        ):
             setup_func_for_recursive_call(builder, fitem, builder.fn_info.generator_class)
         create_switch_for_generator_class(builder)
         add_raise_exception_blocks_to_generator_class(builder, fitem.line)
@@ -344,6 +353,20 @@ def c() -> None:
     return func_ir, func_reg
 
 
+def has_nested_func_self_reference(builder: IRBuilder, fitem: FuncItem) -> bool:
+    """Does a nested function contain a self-reference in its body?
+
+    If a nested function only has references in the surrounding function,
+    we don't need to add it to the environment.
+    """
+    if any(isinstance(sym, FuncBase) for sym in builder.free_variables.get(fitem, set())):
+        return True
+    return any(
+        has_nested_func_self_reference(builder, nested)
+        for nested in builder.encapsulating_funcs.get(fitem, [])
+    )
+
+
 def gen_func_ir(
     builder: IRBuilder,
     args: list[Register],
@@ -768,7 +791,7 @@ def get_func_target(builder: IRBuilder, fdef: FuncDef) -> AssignmentTarget:
         # Get the target associated with the previously defined FuncDef.
         return builder.lookup(fdef.original_def)
 
-    if builder.fn_info.is_generator or builder.fn_info.contains_nested:
+    if builder.fn_info.is_generator or builder.fn_info.add_nested_funcs_to_env:
         return builder.lookup(fdef)
 
     return builder.add_local_reg(fdef, object_rprimitive)
diff --git a/mypyc/test-data/irbuild-basic.test b/mypyc/test-data/irbuild-basic.test
index 33fc8cfaa83b..bf608abb87ad 100644
--- a/mypyc/test-data/irbuild-basic.test
+++ b/mypyc/test-data/irbuild-basic.test
@@ -2694,47 +2694,43 @@ L2:
 def g_a_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.g_a_obj
     r0 :: __main__.a_env
-    r1, g :: object
-    r2 :: str
-    r3 :: object
-    r4 :: str
-    r5, r6, r7, r8 :: object
-    r9 :: str
-    r10 :: object
-    r11 :: str
-    r12, r13 :: object
+    r1 :: str
+    r2 :: object
+    r3 :: str
+    r4, r5, r6, r7 :: object
+    r8 :: str
+    r9 :: object
+    r10 :: str
+    r11, r12 :: object
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.g
-    g = r1
-    r2 = 'Entering'
-    r3 = builtins :: module
-    r4 = 'print'
-    r5 = CPyObject_GetAttr(r3, r4)
-    r6 = PyObject_CallFunctionObjArgs(r5, r2, 0)
-    r7 = r0.f
-    r8 = PyObject_CallFunctionObjArgs(r7, 0)
-    r9 = 'Exited'
-    r10 = builtins :: module
-    r11 = 'print'
-    r12 = CPyObject_GetAttr(r10, r11)
-    r13 = PyObject_CallFunctionObjArgs(r12, r9, 0)
+    r1 = 'Entering'
+    r2 = builtins :: module
+    r3 = 'print'
+    r4 = CPyObject_GetAttr(r2, r3)
+    r5 = PyObject_CallFunctionObjArgs(r4, r1, 0)
+    r6 = r0.f
+    r7 = PyObject_CallFunctionObjArgs(r6, 0)
+    r8 = 'Exited'
+    r9 = builtins :: module
+    r10 = 'print'
+    r11 = CPyObject_GetAttr(r9, r10)
+    r12 = PyObject_CallFunctionObjArgs(r11, r8, 0)
     return 1
 def a(f):
     f :: object
     r0 :: __main__.a_env
     r1 :: bool
     r2 :: __main__.g_a_obj
-    r3, r4 :: bool
-    r5 :: object
+    r3 :: bool
+    g :: object
 L0:
     r0 = a_env()
     r0.f = f; r1 = is_error
     r2 = g_a_obj()
     r2.__mypyc_env__ = r0; r3 = is_error
-    r0.g = r2; r4 = is_error
-    r5 = r0.g
-    return r5
+    g = r2
+    return g
 def g_b_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -2751,47 +2747,43 @@ L2:
 def g_b_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.g_b_obj
     r0 :: __main__.b_env
-    r1, g :: object
-    r2 :: str
-    r3 :: object
-    r4 :: str
-    r5, r6, r7, r8 :: object
-    r9 :: str
-    r10 :: object
-    r11 :: str
-    r12, r13 :: object
+    r1 :: str
+    r2 :: object
+    r3 :: str
+    r4, r5, r6, r7 :: object
+    r8 :: str
+    r9 :: object
+    r10 :: str
+    r11, r12 :: object
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.g
-    g = r1
-    r2 = '---'
-    r3 = builtins :: module
-    r4 = 'print'
-    r5 = CPyObject_GetAttr(r3, r4)
-    r6 = PyObject_CallFunctionObjArgs(r5, r2, 0)
-    r7 = r0.f
-    r8 = PyObject_CallFunctionObjArgs(r7, 0)
-    r9 = '---'
-    r10 = builtins :: module
-    r11 = 'print'
-    r12 = CPyObject_GetAttr(r10, r11)
-    r13 = PyObject_CallFunctionObjArgs(r12, r9, 0)
+    r1 = '---'
+    r2 = builtins :: module
+    r3 = 'print'
+    r4 = CPyObject_GetAttr(r2, r3)
+    r5 = PyObject_CallFunctionObjArgs(r4, r1, 0)
+    r6 = r0.f
+    r7 = PyObject_CallFunctionObjArgs(r6, 0)
+    r8 = '---'
+    r9 = builtins :: module
+    r10 = 'print'
+    r11 = CPyObject_GetAttr(r9, r10)
+    r12 = PyObject_CallFunctionObjArgs(r11, r8, 0)
     return 1
 def b(f):
     f :: object
     r0 :: __main__.b_env
     r1 :: bool
     r2 :: __main__.g_b_obj
-    r3, r4 :: bool
-    r5 :: object
+    r3 :: bool
+    g :: object
 L0:
     r0 = b_env()
     r0.f = f; r1 = is_error
     r2 = g_b_obj()
     r2.__mypyc_env__ = r0; r3 = is_error
-    r0.g = r2; r4 = is_error
-    r5 = r0.g
-    return r5
+    g = r2
+    return g
 def d_c_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -2808,20 +2800,17 @@ L2:
 def d_c_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.d_c_obj
     r0 :: __main__.c_env
-    r1, d :: object
-    r2 :: str
-    r3 :: object
-    r4 :: str
-    r5, r6 :: object
+    r1 :: str
+    r2 :: object
+    r3 :: str
+    r4, r5 :: object
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.d
-    d = r1
-    r2 = 'd'
-    r3 = builtins :: module
-    r4 = 'print'
-    r5 = CPyObject_GetAttr(r3, r4)
-    r6 = PyObject_CallFunctionObjArgs(r5, r2, 0)
+    r1 = 'd'
+    r2 = builtins :: module
+    r3 = 'print'
+    r4 = CPyObject_GetAttr(r2, r3)
+    r5 = PyObject_CallFunctionObjArgs(r4, r1, 0)
     return 1
 def c():
     r0 :: __main__.c_env
@@ -2832,16 +2821,15 @@ def c():
     r5, r6 :: object
     r7 :: dict
     r8 :: str
-    r9, r10 :: object
-    r11 :: bool
-    r12 :: dict
-    r13 :: str
-    r14 :: i32
-    r15 :: bit
-    r16 :: str
-    r17 :: object
-    r18 :: str
-    r19, r20, r21, r22 :: object
+    r9, r10, d :: object
+    r11 :: dict
+    r12 :: str
+    r13 :: i32
+    r14 :: bit
+    r15 :: str
+    r16 :: object
+    r17 :: str
+    r18, r19, r20 :: object
 L0:
     r0 = c_env()
     r1 = d_c_obj()
@@ -2854,18 +2842,17 @@ L0:
     r8 = 'a'
     r9 = CPyDict_GetItem(r7, r8)
     r10 = PyObject_CallFunctionObjArgs(r9, r6, 0)
-    r0.d = r10; r11 = is_error
-    r12 = __main__.globals :: static
-    r13 = 'd'
-    r14 = CPyDict_SetItem(r12, r13, r10)
-    r15 = r14 >= 0 :: signed
-    r16 = 'c'
-    r17 = builtins :: module
-    r18 = 'print'
-    r19 = CPyObject_GetAttr(r17, r18)
-    r20 = PyObject_CallFunctionObjArgs(r19, r16, 0)
-    r21 = r0.d
-    r22 = PyObject_CallFunctionObjArgs(r21, 0)
+    d = r10
+    r11 = __main__.globals :: static
+    r12 = 'd'
+    r13 = CPyDict_SetItem(r11, r12, r10)
+    r14 = r13 >= 0 :: signed
+    r15 = 'c'
+    r16 = builtins :: module
+    r17 = 'print'
+    r18 = CPyObject_GetAttr(r16, r17)
+    r19 = PyObject_CallFunctionObjArgs(r18, r15, 0)
+    r20 = PyObject_CallFunctionObjArgs(d, 0)
     return 1
 def __top_level__():
     r0, r1 :: object
@@ -2947,47 +2934,43 @@ L2:
 def g_a_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.g_a_obj
     r0 :: __main__.a_env
-    r1, g :: object
-    r2 :: str
-    r3 :: object
-    r4 :: str
-    r5, r6, r7, r8 :: object
-    r9 :: str
-    r10 :: object
-    r11 :: str
-    r12, r13 :: object
+    r1 :: str
+    r2 :: object
+    r3 :: str
+    r4, r5, r6, r7 :: object
+    r8 :: str
+    r9 :: object
+    r10 :: str
+    r11, r12 :: object
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.g
-    g = r1
-    r2 = 'Entering'
-    r3 = builtins :: module
-    r4 = 'print'
-    r5 = CPyObject_GetAttr(r3, r4)
-    r6 = PyObject_CallFunctionObjArgs(r5, r2, 0)
-    r7 = r0.f
-    r8 = PyObject_CallFunctionObjArgs(r7, 0)
-    r9 = 'Exited'
-    r10 = builtins :: module
-    r11 = 'print'
-    r12 = CPyObject_GetAttr(r10, r11)
-    r13 = PyObject_CallFunctionObjArgs(r12, r9, 0)
+    r1 = 'Entering'
+    r2 = builtins :: module
+    r3 = 'print'
+    r4 = CPyObject_GetAttr(r2, r3)
+    r5 = PyObject_CallFunctionObjArgs(r4, r1, 0)
+    r6 = r0.f
+    r7 = PyObject_CallFunctionObjArgs(r6, 0)
+    r8 = 'Exited'
+    r9 = builtins :: module
+    r10 = 'print'
+    r11 = CPyObject_GetAttr(r9, r10)
+    r12 = PyObject_CallFunctionObjArgs(r11, r8, 0)
     return 1
 def a(f):
     f :: object
     r0 :: __main__.a_env
     r1 :: bool
     r2 :: __main__.g_a_obj
-    r3, r4 :: bool
-    r5 :: object
+    r3 :: bool
+    g :: object
 L0:
     r0 = a_env()
     r0.f = f; r1 = is_error
     r2 = g_a_obj()
     r2.__mypyc_env__ = r0; r3 = is_error
-    r0.g = r2; r4 = is_error
-    r5 = r0.g
-    return r5
+    g = r2
+    return g
 def __top_level__():
     r0, r1 :: object
     r2 :: bit
diff --git a/mypyc/test-data/irbuild-nested.test b/mypyc/test-data/irbuild-nested.test
index adef80263533..b2b884705366 100644
--- a/mypyc/test-data/irbuild-nested.test
+++ b/mypyc/test-data/irbuild-nested.test
@@ -50,25 +50,22 @@ L2:
 def inner_a_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_a_obj
     r0 :: __main__.a_env
-    r1, inner, r2 :: object
+    r1 :: object
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = box(None, 1)
-    return r2
+    r1 = box(None, 1)
+    return r1
 def a():
     r0 :: __main__.a_env
     r1 :: __main__.inner_a_obj
-    r2, r3 :: bool
-    r4 :: object
+    r2 :: bool
+    inner :: object
 L0:
     r0 = a_env()
     r1 = inner_a_obj()
     r1.__mypyc_env__ = r0; r2 = is_error
-    r0.inner = r1; r3 = is_error
-    r4 = r0.inner
-    return r4
+    inner = r1
+    return inner
 def second_b_first_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -86,15 +83,12 @@ def second_b_first_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.second_b_first_obj
     r0 :: __main__.first_b_env
     r1 :: __main__.b_env
-    r2, second :: object
-    r3 :: str
+    r2 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
     r1 = r0.__mypyc_env__
-    r2 = r0.second
-    second = r2
-    r3 = 'b.first.second: nested function'
-    return r3
+    r2 = 'b.first.second: nested function'
+    return r2
 def first_b_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -111,35 +105,30 @@ L2:
 def first_b_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.first_b_obj
     r0 :: __main__.b_env
-    r1, first :: object
-    r2 :: __main__.first_b_env
-    r3 :: bool
-    r4 :: __main__.second_b_first_obj
-    r5, r6 :: bool
-    r7 :: object
+    r1 :: __main__.first_b_env
+    r2 :: bool
+    r3 :: __main__.second_b_first_obj
+    r4 :: bool
+    second :: object
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.first
-    first = r1
-    r2 = first_b_env()
-    r2.__mypyc_env__ = r0; r3 = is_error
-    r4 = second_b_first_obj()
-    r4.__mypyc_env__ = r2; r5 = is_error
-    r2.second = r4; r6 = is_error
-    r7 = r2.second
-    return r7
+    r1 = first_b_env()
+    r1.__mypyc_env__ = r0; r2 = is_error
+    r3 = second_b_first_obj()
+    r3.__mypyc_env__ = r1; r4 = is_error
+    second = r3
+    return second
 def b():
     r0 :: __main__.b_env
     r1 :: __main__.first_b_obj
-    r2, r3 :: bool
-    r4 :: object
+    r2 :: bool
+    first :: object
 L0:
     r0 = b_env()
     r1 = first_b_obj()
     r1.__mypyc_env__ = r0; r2 = is_error
-    r0.first = r1; r3 = is_error
-    r4 = r0.first
-    return r4
+    first = r1
+    return first
 def inner_c_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -157,28 +146,24 @@ def inner_c_obj.__call__(__mypyc_self__, s):
     __mypyc_self__ :: __main__.inner_c_obj
     s :: str
     r0 :: __main__.c_env
-    r1, inner :: object
-    r2, r3 :: str
+    r1, r2 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = '!'
-    r3 = PyUnicode_Concat(s, r2)
-    return r3
+    r1 = '!'
+    r2 = PyUnicode_Concat(s, r1)
+    return r2
 def c(num):
     num :: float
     r0 :: __main__.c_env
     r1 :: __main__.inner_c_obj
-    r2, r3 :: bool
-    r4 :: object
+    r2 :: bool
+    inner :: object
 L0:
     r0 = c_env()
     r1 = inner_c_obj()
     r1.__mypyc_env__ = r0; r2 = is_error
-    r0.inner = r1; r3 = is_error
-    r4 = r0.inner
-    return r4
+    inner = r1
+    return inner
 def inner_d_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -196,40 +181,36 @@ def inner_d_obj.__call__(__mypyc_self__, s):
     __mypyc_self__ :: __main__.inner_d_obj
     s :: str
     r0 :: __main__.d_env
-    r1, inner :: object
-    r2, r3 :: str
+    r1, r2 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = '?'
-    r3 = PyUnicode_Concat(s, r2)
-    return r3
+    r1 = '?'
+    r2 = PyUnicode_Concat(s, r1)
+    return r2
 def d(num):
     num :: float
     r0 :: __main__.d_env
     r1 :: __main__.inner_d_obj
-    r2, r3 :: bool
-    r4 :: str
-    r5, r6 :: object
-    r7, a, r8 :: str
-    r9, r10 :: object
-    r11, b :: str
+    r2 :: bool
+    inner :: object
+    r3 :: str
+    r4 :: object
+    r5, a, r6 :: str
+    r7 :: object
+    r8, b :: str
 L0:
     r0 = d_env()
     r1 = inner_d_obj()
     r1.__mypyc_env__ = r0; r2 = is_error
-    r0.inner = r1; r3 = is_error
-    r4 = 'one'
-    r5 = r0.inner
-    r6 = PyObject_CallFunctionObjArgs(r5, r4, 0)
-    r7 = cast(str, r6)
-    a = r7
-    r8 = 'two'
-    r9 = r0.inner
-    r10 = PyObject_CallFunctionObjArgs(r9, r8, 0)
-    r11 = cast(str, r10)
-    b = r11
+    inner = r1
+    r3 = 'one'
+    r4 = PyObject_CallFunctionObjArgs(inner, r3, 0)
+    r5 = cast(str, r4)
+    a = r5
+    r6 = 'two'
+    r7 = PyObject_CallFunctionObjArgs(inner, r6, 0)
+    r8 = cast(str, r7)
+    b = r8
     return a
 def inner():
     r0 :: str
@@ -290,32 +271,28 @@ L2:
 def inner_a_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_a_obj
     r0 :: __main__.a_env
-    r1, inner :: object
-    r2 :: int
+    r1 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = r0.num
-    return r2
+    r1 = r0.num
+    return r1
 def a(num):
     num :: int
     r0 :: __main__.a_env
     r1 :: bool
     r2 :: __main__.inner_a_obj
-    r3, r4 :: bool
-    r5, r6 :: object
-    r7 :: int
+    r3 :: bool
+    inner, r4 :: object
+    r5 :: int
 L0:
     r0 = a_env()
     r0.num = num; r1 = is_error
     r2 = inner_a_obj()
     r2.__mypyc_env__ = r0; r3 = is_error
-    r0.inner = r2; r4 = is_error
-    r5 = r0.inner
-    r6 = PyObject_CallFunctionObjArgs(r5, 0)
-    r7 = unbox(int, r6)
-    return r7
+    inner = r2
+    r4 = PyObject_CallFunctionObjArgs(inner, 0)
+    r5 = unbox(int, r4)
+    return r5
 def inner_b_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -332,36 +309,32 @@ L2:
 def inner_b_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_b_obj
     r0 :: __main__.b_env
-    r1, inner :: object
-    r2 :: bool
-    foo, r3 :: int
+    r1 :: bool
+    foo, r2 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r0.num = 8; r2 = is_error
+    r0.num = 8; r1 = is_error
     foo = 12
-    r3 = r0.num
-    return r3
+    r2 = r0.num
+    return r2
 def b():
     r0 :: __main__.b_env
     r1 :: bool
     r2 :: __main__.inner_b_obj
-    r3, r4 :: bool
-    r5, r6 :: object
-    r7, r8, r9 :: int
+    r3 :: bool
+    inner, r4 :: object
+    r5, r6, r7 :: int
 L0:
     r0 = b_env()
     r0.num = 6; r1 = is_error
     r2 = inner_b_obj()
     r2.__mypyc_env__ = r0; r3 = is_error
-    r0.inner = r2; r4 = is_error
-    r5 = r0.inner
-    r6 = PyObject_CallFunctionObjArgs(r5, 0)
-    r7 = unbox(int, r6)
-    r8 = r0.num
-    r9 = CPyTagged_Add(r7, r8)
-    return r9
+    inner = r2
+    r4 = PyObject_CallFunctionObjArgs(inner, 0)
+    r5 = unbox(int, r4)
+    r6 = r0.num
+    r7 = CPyTagged_Add(r5, r6)
+    return r7
 def inner_c_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -378,14 +351,11 @@ L2:
 def inner_c_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_c_obj
     r0 :: __main__.c_env
-    r1, inner :: object
-    r2 :: str
+    r1 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = 'f.inner: first definition'
-    return r2
+    r1 = 'f.inner: first definition'
+    return r1
 def inner_c_obj_0.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -402,40 +372,37 @@ L2:
 def inner_c_obj_0.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_c_obj_0
     r0 :: __main__.c_env
-    r1, inner :: object
-    r2 :: str
+    r1 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = 'f.inner: second definition'
-    return r2
+    r1 = 'f.inner: second definition'
+    return r1
 def c(flag):
     flag :: bool
     r0 :: __main__.c_env
     r1 :: __main__.inner_c_obj
-    r2, r3 :: bool
-    r4 :: __main__.inner_c_obj_0
-    r5, r6 :: bool
-    r7, r8 :: object
-    r9 :: str
+    r2 :: bool
+    inner :: object
+    r3 :: __main__.inner_c_obj_0
+    r4 :: bool
+    r5 :: object
+    r6 :: str
 L0:
     r0 = c_env()
     if flag goto L1 else goto L2 :: bool
 L1:
     r1 = inner_c_obj()
     r1.__mypyc_env__ = r0; r2 = is_error
-    r0.inner = r1; r3 = is_error
+    inner = r1
     goto L3
 L2:
-    r4 = inner_c_obj_0()
-    r4.__mypyc_env__ = r0; r5 = is_error
-    r0.inner = r4; r6 = is_error
+    r3 = inner_c_obj_0()
+    r3.__mypyc_env__ = r0; r4 = is_error
+    inner = r3
 L3:
-    r7 = r0.inner
-    r8 = PyObject_CallFunctionObjArgs(r7, 0)
-    r9 = cast(str, r8)
-    return r9
+    r5 = PyObject_CallFunctionObjArgs(inner, 0)
+    r6 = cast(str, r5)
+    return r6
 
 [case testSpecialNested]
 def a() -> int:
@@ -465,15 +432,12 @@ def c_a_b_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.c_a_b_obj
     r0 :: __main__.b_a_env
     r1 :: __main__.a_env
-    r2, c :: object
-    r3 :: int
+    r2 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
     r1 = r0.__mypyc_env__
-    r2 = r0.c
-    c = r2
-    r3 = r1.x
-    return r3
+    r2 = r1.x
+    return r2
 def b_a_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -490,48 +454,43 @@ L2:
 def b_a_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.b_a_obj
     r0 :: __main__.a_env
-    r1, b :: object
-    r2 :: __main__.b_a_env
-    r3 :: bool
-    r4, r5 :: int
-    r6 :: bool
-    r7 :: __main__.c_a_b_obj
-    r8, r9 :: bool
-    r10, r11 :: object
-    r12 :: int
+    r1 :: __main__.b_a_env
+    r2 :: bool
+    r3, r4 :: int
+    r5 :: bool
+    r6 :: __main__.c_a_b_obj
+    r7 :: bool
+    c, r8 :: object
+    r9 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.b
-    b = r1
-    r2 = b_a_env()
-    r2.__mypyc_env__ = r0; r3 = is_error
-    r4 = r0.x
-    r5 = CPyTagged_Add(r4, 2)
-    r0.x = r5; r6 = is_error
-    r7 = c_a_b_obj()
-    r7.__mypyc_env__ = r2; r8 = is_error
-    r2.c = r7; r9 = is_error
-    r10 = r2.c
-    r11 = PyObject_CallFunctionObjArgs(r10, 0)
-    r12 = unbox(int, r11)
-    return r12
+    r1 = b_a_env()
+    r1.__mypyc_env__ = r0; r2 = is_error
+    r3 = r0.x
+    r4 = CPyTagged_Add(r3, 2)
+    r0.x = r4; r5 = is_error
+    r6 = c_a_b_obj()
+    r6.__mypyc_env__ = r1; r7 = is_error
+    c = r6
+    r8 = PyObject_CallFunctionObjArgs(c, 0)
+    r9 = unbox(int, r8)
+    return r9
 def a():
     r0 :: __main__.a_env
     r1 :: bool
     r2 :: __main__.b_a_obj
-    r3, r4 :: bool
-    r5, r6 :: object
-    r7 :: int
+    r3 :: bool
+    b, r4 :: object
+    r5 :: int
 L0:
     r0 = a_env()
     r0.x = 2; r1 = is_error
     r2 = b_a_obj()
     r2.__mypyc_env__ = r0; r3 = is_error
-    r0.b = r2; r4 = is_error
-    r5 = r0.b
-    r6 = PyObject_CallFunctionObjArgs(r5, 0)
-    r7 = unbox(int, r6)
-    return r7
+    b = r2
+    r4 = PyObject_CallFunctionObjArgs(b, 0)
+    r5 = unbox(int, r4)
+    return r5
 
 [case testNestedFunctionInsideStatements]
 def f(flag: bool) -> str:
@@ -559,14 +518,11 @@ L2:
 def inner_f_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_f_obj
     r0 :: __main__.f_env
-    r1, inner :: object
-    r2 :: str
+    r1 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = 'f.inner: first definition'
-    return r2
+    r1 = 'f.inner: first definition'
+    return r1
 def inner_f_obj_0.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -583,40 +539,37 @@ L2:
 def inner_f_obj_0.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.inner_f_obj_0
     r0 :: __main__.f_env
-    r1, inner :: object
-    r2 :: str
+    r1 :: str
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.inner
-    inner = r1
-    r2 = 'f.inner: second definition'
-    return r2
+    r1 = 'f.inner: second definition'
+    return r1
 def f(flag):
     flag :: bool
     r0 :: __main__.f_env
     r1 :: __main__.inner_f_obj
-    r2, r3 :: bool
-    r4 :: __main__.inner_f_obj_0
-    r5, r6 :: bool
-    r7, r8 :: object
-    r9 :: str
+    r2 :: bool
+    inner :: object
+    r3 :: __main__.inner_f_obj_0
+    r4 :: bool
+    r5 :: object
+    r6 :: str
 L0:
     r0 = f_env()
     if flag goto L1 else goto L2 :: bool
 L1:
     r1 = inner_f_obj()
     r1.__mypyc_env__ = r0; r2 = is_error
-    r0.inner = r1; r3 = is_error
+    inner = r1
     goto L3
 L2:
-    r4 = inner_f_obj_0()
-    r4.__mypyc_env__ = r0; r5 = is_error
-    r0.inner = r4; r6 = is_error
+    r3 = inner_f_obj_0()
+    r3.__mypyc_env__ = r0; r4 = is_error
+    inner = r3
 L3:
-    r7 = r0.inner
-    r8 = PyObject_CallFunctionObjArgs(r7, 0)
-    r9 = cast(str, r8)
-    return r9
+    r5 = PyObject_CallFunctionObjArgs(inner, 0)
+    r6 = cast(str, r5)
+    return r6
 
 [case testNestedFunctionsCallEachOther]
 from typing import Callable, List
@@ -652,15 +605,12 @@ L2:
 def foo_f_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.foo_f_obj
     r0 :: __main__.f_env
-    r1, foo :: object
-    r2, r3 :: int
+    r1, r2 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.foo
-    foo = r1
-    r2 = r0.a
-    r3 = CPyTagged_Add(r2, 2)
-    return r3
+    r1 = r0.a
+    r2 = CPyTagged_Add(r1, 2)
+    return r2
 def bar_f_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -677,16 +627,14 @@ L2:
 def bar_f_obj.__call__(__mypyc_self__):
     __mypyc_self__ :: __main__.bar_f_obj
     r0 :: __main__.f_env
-    r1, bar, r2, r3 :: object
-    r4 :: int
+    r1, r2 :: object
+    r3 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.bar
-    bar = r1
-    r2 = r0.foo
-    r3 = PyObject_CallFunctionObjArgs(r2, 0)
-    r4 = unbox(int, r3)
-    return r4
+    r1 = r0.foo
+    r2 = PyObject_CallFunctionObjArgs(r1, 0)
+    r3 = unbox(int, r2)
+    return r3
 def baz_f_obj.__get__(__mypyc_self__, instance, owner):
     __mypyc_self__, instance, owner, r0 :: object
     r1 :: bit
@@ -704,23 +652,21 @@ def baz_f_obj.__call__(__mypyc_self__, n):
     __mypyc_self__ :: __main__.baz_f_obj
     n :: int
     r0 :: __main__.f_env
-    r1, baz :: object
-    r2 :: bit
-    r3 :: int
-    r4, r5 :: object
+    r1 :: bit
+    r2 :: int
+    r3, r4, r5 :: object
     r6, r7 :: int
 L0:
     r0 = __mypyc_self__.__mypyc_env__
-    r1 = r0.baz
-    baz = r1
-    r2 = n == 0
-    if r2 goto L1 else goto L2 :: bool
+    r1 = n == 0
+    if r1 goto L1 else goto L2 :: bool
 L1:
     return 0
 L2:
-    r3 = CPyTagged_Subtract(n, 2)
-    r4 = box(int, r3)
-    r5 = PyObject_CallFunctionObjArgs(baz, r4, 0)
+    r2 = CPyTagged_Subtract(n, 2)
+    r3 = r0.baz
+    r4 = box(int, r2)
+    r5 = PyObject_CallFunctionObjArgs(r3, r4, 0)
     r6 = unbox(int, r5)
     r7 = CPyTagged_Add(n, r6)
     return r7