diff --git a/compiler/packages/babel-plugin-react-compiler/src/Inference/InferReferenceEffects.ts b/compiler/packages/babel-plugin-react-compiler/src/Inference/InferReferenceEffects.ts
index 3724c8d6f1c..520684c026b 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/Inference/InferReferenceEffects.ts
+++ b/compiler/packages/babel-plugin-react-compiler/src/Inference/InferReferenceEffects.ts
@@ -1103,13 +1103,56 @@ function inferBlock(
         break;
       }
       case "JsxExpression": {
-        valueKind = {
+        if (instrValue.tag.kind === "Identifier") {
+          state.referenceAndRecordEffects(
+            instrValue.tag,
+            Effect.Freeze,
+            ValueReason.JsxCaptured,
+            functionEffects
+          );
+        }
+        if (instrValue.children !== null) {
+          for (const child of instrValue.children) {
+            state.referenceAndRecordEffects(
+              child,
+              Effect.Freeze,
+              ValueReason.JsxCaptured,
+              functionEffects
+            );
+          }
+        }
+        for (const attr of instrValue.props) {
+          if (attr.kind === "JsxSpreadAttribute") {
+            state.referenceAndRecordEffects(
+              attr.argument,
+              Effect.Freeze,
+              ValueReason.JsxCaptured,
+              functionEffects
+            );
+          } else {
+            const propEffects: Array<FunctionEffect> = [];
+            state.referenceAndRecordEffects(
+              attr.place,
+              Effect.Freeze,
+              ValueReason.JsxCaptured,
+              propEffects
+            );
+            functionEffects.push(
+              ...propEffects.filter(
+                (propEffect) => propEffect.kind !== "GlobalMutation"
+              )
+            );
+          }
+        }
+
+        state.initialize(instrValue, {
           kind: ValueKind.Frozen,
           reason: new Set([ValueReason.Other]),
           context: new Set(),
-        };
-        effect = { kind: Effect.Freeze, reason: ValueReason.JsxCaptured };
-        break;
+        });
+        state.define(instr.lvalue, instrValue);
+        instr.lvalue.effect = Effect.ConditionallyMutate;
+        continue;
       }
       case "JsxFragment": {
         valueKind = {
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-modify-global-in-callback-jsx.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-modify-global-in-callback-jsx.expect.md
new file mode 100644
index 00000000000..43ab697f87b
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-modify-global-in-callback-jsx.expect.md
@@ -0,0 +1,86 @@
+
+## Input
+
+```javascript
+import { useMemo } from "react";
+
+const someGlobal = { value: 0 };
+
+function Component({ value }) {
+  const onClick = () => {
+    someGlobal.value = value;
+  };
+  return useMemo(() => {
+    return <div onClick={onClick}>{someGlobal.value}</div>;
+  }, []);
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ value: 0 }],
+  sequentialRenders: [
+    { value: 1 },
+    { value: 1 },
+    { value: 42 },
+    { value: 42 },
+    { value: 0 },
+  ],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime";
+import { useMemo } from "react";
+
+const someGlobal = { value: 0 };
+
+function Component(t0) {
+  const $ = _c(4);
+  const { value } = t0;
+  let t1;
+  if ($[0] !== value) {
+    t1 = () => {
+      someGlobal.value = value;
+    };
+    $[0] = value;
+    $[1] = t1;
+  } else {
+    t1 = $[1];
+  }
+  const onClick = t1;
+  let t2;
+  let t3;
+  if ($[2] !== onClick) {
+    t3 = <div onClick={onClick}>{someGlobal.value}</div>;
+    $[2] = onClick;
+    $[3] = t3;
+  } else {
+    t3 = $[3];
+  }
+  t2 = t3;
+  return t2;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ value: 0 }],
+  sequentialRenders: [
+    { value: 1 },
+    { value: 1 },
+    { value: 42 },
+    { value: 42 },
+    { value: 0 },
+  ],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>0</div>
+<div>0</div>
+<div>0</div>
+<div>0</div>
+<div>0</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-modify-global-in-callback-jsx.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-modify-global-in-callback-jsx.js
new file mode 100644
index 00000000000..7404b4b6c01
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-modify-global-in-callback-jsx.js
@@ -0,0 +1,24 @@
+import { useMemo } from "react";
+
+const someGlobal = { value: 0 };
+
+function Component({ value }) {
+  const onClick = () => {
+    someGlobal.value = value;
+  };
+  return useMemo(() => {
+    return <div onClick={onClick}>{someGlobal.value}</div>;
+  }, []);
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ value: 0 }],
+  sequentialRenders: [
+    { value: 1 },
+    { value: 1 },
+    { value: 42 },
+    { value: 42 },
+    { value: 0 },
+  ],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-reassignment-to-global-function-jsx-prop.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-reassignment-to-global-function-jsx-prop.expect.md
new file mode 100644
index 00000000000..eaa2834a497
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-reassignment-to-global-function-jsx-prop.expect.md
@@ -0,0 +1,53 @@
+
+## Input
+
+```javascript
+function Component() {
+  const onClick = () => {
+    // Cannot assign to globals
+    someUnknownGlobal = true;
+    moduleLocal = true;
+  };
+  // It's possible that this could be an event handler / effect function,
+  // but we don't know that and optimistically assume it will only be
+  // called by an event handler or effect, where it is allowed to modify globals
+  return <div onClick={onClick} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime";
+function Component() {
+  const $ = _c(1);
+  let t0;
+  if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
+    const onClick = () => {
+      someUnknownGlobal = true;
+      moduleLocal = true;
+    };
+
+    t0 = <div onClick={onClick} />;
+    $[0] = t0;
+  } else {
+    t0 = $[0];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{}],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div></div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-reassignment-to-global-function-jsx-prop.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-reassignment-to-global-function-jsx-prop.js
new file mode 100644
index 00000000000..8b9da9eb311
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/allow-reassignment-to-global-function-jsx-prop.js
@@ -0,0 +1,16 @@
+function Component() {
+  const onClick = () => {
+    // Cannot assign to globals
+    someUnknownGlobal = true;
+    moduleLocal = true;
+  };
+  // It's possible that this could be an event handler / effect function,
+  // but we don't know that and optimistically assume it will only be
+  // called by an event handler or effect, where it is allowed to modify globals
+  return <div onClick={onClick} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-component-tag-function.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-component-tag-function.expect.md
new file mode 100644
index 00000000000..5553f235a08
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-component-tag-function.expect.md
@@ -0,0 +1,27 @@
+
+## Input
+
+```javascript
+function Component() {
+  const Foo = () => {
+    someGlobal = true;
+  };
+  return <Foo />;
+}
+
+```
+
+
+## Error
+
+```
+  1 | function Component() {
+  2 |   const Foo = () => {
+> 3 |     someGlobal = true;
+    |     ^^^^^^^^^^ InvalidReact: Unexpected reassignment of a variable which was defined outside of the component. Components and hooks should be pure and side-effect free, but variable reassignment is a form of side-effect. If this variable is used in rendering, use useState instead. (https://react.dev/reference/rules/components-and-hooks-must-be-pure#side-effects-must-run-outside-of-render) (3:3)
+  4 |   };
+  5 |   return <Foo />;
+  6 | }
+```
+          
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-component-tag-function.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-component-tag-function.js
new file mode 100644
index 00000000000..2982fdf7085
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-component-tag-function.js
@@ -0,0 +1,6 @@
+function Component() {
+  const Foo = () => {
+    someGlobal = true;
+  };
+  return <Foo />;
+}
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-children.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-children.expect.md
new file mode 100644
index 00000000000..d380137836c
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-children.expect.md
@@ -0,0 +1,30 @@
+
+## Input
+
+```javascript
+function Component() {
+  const foo = () => {
+    someGlobal = true;
+  };
+  // Children are generally access/called during render, so
+  // modifying a global in a children function is almost
+  // certainly a mistake.
+  return <Foo>{foo}</Foo>;
+}
+
+```
+
+
+## Error
+
+```
+  1 | function Component() {
+  2 |   const foo = () => {
+> 3 |     someGlobal = true;
+    |     ^^^^^^^^^^ InvalidReact: Unexpected reassignment of a variable which was defined outside of the component. Components and hooks should be pure and side-effect free, but variable reassignment is a form of side-effect. If this variable is used in rendering, use useState instead. (https://react.dev/reference/rules/components-and-hooks-must-be-pure#side-effects-must-run-outside-of-render) (3:3)
+  4 |   };
+  5 |   // Children are generally access/called during render, so
+  6 |   // modifying a global in a children function is almost
+```
+          
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-children.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-children.js
new file mode 100644
index 00000000000..82554e8ac43
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-children.js
@@ -0,0 +1,9 @@
+function Component() {
+  const foo = () => {
+    someGlobal = true;
+  };
+  // Children are generally access/called during render, so
+  // modifying a global in a children function is almost
+  // certainly a mistake.
+  return <Foo>{foo}</Foo>;
+}
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-spread-attribute.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-spread-attribute.expect.md
new file mode 100644
index 00000000000..3861b16e90d
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-spread-attribute.expect.md
@@ -0,0 +1,27 @@
+
+## Input
+
+```javascript
+function Component() {
+  const foo = () => {
+    someGlobal = true;
+  };
+  return <div {...foo} />;
+}
+
+```
+
+
+## Error
+
+```
+  1 | function Component() {
+  2 |   const foo = () => {
+> 3 |     someGlobal = true;
+    |     ^^^^^^^^^^ InvalidReact: Unexpected reassignment of a variable which was defined outside of the component. Components and hooks should be pure and side-effect free, but variable reassignment is a form of side-effect. If this variable is used in rendering, use useState instead. (https://react.dev/reference/rules/components-and-hooks-must-be-pure#side-effects-must-run-outside-of-render) (3:3)
+  4 |   };
+  5 |   return <div {...foo} />;
+  6 | }
+```
+          
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-spread-attribute.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-spread-attribute.js
new file mode 100644
index 00000000000..1eea9267b50
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.assign-global-in-jsx-spread-attribute.js
@@ -0,0 +1,6 @@
+function Component() {
+  const foo = () => {
+    someGlobal = true;
+  };
+  return <div {...foo} />;
+}
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.reassignment-to-global-function-prop.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.reassignment-to-global-function-prop.expect.md
deleted file mode 100644
index 56132c34c14..00000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.reassignment-to-global-function-prop.expect.md
+++ /dev/null
@@ -1,32 +0,0 @@
-
-## Input
-
-```javascript
-function Component() {
-  const foo = () => {
-    // Cannot assign to globals
-    someUnknownGlobal = true;
-    moduleLocal = true;
-  };
-  // It's possible that this could be an event handler / effect function,
-  // but we don't know that and conservatively assume it's a render helper
-  // where it's disallowed to modify globals
-  return <Foo foo={foo} />;
-}
-
-```
-
-
-## Error
-
-```
-  2 |   const foo = () => {
-  3 |     // Cannot assign to globals
-> 4 |     someUnknownGlobal = true;
-    |     ^^^^^^^^^^^^^^^^^ InvalidReact: Unexpected reassignment of a variable which was defined outside of the component. Components and hooks should be pure and side-effect free, but variable reassignment is a form of side-effect. If this variable is used in rendering, use useState instead. (https://react.dev/reference/rules/components-and-hooks-must-be-pure#side-effects-must-run-outside-of-render) (4:4)
-  5 |     moduleLocal = true;
-  6 |   };
-  7 |   // It's possible that this could be an event handler / effect function,
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.reassignment-to-global-function-prop.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.reassignment-to-global-function-prop.js
deleted file mode 100644
index 926f4c048fd..00000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.reassignment-to-global-function-prop.js
+++ /dev/null
@@ -1,11 +0,0 @@
-function Component() {
-  const foo = () => {
-    // Cannot assign to globals
-    someUnknownGlobal = true;
-    moduleLocal = true;
-  };
-  // It's possible that this could be an event handler / effect function,
-  // but we don't know that and conservatively assume it's a render helper
-  // where it's disallowed to modify globals
-  return <Foo foo={foo} />;
-}