diff --git a/compiler/packages/babel-plugin-react-compiler/src/Entrypoint/Program.ts b/compiler/packages/babel-plugin-react-compiler/src/Entrypoint/Program.ts
index 1aabb1acca723..049fe58e1b419 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/Entrypoint/Program.ts
+++ b/compiler/packages/babel-plugin-react-compiler/src/Entrypoint/Program.ts
@@ -196,6 +196,7 @@ export function createNewFunctionNode(
 }
 
 function insertNewOutlinedFunctionNode(
+  program: NodePath<t.Program>,
   originalFn: BabelFn,
   compiledFn: CodegenFunction,
 ): NodePath<t.Function> {
@@ -216,14 +217,6 @@ function insertNewOutlinedFunctionNode(
      */
     case 'ArrowFunctionExpression':
     case 'FunctionExpression': {
-      CompilerError.invariant(
-        originalFn.parentPath.isVariableDeclarator() &&
-          originalFn.parentPath.parentPath.isVariableDeclaration(),
-        {
-          reason: 'Expected a variable declarator parent',
-          loc: originalFn.node.loc ?? null,
-        },
-      );
       const fn: t.FunctionDeclaration = {
         type: 'FunctionDeclaration',
         id: compiledFn.id,
@@ -233,8 +226,7 @@ function insertNewOutlinedFunctionNode(
         params: compiledFn.params,
         body: compiledFn.body,
       };
-      const varDecl = originalFn.parentPath.parentPath;
-      const insertedFuncDecl = varDecl.insertAfter(fn)[0]!;
+      const insertedFuncDecl = program.pushContainer('body', [fn])[0]!;
       CompilerError.invariant(insertedFuncDecl.isFunctionDeclaration(), {
         reason: 'Expected inserted function declaration',
         description: `Got: ${insertedFuncDecl}`,
@@ -468,7 +460,11 @@ export function compileProgram(
         reason: 'Unexpected nested outlined functions',
         loc: outlined.fn.loc,
       });
-      const fn = insertNewOutlinedFunctionNode(current.fn, outlined.fn);
+      const fn = insertNewOutlinedFunctionNode(
+        program,
+        current.fn,
+        outlined.fn,
+      );
       fn.skip();
       ALREADY_COMPILED.add(fn.node);
       if (outlined.type !== null) {
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.bug-outlining-in-react-memo.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.bug-outlining-in-react-memo.expect.md
deleted file mode 100644
index e49df32c8c3eb..0000000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.bug-outlining-in-react-memo.expect.md
+++ /dev/null
@@ -1,62 +0,0 @@
-
-## Input
-
-```javascript
-function Component(props) {
-  return <View {...props} />;
-}
-
-const View = React.memo(({items}) => {
-  return (
-    <ul>
-      {items.map(item => (
-        <li key={item.id}>{item.name}</li>
-      ))}
-    </ul>
-  );
-});
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [
-    {
-      items: [
-        {id: 2, name: 'foo'},
-        {id: 3, name: 'bar'},
-      ],
-    },
-  ],
-};
-
-```
-
-
-## Error
-
-```
-   3 | }
-   4 |
->  5 | const View = React.memo(({items}) => {
-     |                         ^^^^^^^^^^^^^^
->  6 |   return (
-     | ^^^^^^^^^^
->  7 |     <ul>
-     | ^^^^^^^^^^
->  8 |       {items.map(item => (
-     | ^^^^^^^^^^
->  9 |         <li key={item.id}>{item.name}</li>
-     | ^^^^^^^^^^
-> 10 |       ))}
-     | ^^^^^^^^^^
-> 11 |     </ul>
-     | ^^^^^^^^^^
-> 12 |   );
-     | ^^^^^^^^^^
-> 13 | });
-     | ^^ Invariant: Expected a variable declarator parent (5:13)
-  14 |
-  15 | export const FIXTURE_ENTRYPOINT = {
-  16 |   fn: Component,
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-func-expr.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-func-expr.expect.md
index b403368e8a6b7..d97c06481c2e1 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-func-expr.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-func-expr.expect.md
@@ -50,9 +50,6 @@ const Component2 = (props) => {
   }
   return t1;
 };
-function _temp(item) {
-  return <li key={item.id}>{item.name}</li>;
-}
 
 export const FIXTURE_ENTRYPOINT = {
   fn: Component2,
@@ -65,6 +62,9 @@ export const FIXTURE_ENTRYPOINT = {
     },
   ],
 };
+function _temp(item) {
+  return <li key={item.id}>{item.name}</li>;
+}
 
 ```
       
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-react-memo.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-react-memo.expect.md
new file mode 100644
index 0000000000000..11d4646c65538
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-react-memo.expect.md
@@ -0,0 +1,90 @@
+
+## Input
+
+```javascript
+function Component(props) {
+  return <View {...props} />;
+}
+
+const View = React.memo(({items}) => {
+  return (
+    <ul>
+      {items.map(item => (
+        <li key={item.id}>{item.name}</li>
+      ))}
+    </ul>
+  );
+});
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [
+    {
+      items: [
+        {id: 2, name: 'foo'},
+        {id: 3, name: 'bar'},
+      ],
+    },
+  ],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime";
+function Component(props) {
+  const $ = _c(2);
+  let t0;
+  if ($[0] !== props) {
+    t0 = <View {...props} />;
+    $[0] = props;
+    $[1] = t0;
+  } else {
+    t0 = $[1];
+  }
+  return t0;
+}
+
+const View = React.memo((t0) => {
+  const $ = _c(4);
+  const { items } = t0;
+  let t1;
+  if ($[0] !== items) {
+    t1 = items.map(_temp);
+    $[0] = items;
+    $[1] = t1;
+  } else {
+    t1 = $[1];
+  }
+  let t2;
+  if ($[2] !== t1) {
+    t2 = <ul>{t1}</ul>;
+    $[2] = t1;
+    $[3] = t2;
+  } else {
+    t2 = $[3];
+  }
+  return t2;
+});
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [
+    {
+      items: [
+        { id: 2, name: "foo" },
+        { id: 3, name: "bar" },
+      ],
+    },
+  ],
+};
+function _temp(item) {
+  return <li key={item.id}>{item.name}</li>;
+}
+
+```
+      
+### Eval output
+(kind: ok) <ul><li>foo</li><li>bar</li></ul>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.bug-outlining-in-react-memo.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-react-memo.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.bug-outlining-in-react-memo.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/outlining-in-react-memo.js