diff --git a/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateUseMemo.ts b/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateUseMemo.ts
index 05a4b4b91f557..2bccda3a2e930 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateUseMemo.ts
+++ b/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateUseMemo.ts
@@ -184,25 +184,28 @@ function validateNoContextVariableAssignment(
   fn: HIRFunction,
   errors: CompilerError,
 ): void {
+  const context = new Set(fn.context.map(place => place.identifier.id));
   for (const block of fn.body.blocks.values()) {
     for (const instr of block.instructions) {
       const value = instr.value;
       switch (value.kind) {
         case 'StoreContext': {
-          errors.pushDiagnostic(
-            CompilerDiagnostic.create({
-              category: ErrorCategory.UseMemo,
-              reason:
-                'useMemo() callbacks may not reassign variables declared outside of the callback',
-              description:
-                'useMemo() callbacks must be pure functions and cannot reassign variables defined outside of the callback function',
-              suggestions: null,
-            }).withDetails({
-              kind: 'error',
-              loc: value.lvalue.place.loc,
-              message: 'Cannot reassign variable',
-            }),
-          );
+          if (context.has(value.lvalue.place.identifier.id)) {
+            errors.pushDiagnostic(
+              CompilerDiagnostic.create({
+                category: ErrorCategory.UseMemo,
+                reason:
+                  'useMemo() callbacks may not reassign variables declared outside of the callback',
+                description:
+                  'useMemo() callbacks must be pure functions and cannot reassign variables defined outside of the callback function',
+                suggestions: null,
+              }).withDetails({
+                kind: 'error',
+                loc: value.lvalue.place.loc,
+                message: 'Cannot reassign variable',
+              }),
+            );
+          }
           break;
         }
       }
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/reassign-variable-in-usememo.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/reassign-variable-in-usememo.expect.md
new file mode 100644
index 0000000000000..29dc3afcd6fe8
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/reassign-variable-in-usememo.expect.md
@@ -0,0 +1,45 @@
+
+## Input
+
+```javascript
+// @flow
+export hook useItemLanguage(items) {
+  return useMemo(() => {
+    let language: ?string = null;
+    items.forEach(item => {
+      if (item.language != null) {
+        language = item.language;
+      }
+    });
+    return language;
+  }, [items]);
+}
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime";
+export function useItemLanguage(items) {
+  const $ = _c(2);
+  let language;
+  if ($[0] !== items) {
+    language = null;
+    items.forEach((item) => {
+      if (item.language != null) {
+        language = item.language;
+      }
+    });
+    $[0] = items;
+    $[1] = language;
+  } else {
+    language = $[1];
+  }
+  return language;
+}
+
+```
+      
+### Eval output
+(kind: exception) Fixture not implemented
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/reassign-variable-in-usememo.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/reassign-variable-in-usememo.js
new file mode 100644
index 0000000000000..4ed89bfc64337
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/reassign-variable-in-usememo.js
@@ -0,0 +1,12 @@
+// @flow
+export hook useItemLanguage(items) {
+  return useMemo(() => {
+    let language: ?string = null;
+    items.forEach(item => {
+      if (item.language != null) {
+        language = item.language;
+      }
+    });
+    return language;
+  }, [items]);
+}