diff --git a/packages/next/build/swc/src/styled_jsx/mod.rs b/packages/next/build/swc/src/styled_jsx/mod.rs
index 2abf9985e7a60..80973b2b599e1 100644
--- a/packages/next/build/swc/src/styled_jsx/mod.rs
+++ b/packages/next/build/swc/src/styled_jsx/mod.rs
@@ -36,6 +36,7 @@ struct StyledJSXTransformer {
     has_styled_jsx: bool,
     bindings: AHashSet<Id>,
     nearest_scope_bindings: AHashSet<Id>,
+    func_scope_level: u8,
     style_import_name: Option<String>,
     external_bindings: Vec<Id>,
     file_has_css_resolve: bool,
@@ -185,7 +186,7 @@ impl Fold for StyledJSXTransformer {
             Expr::TaggedTpl(tagged_tpl) => match &*tagged_tpl.tag {
                 Expr::Ident(identifier) => {
                     if self.external_bindings.contains(&identifier.to_id()) {
-                        match self.process_tagged_template_expr(&tagged_tpl) {
+                        match self.process_tagged_template_expr(&tagged_tpl, &identifier.sym) {
                             Ok(expr) => expr,
                             Err(_) => Expr::TaggedTpl(tagged_tpl),
                         }
@@ -199,7 +200,7 @@ impl Fold for StyledJSXTransformer {
                 }) => {
                     if let Expr::Ident(identifier) = &**boxed_ident {
                         if self.external_bindings.contains(&identifier.to_id()) {
-                            match self.process_tagged_template_expr(&tagged_tpl) {
+                            match self.process_tagged_template_expr(&tagged_tpl, &identifier.sym) {
                                 Ok(expr) => expr,
                                 Err(_) => Expr::TaggedTpl(tagged_tpl),
                             }
@@ -320,6 +321,7 @@ impl Fold for StyledJSXTransformer {
     }
 
     fn fold_function(&mut self, mut func: Function) -> Function {
+        self.func_scope_level = self.func_scope_level + 1;
         let surrounding_scope_bindings = take(&mut self.nearest_scope_bindings);
         self.in_function_params = true;
         let mut new_params = vec![];
@@ -331,10 +333,12 @@ impl Fold for StyledJSXTransformer {
         self.nearest_scope_bindings.extend(collect_decls(&func));
         func.body = func.body.fold_with(self);
         self.nearest_scope_bindings = surrounding_scope_bindings;
+        self.func_scope_level = self.func_scope_level - 1;
         func
     }
 
     fn fold_arrow_expr(&mut self, mut func: ArrowExpr) -> ArrowExpr {
+        self.func_scope_level = self.func_scope_level + 1;
         let surrounding_scope_bindings = take(&mut self.nearest_scope_bindings);
         self.in_function_params = true;
         let mut new_params = vec![];
@@ -346,6 +350,7 @@ impl Fold for StyledJSXTransformer {
         self.nearest_scope_bindings.extend(collect_decls(&func));
         func.body = func.body.fold_with(self);
         self.nearest_scope_bindings = surrounding_scope_bindings;
+        self.func_scope_level = self.func_scope_level - 1;
         func
     }
 
@@ -425,11 +430,15 @@ impl StyledJSXTransformer {
                     }
                     css = String::from(s);
                     css_span = *span;
-                    let res = self.evaluator.as_mut().unwrap().eval(&expr);
-                    is_dynamic = if let Some(EvalResult::Lit(_)) = res {
-                        false
+                    is_dynamic = if self.func_scope_level > 0 {
+                        let res = self.evaluator.as_mut().unwrap().eval(&expr);
+                        if let Some(EvalResult::Lit(_)) = res {
+                            false
+                        } else {
+                            true
+                        }
                     } else {
-                        true
+                        false
                     };
                     expressions = exprs.clone();
                 }
@@ -495,7 +504,16 @@ impl StyledJSXTransformer {
         }
     }
 
-    fn process_tagged_template_expr(&mut self, tagged_tpl: &TaggedTpl) -> Result<Expr, Error> {
+    fn process_tagged_template_expr(
+        &mut self,
+        tagged_tpl: &TaggedTpl,
+        tag: &str,
+    ) -> Result<Expr, Error> {
+        if tag != "resolve" {
+            // Check whether there are undefined references or
+            // references to this.something (e.g. props or state).
+            // We allow dynamic styles only when resolving styles.
+        }
         let style = self.get_jsx_style(&Expr::Tpl(tagged_tpl.tpl.clone()), false);
         let styles = vec![style];
         let (static_class_name, class_name) =
diff --git a/packages/next/build/swc/tests/fixture/styled-jsx/styles/input.js b/packages/next/build/swc/tests/fixture/styled-jsx/styles/input.js
index d76049606fd30..7cbd27576cf26 100644
--- a/packages/next/build/swc/tests/fixture/styled-jsx/styles/input.js
+++ b/packages/next/build/swc/tests/fixture/styled-jsx/styles/input.js
@@ -24,7 +24,6 @@ export const uh = bar
 
 export const foo = css`div { color: ${color}}`
 
-// TODO: the next 3 should not transformed as dynamic
 css.resolve`
   div {
     color: ${colors.green.light};
diff --git a/packages/next/build/swc/tests/fixture/styled-jsx/styles/output.js b/packages/next/build/swc/tests/fixture/styled-jsx/styles/output.js
index 057e8963dc33e..eafa22c8e539a 100644
--- a/packages/next/build/swc/tests/fixture/styled-jsx/styles/output.js
+++ b/packages/next/build/swc/tests/fixture/styled-jsx/styles/output.js
@@ -11,32 +11,14 @@ export const uh = bar;
 export const foo = new String(`div.jsx-a0d126276b085021 {color:${color}}`);
 foo.__hash = "a0d126276b085021";
 ({
-    styles: <_JSXStyle id={"47e08c293b53f262"} dynamic={[
-        colors1.green.light
-    ]}>{`div.__jsx-style-dynamic-selector {color:${colors1.green.light}}
-a.__jsx-style-dynamic-selector {color:red}`}</_JSXStyle>,
-    className: _JSXStyle.dynamic([
-        [
-            "47e08c293b53f262",
-            [
-                colors1.green.light
-            ]
-        ]
-    ])
+    styles: <_JSXStyle id={"47e08c293b53f262"}>{`div.jsx-47e08c293b53f262 {color:${colors1.green.light}}
+a.jsx-47e08c293b53f262 {color:red}`}</_JSXStyle>,
+    className: "jsx-47e08c293b53f262"
 });
 const b = {
-    styles: <_JSXStyle id={"47e08c293b53f262"} dynamic={[
-        colors1.green.light
-    ]}>{`div.__jsx-style-dynamic-selector {color:${colors1.green.light}}
-a.__jsx-style-dynamic-selector {color:red}`}</_JSXStyle>,
-    className: _JSXStyle.dynamic([
-        [
-            "47e08c293b53f262",
-            [
-                colors1.green.light
-            ]
-        ]
-    ])
+    styles: <_JSXStyle id={"47e08c293b53f262"}>{`div.jsx-47e08c293b53f262 {color:${colors1.green.light}}
+a.jsx-47e08c293b53f262 {color:red}`}</_JSXStyle>,
+    className: "jsx-47e08c293b53f262"
 };
 const dynamic = (colors)=>{
     const b = {