diff --git a/.changeset/light-cooks-deny.md b/.changeset/light-cooks-deny.md
new file mode 100644
index 0000000..08886e2
--- /dev/null
+++ b/.changeset/light-cooks-deny.md
@@ -0,0 +1,5 @@
+---
+"@pandacss/eslint-plugin": patch
+---
+
+Improve nested styling detection in `no-invalid-nesting` rule
diff --git a/plugin/src/rules/no-invalid-nesting.ts b/plugin/src/rules/no-invalid-nesting.ts
index 55b5421..9a342b6 100644
--- a/plugin/src/rules/no-invalid-nesting.ts
+++ b/plugin/src/rules/no-invalid-nesting.ts
@@ -1,6 +1,6 @@
 import { isIdentifier, isLiteral, isObjectExpression, isTemplateLiteral } from '../utils/nodes'
 import { type Rule, createRule } from '../utils'
-import { isInJSXProp, isInPandaFunction } from '../utils/helpers'
+import { isPandaAttribute } from '../utils/helpers'
 
 export const RULE_NAME = 'no-invalid-nesting'
 
@@ -21,7 +21,7 @@ const rule: Rule = createRule({
     return {
       Property(node) {
         if (!isObjectExpression(node.value) || isIdentifier(node.key)) return
-        if (!isInPandaFunction(node, context) && !isInJSXProp(node, context)) return
+        if (isPandaAttribute(node, context)) return
 
         const invalidLiteral =
           isLiteral(node.key) && typeof node.key.value === 'string' && !node.key.value.includes('&')
diff --git a/plugin/src/utils/helpers.ts b/plugin/src/utils/helpers.ts
index dcc7227..822bcc4 100644
--- a/plugin/src/utils/helpers.ts
+++ b/plugin/src/utils/helpers.ts
@@ -163,7 +163,7 @@ export const isPandaProp = (node: TSESTree.JSXAttribute, context: RuleContext<an
   return true
 }
 
-export const isStyledProperty = (node: TSESTree.Property, context: RuleContext<any, any>, calleeName: string) => {
+export const isStyledProperty = (node: TSESTree.Property, context: RuleContext<any, any>, calleeName?: string) => {
   if (!isIdentifier(node.key) && !isLiteral(node.key) && !isTemplateLiteral(node.key)) return
 
   if (isIdentifier(node.key) && !isValidProperty(node.key.name, context, calleeName)) return
@@ -221,7 +221,7 @@ export const isPandaAttribute = (node: TSESTree.Property, context: RuleContext<a
   }
 
   // Object could be in JSX prop value i.e css prop or a pseudo
-  return isInJSXProp(node, context)
+  return isInJSXProp(node, context) && isStyledProperty(node, context)
 }
 
 export const resolveLonghand = (name: string, context: RuleContext<any, any>) => {