diff --git a/mypy/semanal.py b/mypy/semanal.py
index 782985e3fbab..522b4abdd5e9 100644
--- a/mypy/semanal.py
+++ b/mypy/semanal.py
@@ -824,6 +824,11 @@ def file_context(
             self.num_incomplete_refs = 0
 
             if active_type:
+                enclosing_fullname = active_type.fullname.rsplit(".", 1)[0]
+                if "." in enclosing_fullname:
+                    enclosing_node = self.lookup_fully_qualified_or_none(enclosing_fullname)
+                    if enclosing_node and isinstance(enclosing_node.node, TypeInfo):
+                        self._type = enclosing_node.node
                 self.push_type_args(active_type.defn.type_args, active_type.defn)
                 self.incomplete_type_stack.append(False)
                 scope.enter_class(active_type)
diff --git a/test-data/unit/check-python312.test b/test-data/unit/check-python312.test
index a3f4c87120cd..89ced8be2c6f 100644
--- a/test-data/unit/check-python312.test
+++ b/test-data/unit/check-python312.test
@@ -1713,3 +1713,69 @@ type XNested = (1 + (yield 1))  # E: Yield expression cannot be used within a ty
 type YNested = (1 + (yield from [])) # E: Yield expression cannot be used within a type alias
 type ZNested = (1 + (a := 1))  # E: Named expression cannot be used within a type alias
 type KNested = (1 + (await 1))  # E: Await expression cannot be used within a type alias
+
+[case testPEP695NestedGenericClass1]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+class C[T]:
+    def f(self) -> T: ...
+
+class A:
+    class B[Q]:
+        def __init__(self, a: Q) -> None:
+            self.a = a
+
+        def f(self) -> Q:
+            return self.a
+
+        def g(self, x: Q) -> None: ...
+
+    b: B[str]
+
+x: A.B[int]
+x.g("x")  # E: Argument 1 to "g" of "B" has incompatible type "str"; expected "int"
+reveal_type(x.a)  # N: Revealed type is "builtins.int"
+reveal_type(x)  # N: Revealed type is "__main__.A.B[builtins.int]"
+reveal_type(A.b)  # N: Revealed type is "__main__.A.B[builtins.str]"
+
+[case testPEP695NestedGenericClass2]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+class A:
+    def m(self) -> None:
+        class B[T]:
+            def f(self) -> T: ...
+        x: B[int]
+        reveal_type(x.f())  # N: Revealed type is "builtins.int"
+        self.a = B[str]()
+
+reveal_type(A().a)  # N: Revealed type is "__main__.B@4[builtins.str]"
+reveal_type(A().a.f())  # N: Revealed type is "builtins.str"
+
+[case testPEP695NestedGenericClass3]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+class C[T]:
+    def f(self) -> T: ...
+    class D[S]:
+        x: T  # E: Name "T" is not defined
+        def g(self) -> S: ...
+
+a: C[int]
+reveal_type(a.f())  # N: Revealed type is "builtins.int"
+b: C.D[str]
+reveal_type(b.g())  # N: Revealed type is "builtins.str"
+
+class E[T]:
+    class F[T]:  # E: "T" already defined as a type parameter
+        x: T
+
+c: E.F[int]
+
+[case testPEP695NestedGenericClass4]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+class A:
+    class B[T]:
+        def __get__(self, instance: A, owner: type[A]) -> T:
+            return None  # E: Incompatible return value type (got "None", expected "T")
+    f = B[int]()
+
+a = A()
+v = a.f
diff --git a/test-data/unit/fine-grained-python312.test b/test-data/unit/fine-grained-python312.test
index 3970c8cacfbf..80e4e4ca3bd8 100644
--- a/test-data/unit/fine-grained-python312.test
+++ b/test-data/unit/fine-grained-python312.test
@@ -80,3 +80,23 @@ from builtins import tuple as B
 ==
 main:4: error: Incompatible types in assignment (expression has type "int", variable has type "tuple[int, str]")
 main:5: error: Incompatible types in assignment (expression has type "str", variable has type "tuple[int, str]")
+
+[case testPEP695NestedGenericClassMethodUpdated]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+from a import f
+
+class C:
+    class D[T]:
+        x: T
+        def m(self) -> T:
+            f()
+            return self.x
+
+[file a.py]
+def f() -> None: pass
+
+[file a.py.2]
+def f(x: int) -> None: pass
+[out]
+==
+main:8: error: Missing positional argument "x" in call to "f"