diff --git a/compiler/noirc_frontend/src/elaborator/mod.rs b/compiler/noirc_frontend/src/elaborator/mod.rs
index 91d6ba71927..dc99ceae2f0 100644
--- a/compiler/noirc_frontend/src/elaborator/mod.rs
+++ b/compiler/noirc_frontend/src/elaborator/mod.rs
@@ -1302,9 +1302,12 @@ impl<'context> Elaborator<'context> {
 
         for (local_module, id, func) in &mut function_set.functions {
             self.local_module = *local_module;
+            let was_in_contract = self.in_contract;
+            self.in_contract = self.module_id().module(self.def_maps).is_contract;
             self.recover_generics(|this| {
                 this.define_function_meta(func, *id, false);
             });
+            self.in_contract = was_in_contract;
         }
     }
 
diff --git a/test_programs/compile_success_contract/recursive_method/Nargo.toml b/test_programs/compile_success_contract/recursive_method/Nargo.toml
new file mode 100644
index 00000000000..8142e5b3278
--- /dev/null
+++ b/test_programs/compile_success_contract/recursive_method/Nargo.toml
@@ -0,0 +1,6 @@
+[package]
+name = "recursive_method"
+type = "contract"
+authors = [""]
+
+[dependencies]
diff --git a/test_programs/compile_success_contract/recursive_method/src/main.nr b/test_programs/compile_success_contract/recursive_method/src/main.nr
new file mode 100644
index 00000000000..6fd4bf3338d
--- /dev/null
+++ b/test_programs/compile_success_contract/recursive_method/src/main.nr
@@ -0,0 +1,6 @@
+contract Foo {
+    #[recursive]
+    fn contract_entrypoint() -> pub Field {
+        1
+    }
+}