diff --git a/src/compiler/binder.ts b/src/compiler/binder.ts
index b01352968eb42..1ab005dd99c73 100644
--- a/src/compiler/binder.ts
+++ b/src/compiler/binder.ts
@@ -2707,6 +2707,28 @@ function createBinder(): (file: SourceFile, options: CompilerOptions) => void {
         }
     }
 
+    // Function declarations are not allowed as the direct child of a statement in strict mode.
+    // For example: `if (true) function f() {}` is a syntax error in strict mode.
+    function checkStrictModeFunctionDeclarationAsStatementChild(node: FunctionDeclaration) {
+        if (!inStrictMode) {
+            return;
+        }
+        const parent = node.parent;
+        switch (parent.kind) {
+            case SyntaxKind.IfStatement:
+            case SyntaxKind.DoStatement:
+            case SyntaxKind.WhileStatement:
+            case SyntaxKind.ForStatement:
+            case SyntaxKind.ForInStatement:
+            case SyntaxKind.ForOfStatement:
+            case SyntaxKind.WithStatement:
+            case SyntaxKind.LabeledStatement:
+                const errorSpan = getErrorSpanForNode(file, node);
+                file.bindDiagnostics.push(createFileDiagnostic(file, errorSpan.start, errorSpan.length, Diagnostics.In_strict_mode_code_functions_can_only_be_declared_at_top_level_or_inside_a_block));
+                break;
+        }
+    }
+
     function checkStrictModePostfixUnaryExpression(node: PostfixUnaryExpression) {
         // Grammar checking
         // The identifier eval or arguments may not appear as the LeftHandSideExpression of an
@@ -3713,6 +3735,7 @@ function createBinder(): (file: SourceFile, options: CompilerOptions) => void {
         }
 
         checkStrictModeFunctionName(node);
+        checkStrictModeFunctionDeclarationAsStatementChild(node);
         if (inStrictMode) {
             checkStrictModeFunctionDeclaration(node);
             bindBlockScopedDeclaration(node, SymbolFlags.Function, SymbolFlags.FunctionExcludes);
diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index 03f5f19a69877..43b087c9a4a06 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -823,6 +823,10 @@
         "category": "Error",
         "code": 1255
     },
+    "In strict mode code, functions can only be declared at top level or inside a block.": {
+        "category": "Error",
+        "code": 1256
+    },
     "A required element cannot follow an optional element.": {
         "category": "Error",
         "code": 1257
diff --git a/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.errors.txt b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.errors.txt
new file mode 100644
index 0000000000000..8bb0f2a99ed24
--- /dev/null
+++ b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.errors.txt
@@ -0,0 +1,53 @@
+functionDeclarationAsStatementInStrictMode.ts(2,20): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+functionDeclarationAsStatementInStrictMode.ts(3,23): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+functionDeclarationAsStatementInStrictMode.ts(4,13): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+functionDeclarationAsStatementInStrictMode.ts(5,19): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+functionDeclarationAsStatementInStrictMode.ts(6,28): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+functionDeclarationAsStatementInStrictMode.ts(7,28): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+functionDeclarationAsStatementInStrictMode.ts(8,1): error TS1344: 'A label is not allowed here.
+functionDeclarationAsStatementInStrictMode.ts(8,17): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+
+
+==== functionDeclarationAsStatementInStrictMode.ts (8 errors) ====
+    // Error cases - function declarations as direct children of statements in strict mode
+    if (true) function f1() {}
+                       ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    while (true) function f2() {}
+                          ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    do function f3() {} while (false);
+                ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    for (;;) function f4() {}
+                      ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    for (let x in {}) function f5() {}
+                               ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    for (let x of []) function f6() {}
+                               ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    label: function f7() {}
+    ~~~~~
+!!! error TS1344: 'A label is not allowed here.
+                    ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
+    
+    // Valid cases - function declarations inside blocks
+    if (true) { function g1() {} }
+    while (true) { function g2() {} }
+    do { function g3() {} } while (false);
+    for (;;) { function g4() {} }
+    for (let x in {}) { function g5() {} }
+    for (let x of []) { function g6() {} }
+    label: { function g7() {} }
+    
+    // Valid - top level
+    function topLevel() {}
+    
+    // Valid - inside function body
+    function outer() {
+        function inner() {}
+    }
+    
\ No newline at end of file
diff --git a/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.js b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.js
new file mode 100644
index 0000000000000..b79687c2c7dd6
--- /dev/null
+++ b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.js
@@ -0,0 +1,75 @@
+//// [tests/cases/compiler/functionDeclarationAsStatementInStrictMode.ts] ////
+
+//// [functionDeclarationAsStatementInStrictMode.ts]
+// Error cases - function declarations as direct children of statements in strict mode
+if (true) function f1() {}
+while (true) function f2() {}
+do function f3() {} while (false);
+for (;;) function f4() {}
+for (let x in {}) function f5() {}
+for (let x of []) function f6() {}
+label: function f7() {}
+
+// Valid cases - function declarations inside blocks
+if (true) { function g1() {} }
+while (true) { function g2() {} }
+do { function g3() {} } while (false);
+for (;;) { function g4() {} }
+for (let x in {}) { function g5() {} }
+for (let x of []) { function g6() {} }
+label: { function g7() {} }
+
+// Valid - top level
+function topLevel() {}
+
+// Valid - inside function body
+function outer() {
+    function inner() {}
+}
+
+
+//// [functionDeclarationAsStatementInStrictMode.js]
+"use strict";
+// Error cases - function declarations as direct children of statements in strict mode
+if (true)
+    function f1() { }
+while (true)
+    function f2() { }
+do
+    function f3() { }
+while (false);
+for (;;)
+    function f4() { }
+for (let x in {})
+    function f5() { }
+for (let x of [])
+    function f6() { }
+label: function f7() { }
+// Valid cases - function declarations inside blocks
+if (true) {
+    function g1() { }
+}
+while (true) {
+    function g2() { }
+}
+do {
+    function g3() { }
+} while (false);
+for (;;) {
+    function g4() { }
+}
+for (let x in {}) {
+    function g5() { }
+}
+for (let x of []) {
+    function g6() { }
+}
+label: {
+    function g7() { }
+}
+// Valid - top level
+function topLevel() { }
+// Valid - inside function body
+function outer() {
+    function inner() { }
+}
diff --git a/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.symbols b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.symbols
new file mode 100644
index 0000000000000..1f408d25375d2
--- /dev/null
+++ b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.symbols
@@ -0,0 +1,63 @@
+//// [tests/cases/compiler/functionDeclarationAsStatementInStrictMode.ts] ////
+
+=== functionDeclarationAsStatementInStrictMode.ts ===
+// Error cases - function declarations as direct children of statements in strict mode
+if (true) function f1() {}
+>f1 : Symbol(f1, Decl(functionDeclarationAsStatementInStrictMode.ts, 1, 9))
+
+while (true) function f2() {}
+>f2 : Symbol(f2, Decl(functionDeclarationAsStatementInStrictMode.ts, 2, 12))
+
+do function f3() {} while (false);
+>f3 : Symbol(f3, Decl(functionDeclarationAsStatementInStrictMode.ts, 3, 2))
+
+for (;;) function f4() {}
+>f4 : Symbol(f4, Decl(functionDeclarationAsStatementInStrictMode.ts, 4, 8))
+
+for (let x in {}) function f5() {}
+>x : Symbol(x, Decl(functionDeclarationAsStatementInStrictMode.ts, 5, 8))
+>f5 : Symbol(f5, Decl(functionDeclarationAsStatementInStrictMode.ts, 5, 17))
+
+for (let x of []) function f6() {}
+>x : Symbol(x, Decl(functionDeclarationAsStatementInStrictMode.ts, 6, 8))
+>f6 : Symbol(f6, Decl(functionDeclarationAsStatementInStrictMode.ts, 6, 17))
+
+label: function f7() {}
+>f7 : Symbol(f7, Decl(functionDeclarationAsStatementInStrictMode.ts, 7, 6))
+
+// Valid cases - function declarations inside blocks
+if (true) { function g1() {} }
+>g1 : Symbol(g1, Decl(functionDeclarationAsStatementInStrictMode.ts, 10, 11))
+
+while (true) { function g2() {} }
+>g2 : Symbol(g2, Decl(functionDeclarationAsStatementInStrictMode.ts, 11, 14))
+
+do { function g3() {} } while (false);
+>g3 : Symbol(g3, Decl(functionDeclarationAsStatementInStrictMode.ts, 12, 4))
+
+for (;;) { function g4() {} }
+>g4 : Symbol(g4, Decl(functionDeclarationAsStatementInStrictMode.ts, 13, 10))
+
+for (let x in {}) { function g5() {} }
+>x : Symbol(x, Decl(functionDeclarationAsStatementInStrictMode.ts, 14, 8))
+>g5 : Symbol(g5, Decl(functionDeclarationAsStatementInStrictMode.ts, 14, 19))
+
+for (let x of []) { function g6() {} }
+>x : Symbol(x, Decl(functionDeclarationAsStatementInStrictMode.ts, 15, 8))
+>g6 : Symbol(g6, Decl(functionDeclarationAsStatementInStrictMode.ts, 15, 19))
+
+label: { function g7() {} }
+>g7 : Symbol(g7, Decl(functionDeclarationAsStatementInStrictMode.ts, 16, 8))
+
+// Valid - top level
+function topLevel() {}
+>topLevel : Symbol(topLevel, Decl(functionDeclarationAsStatementInStrictMode.ts, 16, 27))
+
+// Valid - inside function body
+function outer() {
+>outer : Symbol(outer, Decl(functionDeclarationAsStatementInStrictMode.ts, 19, 22))
+
+    function inner() {}
+>inner : Symbol(inner, Decl(functionDeclarationAsStatementInStrictMode.ts, 22, 18))
+}
+
diff --git a/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.types b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.types
new file mode 100644
index 0000000000000..c5cbe73becb95
--- /dev/null
+++ b/tests/baselines/reference/functionDeclarationAsStatementInStrictMode.types
@@ -0,0 +1,108 @@
+//// [tests/cases/compiler/functionDeclarationAsStatementInStrictMode.ts] ////
+
+=== functionDeclarationAsStatementInStrictMode.ts ===
+// Error cases - function declarations as direct children of statements in strict mode
+if (true) function f1() {}
+>true : true
+>     : ^^^^
+>f1 : () => void
+>   : ^^^^^^^^^^
+
+while (true) function f2() {}
+>true : true
+>     : ^^^^
+>f2 : () => void
+>   : ^^^^^^^^^^
+
+do function f3() {} while (false);
+>f3 : () => void
+>   : ^^^^^^^^^^
+>false : false
+>      : ^^^^^
+
+for (;;) function f4() {}
+>f4 : () => void
+>   : ^^^^^^^^^^
+
+for (let x in {}) function f5() {}
+>x : string
+>  : ^^^^^^
+>{} : {}
+>   : ^^
+>f5 : () => void
+>   : ^^^^^^^^^^
+
+for (let x of []) function f6() {}
+>x : never
+>  : ^^^^^
+>[] : never[]
+>   : ^^^^^^^
+>f6 : () => void
+>   : ^^^^^^^^^^
+
+label: function f7() {}
+>label : any
+>      : ^^^
+>f7 : () => void
+>   : ^^^^^^^^^^
+
+// Valid cases - function declarations inside blocks
+if (true) { function g1() {} }
+>true : true
+>     : ^^^^
+>g1 : () => void
+>   : ^^^^^^^^^^
+
+while (true) { function g2() {} }
+>true : true
+>     : ^^^^
+>g2 : () => void
+>   : ^^^^^^^^^^
+
+do { function g3() {} } while (false);
+>g3 : () => void
+>   : ^^^^^^^^^^
+>false : false
+>      : ^^^^^
+
+for (;;) { function g4() {} }
+>g4 : () => void
+>   : ^^^^^^^^^^
+
+for (let x in {}) { function g5() {} }
+>x : string
+>  : ^^^^^^
+>{} : {}
+>   : ^^
+>g5 : () => void
+>   : ^^^^^^^^^^
+
+for (let x of []) { function g6() {} }
+>x : never
+>  : ^^^^^
+>[] : never[]
+>   : ^^^^^^^
+>g6 : () => void
+>   : ^^^^^^^^^^
+
+label: { function g7() {} }
+>label : any
+>      : ^^^
+>g7 : () => void
+>   : ^^^^^^^^^^
+
+// Valid - top level
+function topLevel() {}
+>topLevel : () => void
+>         : ^^^^^^^^^^
+
+// Valid - inside function body
+function outer() {
+>outer : () => void
+>      : ^^^^^^^^^^
+
+    function inner() {}
+>inner : () => void
+>      : ^^^^^^^^^^
+}
+
diff --git a/tests/baselines/reference/labeledStatementWithLabel_strict.errors.txt b/tests/baselines/reference/labeledStatementWithLabel_strict.errors.txt
index 4aaa73d420b0e..be2b820a17341 100644
--- a/tests/baselines/reference/labeledStatementWithLabel_strict.errors.txt
+++ b/tests/baselines/reference/labeledStatementWithLabel_strict.errors.txt
@@ -1,6 +1,9 @@
 labeledStatementWithLabel_strict.ts(2,1): error TS1344: 'A label is not allowed here.
+labeledStatementWithLabel_strict.ts(2,17): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
 labeledStatementWithLabel_strict.ts(3,1): error TS1344: 'A label is not allowed here.
+labeledStatementWithLabel_strict.ts(3,18): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
 labeledStatementWithLabel_strict.ts(4,1): error TS1344: 'A label is not allowed here.
+labeledStatementWithLabel_strict.ts(4,23): error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
 labeledStatementWithLabel_strict.ts(5,1): error TS1344: 'A label is not allowed here.
 labeledStatementWithLabel_strict.ts(6,1): error TS1344: 'A label is not allowed here.
 labeledStatementWithLabel_strict.ts(7,1): error TS1344: 'A label is not allowed here.
@@ -14,17 +17,23 @@ labeledStatementWithLabel_strict.ts(13,8): error TS1235: A namespace declaration
 labeledStatementWithLabel_strict.ts(14,1): error TS1344: 'A label is not allowed here.
 
 
-==== labeledStatementWithLabel_strict.ts (14 errors) ====
+==== labeledStatementWithLabel_strict.ts (17 errors) ====
     "use strict"
     label: function fn() { }
     ~~~~~
 !!! error TS1344: 'A label is not allowed here.
+                    ~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
     label: function* gen() { }
     ~~~~~
 !!! error TS1344: 'A label is not allowed here.
+                     ~~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
     label: async function gen1() { }
     ~~~~~
 !!! error TS1344: 'A label is not allowed here.
+                          ~~~~
+!!! error TS1256: In strict mode code, functions can only be declared at top level or inside a block.
     label: enum E {}
     ~~~~~
 !!! error TS1344: 'A label is not allowed here.
diff --git a/tests/cases/compiler/functionDeclarationAsStatementInStrictMode.ts b/tests/cases/compiler/functionDeclarationAsStatementInStrictMode.ts
new file mode 100644
index 0000000000000..83f8eb951e42d
--- /dev/null
+++ b/tests/cases/compiler/functionDeclarationAsStatementInStrictMode.ts
@@ -0,0 +1,28 @@
+// @strict: true
+// @target: ES2020
+
+// Error cases - function declarations as direct children of statements in strict mode
+if (true) function f1() {}
+while (true) function f2() {}
+do function f3() {} while (false);
+for (;;) function f4() {}
+for (let x in {}) function f5() {}
+for (let x of []) function f6() {}
+label: function f7() {}
+
+// Valid cases - function declarations inside blocks
+if (true) { function g1() {} }
+while (true) { function g2() {} }
+do { function g3() {} } while (false);
+for (;;) { function g4() {} }
+for (let x in {}) { function g5() {} }
+for (let x of []) { function g6() {} }
+label: { function g7() {} }
+
+// Valid - top level
+function topLevel() {}
+
+// Valid - inside function body
+function outer() {
+    function inner() {}
+}