diff --git a/libsolidity/analysis/DocStringTagParser.cpp b/libsolidity/analysis/DocStringTagParser.cpp
index 5dc68d97f..7be9cf8df 100644
--- a/libsolidity/analysis/DocStringTagParser.cpp
+++ b/libsolidity/analysis/DocStringTagParser.cpp
@@ -202,7 +202,7 @@ bool DocStringTagParser::visit(InlineAssembly const& _assembly)
 				if (valuesSeen.insert(value).second)
 				{
 					if (value == "memory-safe-assembly")
-						_assembly.annotation().memorySafe = true;
+						_assembly.annotation().markedMemorySafe = true;
 					else
 						m_errorReporter.warning(
 							8787_error,
diff --git a/libsolidity/analysis/TypeChecker.cpp b/libsolidity/analysis/TypeChecker.cpp
index 74701bde0..955c66f84 100644
--- a/libsolidity/analysis/TypeChecker.cpp
+++ b/libsolidity/analysis/TypeChecker.cpp
@@ -763,6 +763,7 @@ void TypeChecker::endVisit(FunctionTypeName const& _funType)
 
 bool TypeChecker::visit(InlineAssembly const& _inlineAssembly)
 {
+	bool lvalueAccessToMemoryVariable = false;
 	// External references have already been resolved in a prior stage and stored in the annotation.
 	// We run the resolve step again regardless.
 	yul::ExternalIdentifierAccess::Resolver identifierAccess = [&](
@@ -787,6 +788,8 @@ bool TypeChecker::visit(InlineAssembly const& _inlineAssembly)
 		if (auto var = dynamic_cast<VariableDeclaration const*>(declaration))
 		{
 			solAssert(var->type(), "Expected variable type!");
+			if (_context == yul::IdentifierContext::LValue && var->type()->dataStoredIn(DataLocation::Memory))
+				lvalueAccessToMemoryVariable = true;
 			if (var->immutable())
 			{
 				m_errorReporter.typeError(3773_error, nativeLocationOf(_identifier), "Assembly access to immutable variables is not supported.");
@@ -974,8 +977,11 @@ bool TypeChecker::visit(InlineAssembly const& _inlineAssembly)
 		identifierAccess
 	);
 	if (!analyzer.analyze(_inlineAssembly.operations()))
-		return false;
-	return true;
+		solAssert(m_errorReporter.hasErrors());
+	_inlineAssembly.annotation().hasMemoryEffects =
+		lvalueAccessToMemoryVariable ||
+		(analyzer.sideEffects().memory != yul::SideEffects::None);
+	return false;
 }
 
 bool TypeChecker::visit(IfStatement const& _ifStatement)
diff --git a/libsolidity/ast/ASTAnnotations.h b/libsolidity/ast/ASTAnnotations.h
index 4489dce8d..0d6901ef2 100644
--- a/libsolidity/ast/ASTAnnotations.h
+++ b/libsolidity/ast/ASTAnnotations.h
@@ -221,7 +221,9 @@ struct InlineAssemblyAnnotation: StatementAnnotation
 	/// Information generated during analysis phase.
 	std::shared_ptr<yul::AsmAnalysisInfo> analysisInfo;
 	/// True, if the assembly block was annotated to be memory-safe.
-	bool memorySafe = false;
+	bool markedMemorySafe = false;
+	/// True, if the assembly block involves any memory opcode or assigns to variables in memory.
+	SetOnce<bool> hasMemoryEffects;
 };
 
 struct BlockAnnotation: StatementAnnotation, ScopableAnnotation
diff --git a/libsolidity/codegen/ir/IRGeneratorForStatements.cpp b/libsolidity/codegen/ir/IRGeneratorForStatements.cpp
index cf0977c6e..263f90261 100644
--- a/libsolidity/codegen/ir/IRGeneratorForStatements.cpp
+++ b/libsolidity/codegen/ir/IRGeneratorForStatements.cpp
@@ -2138,7 +2138,7 @@ void IRGeneratorForStatements::endVisit(MemberAccess const& _memberAccess)
 bool IRGeneratorForStatements::visit(InlineAssembly const& _inlineAsm)
 {
 	setLocation(_inlineAsm);
-	if (!_inlineAsm.annotation().memorySafe)
+	if (*_inlineAsm.annotation().hasMemoryEffects && !_inlineAsm.annotation().markedMemorySafe)
 		m_context.setMemoryUnsafeInlineAssemblySeen();
 	CopyTranslate bodyCopier{_inlineAsm.dialect(), m_context, _inlineAsm.annotation().externalReferences};
 
diff --git a/libyul/AsmAnalysis.cpp b/libyul/AsmAnalysis.cpp
index d19aa1a4e..c38c0ba8e 100644
--- a/libyul/AsmAnalysis.cpp
+++ b/libyul/AsmAnalysis.cpp
@@ -316,6 +316,7 @@ vector<YulString> AsmAnalyzer::operator()(FunctionCall const& _funCall)
 			literalArguments = &f->literalArguments;
 
 		validateInstructions(_funCall);
+		m_sideEffects += f->sideEffects;
 	}
 	else if (m_currentScope->lookup(_funCall.functionName.name, GenericVisitor{
 		[&](Scope::Variable const&)
diff --git a/libyul/AsmAnalysis.h b/libyul/AsmAnalysis.h
index dc2770500..c71b4cbe3 100644
--- a/libyul/AsmAnalysis.h
+++ b/libyul/AsmAnalysis.h
@@ -94,6 +94,8 @@ public:
 	void operator()(Leave const&) { }
 	void operator()(Block const& _block);
 
+	/// @returns the worst side effects encountered during analysis (including within defined functions).
+	SideEffects const& sideEffects() const { return m_sideEffects; }
 private:
 	/// Visits the expression, expects that it evaluates to exactly one value and
 	/// returns the type. Reports errors on errors and returns the default type.
@@ -128,6 +130,8 @@ private:
 	/// Names of data objects to be referenced by builtin functions with literal arguments.
 	std::set<YulString> m_dataNames;
 	ForLoop const* m_currentForLoop = nullptr;
+	/// Worst side effects encountered during analysis (including within defined functions).
+	SideEffects m_sideEffects;
 };
 
 }