diff --git a/crates/ruff_python_ast/src/node.rs b/crates/ruff_python_ast/src/node.rs
index 35cfb9147cd81..17725fe0d65ae 100644
--- a/crates/ruff_python_ast/src/node.rs
+++ b/crates/ruff_python_ast/src/node.rs
@@ -4817,7 +4817,7 @@ pub enum AnyNodeRef<'a> {
     ElifElseClause(&'a ast::ElifElseClause),
 }
 
-impl AnyNodeRef<'_> {
+impl<'a> AnyNodeRef<'a> {
     pub fn as_ptr(&self) -> NonNull<()> {
         match self {
             AnyNodeRef::ModModule(node) => NonNull::from(*node).cast(),
@@ -5456,9 +5456,9 @@ impl AnyNodeRef<'_> {
         )
     }
 
-    pub fn visit_preorder<'a, V>(&'a self, visitor: &mut V)
+    pub fn visit_preorder<'b, V>(&'b self, visitor: &mut V)
     where
-        V: PreorderVisitor<'a> + ?Sized,
+        V: PreorderVisitor<'b> + ?Sized,
     {
         match self {
             AnyNodeRef::ModModule(node) => node.visit_preorder(visitor),
@@ -5544,6 +5544,66 @@ impl AnyNodeRef<'_> {
             AnyNodeRef::ElifElseClause(node) => node.visit_preorder(visitor),
         }
     }
+
+    /// The last child of the last branch, if the node has multiple branches.
+    pub fn last_child_in_body(&self) -> Option<AnyNodeRef<'a>> {
+        let body = match self {
+            AnyNodeRef::StmtFunctionDef(ast::StmtFunctionDef { body, .. })
+            | AnyNodeRef::StmtClassDef(ast::StmtClassDef { body, .. })
+            | AnyNodeRef::StmtWith(ast::StmtWith { body, .. })
+            | AnyNodeRef::MatchCase(MatchCase { body, .. })
+            | AnyNodeRef::ExceptHandlerExceptHandler(ast::ExceptHandlerExceptHandler {
+                body,
+                ..
+            })
+            | AnyNodeRef::ElifElseClause(ast::ElifElseClause { body, .. }) => body,
+            AnyNodeRef::StmtIf(ast::StmtIf {
+                body,
+                elif_else_clauses,
+                ..
+            }) => elif_else_clauses.last().map_or(body, |clause| &clause.body),
+
+            AnyNodeRef::StmtFor(ast::StmtFor { body, orelse, .. })
+            | AnyNodeRef::StmtWhile(ast::StmtWhile { body, orelse, .. }) => {
+                if orelse.is_empty() {
+                    body
+                } else {
+                    orelse
+                }
+            }
+
+            AnyNodeRef::StmtMatch(ast::StmtMatch { cases, .. }) => {
+                return cases.last().map(AnyNodeRef::from);
+            }
+
+            AnyNodeRef::StmtTry(ast::StmtTry {
+                body,
+                handlers,
+                orelse,
+                finalbody,
+                ..
+            }) => {
+                if finalbody.is_empty() {
+                    if orelse.is_empty() {
+                        if handlers.is_empty() {
+                            body
+                        } else {
+                            return handlers.last().map(AnyNodeRef::from);
+                        }
+                    } else {
+                        orelse
+                    }
+                } else {
+                    finalbody
+                }
+            }
+
+            // Not a node that contains an indented child node.
+            _ => return None,
+        };
+
+        body.last().map(AnyNodeRef::from)
+    }
 }
 
 impl<'a> From<&'a ast::ModModule> for AnyNodeRef<'a> {
diff --git a/crates/ruff_python_formatter/resources/test/fixtures/ruff/newlines.py b/crates/ruff_python_formatter/resources/test/fixtures/ruff/newlines.py
index 0d33408ecbf4d..e684befc4bb3d 100644
--- a/crates/ruff_python_formatter/resources/test/fixtures/ruff/newlines.py
+++ b/crates/ruff_python_formatter/resources/test/fixtures/ruff/newlines.py
@@ -1,6 +1,7 @@
 ###
 # Blank lines around functions
 ###
+import sys
 
 x = 1
 
@@ -159,3 +160,97 @@ def f():
 # comment
 
 x = 1
+
+
+def f():
+    if True:
+
+        def double(s):
+            return s + s
+    print("below function")
+    if True:
+
+        class A:
+            x = 1
+    print("below class")
+    if True:
+
+        def double(s):
+            return s + s
+        #
+    print("below comment function")
+    if True:
+
+        class A:
+            x = 1
+        #
+    print("below comment class")
+    if True:
+
+        def double(s):
+            return s + s
+    #
+    print("below comment function 2")
+    if True:
+
+        def double(s):
+            return s + s
+            #
+    def outer():
+        def inner():
+            pass
+    print("below nested functions")
+
+if True:
+
+    def double(s):
+        return s + s
+print("below function")
+if True:
+
+    class A:
+        x = 1
+print("below class")
+def outer():
+    def inner():
+        pass
+print("below nested functions")
+
+
+class Path:
+    if sys.version_info >= (3, 11):
+        def joinpath(self): ...
+
+    # The .open method comes from pathlib.pyi and should be kept in sync.
+    @overload
+    def open(self): ...
+
+
+
+
+def fakehttp():
+
+    class FakeHTTPConnection:
+        if mock_close:
+            def close(self):
+                pass
+    FakeHTTPConnection.fakedata = fakedata
+
+
+
+
+
+if True:
+    if False:
+        def x():
+            def y():
+                pass
+        #comment
+    print()
+
+
+# NOTE: Please keep this the last block in this file. This tests that we don't insert
+# empty line(s) at the end of the file due to nested function
+if True:
+    def nested_trailing_function():
+        pass
\ No newline at end of file
diff --git a/crates/ruff_python_formatter/src/comments/placement.rs b/crates/ruff_python_formatter/src/comments/placement.rs
index 18e59ae1d42ac..e45312a1532ed 100644
--- a/crates/ruff_python_formatter/src/comments/placement.rs
+++ b/crates/ruff_python_formatter/src/comments/placement.rs
@@ -347,9 +347,9 @@ fn handle_end_of_line_comment_around_body<'a>(
     // ```
     // The first earlier branch filters out ambiguities e.g. around try-except-finally.
     if let Some(preceding) = comment.preceding_node() {
-        if let Some(last_child) = last_child_in_body(preceding) {
+        if let Some(last_child) = preceding.last_child_in_body() {
             let innermost_child =
-                std::iter::successors(Some(last_child), |parent| last_child_in_body(*parent))
+                std::iter::successors(Some(last_child), AnyNodeRef::last_child_in_body)
                     .last()
                     .unwrap_or(last_child);
             return CommentPlacement::trailing(innermost_child, comment);
@@ -670,7 +670,7 @@ fn handle_own_line_comment_after_branch<'a>(
     preceding: AnyNodeRef<'a>,
     locator: &Locator,
 ) -> CommentPlacement<'a> {
-    let Some(last_child) = last_child_in_body(preceding) else {
+    let Some(last_child) = preceding.last_child_in_body() else {
         return CommentPlacement::Default(comment);
     };
 
@@ -734,7 +734,7 @@ fn handle_own_line_comment_after_branch<'a>(
                 return CommentPlacement::trailing(last_child_in_parent, comment);
             }
             Ordering::Greater => {
-                if let Some(nested_child) = last_child_in_body(last_child_in_parent) {
+                if let Some(nested_child) = last_child_in_parent.last_child_in_body() {
                     // The comment belongs to the inner block.
                     parent = Some(last_child_in_parent);
                     last_child_in_parent = nested_child;
@@ -2176,65 +2176,6 @@ where
     right.is_some_and(|right| left.ptr_eq(right.into()))
 }
 
-/// The last child of the last branch, if the node has multiple branches.
-fn last_child_in_body(node: AnyNodeRef) -> Option<AnyNodeRef> {
-    let body = match node {
-        AnyNodeRef::StmtFunctionDef(ast::StmtFunctionDef { body, .. })
-        | AnyNodeRef::StmtClassDef(ast::StmtClassDef { body, .. })
-        | AnyNodeRef::StmtWith(ast::StmtWith { body, .. })
-        | AnyNodeRef::MatchCase(MatchCase { body, .. })
-        | AnyNodeRef::ExceptHandlerExceptHandler(ast::ExceptHandlerExceptHandler {
-            body, ..
-        })
-        | AnyNodeRef::ElifElseClause(ast::ElifElseClause { body, .. }) => body,
-        AnyNodeRef::StmtIf(ast::StmtIf {
-            body,
-            elif_else_clauses,
-            ..
-        }) => elif_else_clauses.last().map_or(body, |clause| &clause.body),
-
-        AnyNodeRef::StmtFor(ast::StmtFor { body, orelse, .. })
-        | AnyNodeRef::StmtWhile(ast::StmtWhile { body, orelse, .. }) => {
-            if orelse.is_empty() {
-                body
-            } else {
-                orelse
-            }
-        }
-
-        AnyNodeRef::StmtMatch(ast::StmtMatch { cases, .. }) => {
-            return cases.last().map(AnyNodeRef::from);
-        }
-
-        AnyNodeRef::StmtTry(ast::StmtTry {
-            body,
-            handlers,
-            orelse,
-            finalbody,
-            ..
-        }) => {
-            if finalbody.is_empty() {
-                if orelse.is_empty() {
-                    if handlers.is_empty() {
-                        body
-                    } else {
-                        return handlers.last().map(AnyNodeRef::from);
-                    }
-                } else {
-                    orelse
-                }
-            } else {
-                finalbody
-            }
-        }
-
-        // Not a node that contains an indented child node.
-        _ => return None,
-    };
-
-    body.last().map(AnyNodeRef::from)
-}
-
 /// Returns `true` if `statement` is the first statement in an alternate `body` (e.g. the else of an if statement)
 fn is_first_statement_in_alternate_body(statement: AnyNodeRef, has_body: AnyNodeRef) -> bool {
     match has_body {
diff --git a/crates/ruff_python_formatter/src/statement/suite.rs b/crates/ruff_python_formatter/src/statement/suite.rs
index 6e820104c6574..ea48cdf4088c7 100644
--- a/crates/ruff_python_formatter/src/statement/suite.rs
+++ b/crates/ruff_python_formatter/src/statement/suite.rs
@@ -155,13 +155,65 @@ impl FormatRule<Suite, PyFormatContext<'_>> for FormatSuite {
         while let Some(following) = iter.next() {
             let following_comments = comments.leading_dangling_trailing(following);
 
+            let needs_empty_lines = if is_class_or_function_definition(following) {
+                // Here we insert empty lines even if the preceding has a trailing own line comment
+                true
+            } else {
+                // Find nested class or function definitions that need an empty line after them.
+                //
+                // ```python
+                // def f():
+                //     if True:
+                //
+                //         def double(s):
+                //             return s + s
+                //
+                //     print("below function")
+                // ```
+                std::iter::successors(
+                    Some(AnyNodeRef::from(preceding)),
+                    AnyNodeRef::last_child_in_body,
+                )
+                .take_while(|last_child|
+                    // If there is a comment between preceding and following the empty lines were
+                    // inserted before the comment by preceding and there are no extra empty lines
+                    // after the comment.
+                    // ```python
+                    // class Test:
+                    //     def a(self):
+                    //         pass
+                    //         # trailing comment
+                    //
+                    //
+                    // # two lines before, one line after
+                    //
+                    // c = 30
+                    // ````
+                    // This also includes nested class/function definitions, so we stop recursing
+                    // once we see a node with a trailing own line comment:
+                    // ```python
+                    // def f():
+                    //     if True:
+                    //
+                    //         def double(s):
+                    //             return s + s
+                    //
+                    //         # nested trailing own line comment
+                    //     print("below function with trailing own line comment")
+                    // ```
+                    !comments.has_trailing_own_line(*last_child))
+                .any(|last_child| {
+                    matches!(
+                        last_child,
+                        AnyNodeRef::StmtFunctionDef(_) | AnyNodeRef::StmtClassDef(_)
+                    )
+                })
+            };
+
             // Add empty lines before and after a function or class definition. If the preceding
             // node is a function or class, and contains trailing comments, then the statement
             // itself will add the requisite empty lines when formatting its comments.
-            if (is_class_or_function_definition(preceding)
-                && !preceding_comments.has_trailing_own_line())
-                || is_class_or_function_definition(following)
-            {
+            if needs_empty_lines {
                 if source_type.is_stub() {
                     stub_file_empty_lines(
                         self.kind,
diff --git a/crates/ruff_python_formatter/tests/snapshots/black_compatibility@simple_cases__function2.py.snap b/crates/ruff_python_formatter/tests/snapshots/black_compatibility@simple_cases__function2.py.snap
index 2570ff4de030a..2d1ed7c6ad0d6 100644
--- a/crates/ruff_python_formatter/tests/snapshots/black_compatibility@simple_cases__function2.py.snap
+++ b/crates/ruff_python_formatter/tests/snapshots/black_compatibility@simple_cases__function2.py.snap
@@ -73,7 +73,7 @@ with hmm_but_this_should_get_two_preceding_newlines():
  elif os.name == "nt":
      try:
          import msvcrt
-@@ -54,12 +53,10 @@
+@@ -54,7 +53,6 @@
      class IHopeYouAreHavingALovelyDay:
          def __call__(self):
              print("i_should_be_followed_by_only_one_newline")
@@ -81,11 +81,6 @@ with hmm_but_this_should_get_two_preceding_newlines():
  else:
  
      def foo():
-         pass
--
- 
- with hmm_but_this_should_get_two_preceding_newlines():
-     pass
 ```
 
 ## Ruff Output
@@ -151,6 +146,7 @@ else:
     def foo():
         pass
 
+
 with hmm_but_this_should_get_two_preceding_newlines():
     pass
 ```
diff --git a/crates/ruff_python_formatter/tests/snapshots/format@newlines.py.snap b/crates/ruff_python_formatter/tests/snapshots/format@newlines.py.snap
index 654d55dbb9789..68f3674034ec5 100644
--- a/crates/ruff_python_formatter/tests/snapshots/format@newlines.py.snap
+++ b/crates/ruff_python_formatter/tests/snapshots/format@newlines.py.snap
@@ -7,6 +7,7 @@ input_file: crates/ruff_python_formatter/resources/test/fixtures/ruff/newlines.p
 ###
 # Blank lines around functions
 ###
+import sys
 
 x = 1
 
@@ -165,13 +166,107 @@ def f():
 # comment
 
 x = 1
-```
+
+
+def f():
+    if True:
+
+        def double(s):
+            return s + s
+    print("below function")
+    if True:
+
+        class A:
+            x = 1
+    print("below class")
+    if True:
+
+        def double(s):
+            return s + s
+        #
+    print("below comment function")
+    if True:
+
+        class A:
+            x = 1
+        #
+    print("below comment class")
+    if True:
+
+        def double(s):
+            return s + s
+    #
+    print("below comment function 2")
+    if True:
+
+        def double(s):
+            return s + s
+            #
+    def outer():
+        def inner():
+            pass
+    print("below nested functions")
+
+if True:
+
+    def double(s):
+        return s + s
+print("below function")
+if True:
+
+    class A:
+        x = 1
+print("below class")
+def outer():
+    def inner():
+        pass
+print("below nested functions")
+
+
+class Path:
+    if sys.version_info >= (3, 11):
+        def joinpath(self): ...
+
+    # The .open method comes from pathlib.pyi and should be kept in sync.
+    @overload
+    def open(self): ...
+
+
+
+
+def fakehttp():
+
+    class FakeHTTPConnection:
+        if mock_close:
+            def close(self):
+                pass
+    FakeHTTPConnection.fakedata = fakedata
+
+
+
+
+
+if True:
+    if False:
+        def x():
+            def y():
+                pass
+        #comment
+    print()
+
+
+# NOTE: Please keep this the last block in this file. This tests that we don't insert
+# empty line(s) at the end of the file due to nested function
+if True:
+    def nested_trailing_function():
+        pass```
 
 ## Output
 ```py
 ###
 # Blank lines around functions
 ###
+import sys
 
 x = 1
 
@@ -339,6 +434,118 @@ def f():
 # comment
 
 x = 1
+
+
+def f():
+    if True:
+
+        def double(s):
+            return s + s
+
+    print("below function")
+    if True:
+
+        class A:
+            x = 1
+
+    print("below class")
+    if True:
+
+        def double(s):
+            return s + s
+
+        #
+    print("below comment function")
+    if True:
+
+        class A:
+            x = 1
+
+        #
+    print("below comment class")
+    if True:
+
+        def double(s):
+            return s + s
+
+    #
+    print("below comment function 2")
+    if True:
+
+        def double(s):
+            return s + s
+            #
+
+    def outer():
+        def inner():
+            pass
+
+    print("below nested functions")
+
+
+if True:
+
+    def double(s):
+        return s + s
+
+
+print("below function")
+if True:
+
+    class A:
+        x = 1
+
+
+print("below class")
+
+
+def outer():
+    def inner():
+        pass
+
+
+print("below nested functions")
+
+
+class Path:
+    if sys.version_info >= (3, 11):
+
+        def joinpath(self):
+            ...
+
+    # The .open method comes from pathlib.pyi and should be kept in sync.
+    @overload
+    def open(self):
+        ...
+
+
+def fakehttp():
+    class FakeHTTPConnection:
+        if mock_close:
+
+            def close(self):
+                pass
+
+    FakeHTTPConnection.fakedata = fakedata
+
+
+if True:
+    if False:
+
+        def x():
+            def y():
+                pass
+
+        # comment
+    print()
+
+
+# NOTE: Please keep this the last block in this file. This tests that we don't insert
+# empty line(s) at the end of the file due to nested function
+if True:
+
+    def nested_trailing_function():
+        pass
 ```
 
 
diff --git a/crates/ruff_python_formatter/tests/snapshots/format@statement__if.py.snap b/crates/ruff_python_formatter/tests/snapshots/format@statement__if.py.snap
index 3795d7f03922f..c72aa5423766c 100644
--- a/crates/ruff_python_formatter/tests/snapshots/format@statement__if.py.snap
+++ b/crates/ruff_python_formatter/tests/snapshots/format@statement__if.py.snap
@@ -410,6 +410,7 @@ else:
         pass
         # 3
 
+
 if True:
     print("a")  # 1
 elif True:
diff --git a/crates/ruff_python_formatter/tests/snapshots/format@statement__try.py.snap b/crates/ruff_python_formatter/tests/snapshots/format@statement__try.py.snap
index e4fe04e4348cb..b3facb5640191 100644
--- a/crates/ruff_python_formatter/tests/snapshots/format@statement__try.py.snap
+++ b/crates/ruff_python_formatter/tests/snapshots/format@statement__try.py.snap
@@ -311,6 +311,7 @@ finally:
         pass
         # d
 
+
 try:
     pass  # a
 except ZeroDivisionError: