diff --git a/packages/babel-parser/src/parser/expression.js b/packages/babel-parser/src/parser/expression.js
index 5e9adfaddb18..c92bfd217e79 100644
--- a/packages/babel-parser/src/parser/expression.js
+++ b/packages/babel-parser/src/parser/expression.js
@@ -42,6 +42,7 @@ import {
 } from "../util/scopeflags";
 import {
   PARAM_AWAIT,
+  PARAM_RETURN,
   PARAM,
   functionFlags,
 } from "../util/production-parameter";
@@ -1967,7 +1968,11 @@ export default class ExpressionParser extends LValParser {
         allowExpression,
         !oldStrict && useStrict,
       );
+      // FunctionBody[Yield, Await]:
+      //   StatementList[?Yield, ?Await, +Return] opt
+      this.prodParam.enter(this.prodParam.currentFlags() | PARAM_RETURN);
       node.body = this.parseBlock(true, false);
+      this.prodParam.exit();
       this.state.labels = oldLabels;
     }
 
diff --git a/packages/babel-parser/src/parser/statement.js b/packages/babel-parser/src/parser/statement.js
index adc23de4cace..4708c583251a 100644
--- a/packages/babel-parser/src/parser/statement.js
+++ b/packages/babel-parser/src/parser/statement.js
@@ -569,7 +569,7 @@ export default class StatementParser extends ExpressionParser {
   }
 
   parseReturnStatement(node: N.ReturnStatement): N.ReturnStatement {
-    if (!this.scope.inFunction && !this.options.allowReturnOutsideFunction) {
+    if (!this.prodParam.hasReturn && !this.options.allowReturnOutsideFunction) {
       this.raise(this.state.start, "'return' outside of function");
     }
 
diff --git a/packages/babel-parser/src/util/production-parameter.js b/packages/babel-parser/src/util/production-parameter.js
index 9f468addc3d6..6460e8d35fda 100644
--- a/packages/babel-parser/src/util/production-parameter.js
+++ b/packages/babel-parser/src/util/production-parameter.js
@@ -1,7 +1,8 @@
 // @flow
-export const PARAM = 0b00, // Initial Parameter flags
-  PARAM_YIELD = 0b01, // track [Await] production parameter
-  PARAM_AWAIT = 0b10; // track [Yield] production parameter
+export const PARAM = 0b000, // Initial Parameter flags
+  PARAM_YIELD = 0b001, // track [Yield] production parameter
+  PARAM_AWAIT = 0b010, // track [Await] production parameter
+  PARAM_RETURN = 0b100; // track [Return] production parameter
 
 // ProductionParameterHandler is a stack fashioned production parameter tracker
 // https://tc39.es/ecma262/#sec-grammar-notation
@@ -48,6 +49,10 @@ export default class ProductionParameterHandler {
   get hasYield(): boolean {
     return (this.currentFlags() & PARAM_YIELD) > 0;
   }
+
+  get hasReturn(): boolean {
+    return (this.currentFlags() & PARAM_RETURN) > 0;
+  }
 }
 
 export function functionFlags(