diff --git a/src/Features/CSharpTest/EditAndContinue/TopLevelEditingTests.cs b/src/Features/CSharpTest/EditAndContinue/TopLevelEditingTests.cs
index 4282d9364c4b7..e063b2f2825b0 100644
--- a/src/Features/CSharpTest/EditAndContinue/TopLevelEditingTests.cs
+++ b/src/Features/CSharpTest/EditAndContinue/TopLevelEditingTests.cs
@@ -2707,8 +2707,12 @@ public void Type_DeleteInsert_Reloadable()
     {
         var srcA1 = ReloadableAttributeSrc + "[CreateNewOnMetadataUpdate]class C { void F() {} }";
         var srcA2 = ReloadableAttributeSrc;
+
+        var srcB1 = "";
+        var srcB2 = "using System.Runtime.CompilerServices; [CreateNewOnMetadataUpdate]class C { void F() {} }";
+
         EditAndContinueValidation.VerifySemantics(
-            [GetTopEdits(srcA1, srcA2), GetTopEdits("", "[CreateNewOnMetadataUpdate]class C { void F() {} }")],
+            [GetTopEdits(srcA1, srcA2), GetTopEdits(srcB1, srcB2)],
             [
                 DocumentResults(),
                 DocumentResults(
@@ -5408,7 +5412,7 @@ public void NestedType_Replace_WithUpdateInNestedType_Partial_DifferentDocument(
                 ]),
                 DocumentResults(semanticEdits:
                 [
-                    SemanticEdit(SemanticEditKind.Update, c => c.GetMember("C.D.M"))
+                    SemanticEdit(SemanticEditKind.Replace, c => c.GetMember("C"), partialType: "C")
                 ])
             ],
             capabilities: EditAndContinueCapabilities.NewTypeDefinition);
@@ -5427,7 +5431,6 @@ public void NestedType_Replace_WithUpdateInNestedType_Partial_SameDocument()
             semanticEdits:
             [
                 SemanticEdit(SemanticEditKind.Replace, c => c.GetMember("C")),
-                SemanticEdit(SemanticEditKind.Update, c => c.GetMember("C.D.M"))
             ],
             capabilities: EditAndContinueCapabilities.NewTypeDefinition);
     }
@@ -5444,8 +5447,7 @@ public void NestedType_Replace_WithUpdateInNestedType()
             edits,
             semanticEdits:
             [
-                SemanticEdit(SemanticEditKind.Replace, c => c.GetMember("C")),
-                SemanticEdit(SemanticEditKind.Update, c => c.GetMember("C.D.M"))
+                SemanticEdit(SemanticEditKind.Replace, c => c.GetMember("C"))
             ],
             capabilities: EditAndContinueCapabilities.NewTypeDefinition);
     }
@@ -5875,6 +5877,36 @@ public void NestedType_ClassDeleteInsert()
              Diagnostic(RudeEditKind.Move, "public class X", FeaturesResources.class_));
     }
 
+    /// <summary>
+    /// Scenario: Razor page types are marked with CreateNewOnMetadataUpdateAttribute.
+    /// It is possible to define nested types via <c>@functions</c> block and any changes to this block should be allowed.
+    /// </summary>
+    [Fact, WorkItem("https://github.com/dotnet/roslyn/issues/76989")]
+    public void NestedType_Enum_Update()
+    {
+        var src1 = ReloadableAttributeSrc + "[CreateNewOnMetadataUpdate]class C { enum E { A } }";
+        var src2 = ReloadableAttributeSrc + "[CreateNewOnMetadataUpdate]class C { enum E { A, B } }";
+
+        var edits = GetTopEdits(src1, src2);
+
+        edits.VerifySemantics(
+            semanticEdits: [SemanticEdit(SemanticEditKind.Replace, c => c.GetMember("C"))],
+            capabilities: EditAndContinueCapabilities.NewTypeDefinition);
+    }
+
+    [Fact, WorkItem("https://github.com/dotnet/roslyn/issues/76989")]
+    public void NestedType_Rename_Reloadable()
+    {
+        var src1 = ReloadableAttributeSrc + "[CreateNewOnMetadataUpdate]class C { class D1 { public void F() { Console.WriteLine(1); }}; }";
+        var src2 = ReloadableAttributeSrc + "[CreateNewOnMetadataUpdate]class C { class D2 { public void F() { Console.WriteLine(2); }}; }";
+
+        var edits = GetTopEdits(src1, src2);
+
+        edits.VerifySemantics(
+            semanticEdits: [SemanticEdit(SemanticEditKind.Replace, c => c.GetMember("C"))],
+            capabilities: EditAndContinueCapabilities.NewTypeDefinition);
+    }
+
     /// <summary>
     /// A new generic type can be added whether it's nested and inherits generic parameters from the containing type, or top-level.
     /// </summary>
diff --git a/src/Features/Core/Portable/EditAndContinue/AbstractEditAndContinueAnalyzer.cs b/src/Features/Core/Portable/EditAndContinue/AbstractEditAndContinueAnalyzer.cs
index d781f651a7624..add507817b28b 100644
--- a/src/Features/Core/Portable/EditAndContinue/AbstractEditAndContinueAnalyzer.cs
+++ b/src/Features/Core/Portable/EditAndContinue/AbstractEditAndContinueAnalyzer.cs
@@ -2815,6 +2815,18 @@ private async Task<ImmutableArray<SemanticEditInfo>> AnalyzeSemanticsAsync(
                         // Delete/insert/update edit of a member of a reloadable type (including nested types) results in Replace edit of the containing type.
                         // If a Delete edit is part of delete-insert operation (member moved to a different partial type declaration or to a different file)
                         // skip producing Replace semantic edit for this Delete edit as one will be reported by the corresponding Insert edit.
+                        //
+                        // Updates to types nested into reloadable type are handled as Replace edits of the reloadable type.
+                        //
+                        // Rationale:
+                        //   Any update to a member of a reloadable type results is a Replace edit of the type.
+                        //   Replace edit generates a new version of the entire reloadable type, including any types nested into it.
+                        //   Therefore, updating members results in new versions of all types nested in the reloadable type.
+                        //   It would be unnecessarily limiting and inconsistent to update nested types "in-place".
+                        //
+                        // Scenario:
+                        //   Razor page, which is a reloadable type, may define nested types using @functions block.
+                        //   Any changes should be allowed to be made in a Razor page, including changes to nested types defined in @functions block.
 
                         var oldContainingType = oldSymbol?.ContainingType;
                         var newContainingType = newSymbol?.ContainingType;
@@ -2826,28 +2838,27 @@ private async Task<ImmutableArray<SemanticEditInfo>> AnalyzeSemanticsAsync(
                             oldContainingType ??= (INamedTypeSymbol?)containingTypeSymbolKey.Resolve(oldModel.Compilation, cancellationToken: cancellationToken).Symbol;
                             newContainingType ??= (INamedTypeSymbol?)containingTypeSymbolKey.Resolve(newModel.Compilation, cancellationToken: cancellationToken).Symbol;
 
-                            if (oldContainingType != null && newContainingType != null && IsReloadable(oldContainingType))
+                            if (AddReloadableTypeSemanticEdit(
+                                editScript,
+                                newModel,
+                                diagnostics,
+                                capabilities,
+                                processedSymbols,
+                                semanticEdits,
+                                oldTree,
+                                newTree,
+                                newDeclaration,
+                                oldContainingType,
+                                newContainingType,
+                                cancellationToken))
                             {
-                                if (processedSymbols.Add(newContainingType))
-                                {
-                                    if (capabilities.GrantNewTypeDefinition(containingType))
-                                    {
-                                        semanticEdits.Add(SemanticEditInfo.CreateReplace(containingTypeSymbolKey,
-                                            IsPartialTypeEdit(oldContainingType, newContainingType, oldTree, newTree) ? containingTypeSymbolKey : null));
-                                    }
-                                    else
-                                    {
-                                        CreateDiagnosticContext(diagnostics, oldContainingType, newContainingType, newDeclaration, newModel, editScript.Match).
-                                            Report(RudeEditKind.ChangingReloadableTypeNotSupportedByRuntime, cancellationToken);
-                                    }
-                                }
-
                                 continue;
                             }
                         }
 
+                        // Handle changes to reloadable type itself (the above handles changes to its members and types).
                         // Deleting a reloadable type is a rude edit, reported the same as for non-reloadable.
-                        // Adding a reloadable type is a standard type addition (TODO: unless added to a reloadable type?).
+                        // Adding a reloadable type is a standard type addition (unless added to a reloadable type).
                         // Making reloadable attribute non-reloadable results in a new version of the type that is
                         // not reloadable but does not update the old version in-place.
                         if (syntacticEditKind != EditKind.Delete && oldSymbol is INamedTypeSymbol oldType && newSymbol is INamedTypeSymbol newType && IsReloadable(oldType))
@@ -3507,23 +3518,20 @@ IFieldSymbol or
 
                     var oldContainingType = oldSymbol.ContainingType;
                     var newContainingType = newSymbol.ContainingType;
-                    if (oldContainingType != null && newContainingType != null && IsReloadable(oldContainingType))
+                    if (AddReloadableTypeSemanticEdit(
+                        editScript,
+                        newModel,
+                        diagnostics,
+                        capabilities,
+                        processedSymbols,
+                        semanticEdits,
+                        oldTree,
+                        newTree,
+                        newDeclaration,
+                        oldContainingType,
+                        newContainingType,
+                        cancellationToken))
                     {
-                        if (processedSymbols.Add(newContainingType))
-                        {
-                            if (capabilities.GrantNewTypeDefinition(newContainingType))
-                            {
-                                var oldContainingTypeKey = SymbolKey.Create(oldContainingType, cancellationToken);
-                                semanticEdits.Add(SemanticEditInfo.CreateReplace(oldContainingTypeKey,
-                                    IsPartialTypeEdit(oldContainingType, newContainingType, oldTree, newTree) ? oldContainingTypeKey : null));
-                            }
-                            else
-                            {
-                                CreateDiagnosticContext(diagnostics, oldContainingType, newContainingType, newDeclaration, newModel, editScript.Match)
-                                    .Report(RudeEditKind.ChangingReloadableTypeNotSupportedByRuntime, cancellationToken);
-                            }
-                        }
-
                         continue;
                     }
 
@@ -4148,6 +4156,49 @@ private static bool HasRestartRequiredAttribute(ISymbol symbol)
     private static bool IsReloadable(INamedTypeSymbol type)
         => TypeOrBaseTypeHasCompilerServicesAttribute(type, CreateNewOnMetadataUpdateAttributeName);
 
+    private static INamedTypeSymbol? TryGetOutermostReloadableType(INamedTypeSymbol type)
+        => type.GetContainingTypesAndThis().FirstOrDefault(IsReloadable);
+
+    private bool AddReloadableTypeSemanticEdit(
+        EditScript<SyntaxNode> editScript,
+        DocumentSemanticModel newModel,
+        RudeEditDiagnosticsBuilder diagnostics,
+        EditAndContinueCapabilitiesGrantor capabilities,
+        PooledHashSet<ISymbol> processedSymbols,
+        ArrayBuilder<SemanticEditInfo> semanticEdits,
+        SyntaxTree oldTree,
+        SyntaxTree newTree,
+        SyntaxNode? newDeclaration,
+        INamedTypeSymbol? oldContainingType,
+        INamedTypeSymbol? newContainingType,
+        CancellationToken cancellationToken)
+    {
+        if (oldContainingType is null ||
+            newContainingType is null ||
+            TryGetOutermostReloadableType(oldContainingType) is not { } oldOutermostReloadableType ||
+            TryGetOutermostReloadableType(newContainingType) is not { } newOutermostReloadableType)
+        {
+            return false;
+        }
+
+        if (processedSymbols.Add(newOutermostReloadableType))
+        {
+            if (capabilities.GrantNewTypeDefinition(newOutermostReloadableType))
+            {
+                var oldOutermostReloadableTypeKey = SymbolKey.Create(oldOutermostReloadableType, cancellationToken);
+                semanticEdits.Add(SemanticEditInfo.CreateReplace(oldOutermostReloadableTypeKey,
+                    IsPartialTypeEdit(oldOutermostReloadableType, newOutermostReloadableType, oldTree, newTree) ? oldOutermostReloadableTypeKey : null));
+            }
+            else
+            {
+                CreateDiagnosticContext(diagnostics, oldOutermostReloadableType, newOutermostReloadableType, newDeclaration, newModel, editScript.Match).
+                    Report(RudeEditKind.ChangingReloadableTypeNotSupportedByRuntime, cancellationToken);
+            }
+        }
+
+        return true;
+    }
+
     private static bool TypeOrBaseTypeHasCompilerServicesAttribute(INamedTypeSymbol type, string attributeName)
     {
         var current = type;
diff --git a/src/Features/VisualBasicTest/EditAndContinue/TopLevelEditingTests.vb b/src/Features/VisualBasicTest/EditAndContinue/TopLevelEditingTests.vb
index 6d5344244252e..60324fc815a46 100644
--- a/src/Features/VisualBasicTest/EditAndContinue/TopLevelEditingTests.vb
+++ b/src/Features/VisualBasicTest/EditAndContinue/TopLevelEditingTests.vb
@@ -1726,6 +1726,8 @@ End Class
 
             Dim srcA2 = ReloadableAttributeSrc
             Dim srcB2 = "
+Imports System.Runtime.CompilerServices
+
 <CreateNewOnMetadataUpdate>
 Class C
   Sub F()
diff --git a/src/Workspaces/SharedUtilitiesAndExtensions/Compiler/Extensions/Symbols/INamedTypeSymbolExtensions.cs b/src/Workspaces/SharedUtilitiesAndExtensions/Compiler/Extensions/Symbols/INamedTypeSymbolExtensions.cs
index 44270c933b55e..f539d52b2ade5 100644
--- a/src/Workspaces/SharedUtilitiesAndExtensions/Compiler/Extensions/Symbols/INamedTypeSymbolExtensions.cs
+++ b/src/Workspaces/SharedUtilitiesAndExtensions/Compiler/Extensions/Symbols/INamedTypeSymbolExtensions.cs
@@ -30,6 +30,16 @@ public static IEnumerable<INamedTypeSymbol> GetBaseTypesAndThis(this INamedTypeS
         }
     }
 
+    public static IEnumerable<INamedTypeSymbol> GetContainingTypesAndThis(this INamedTypeSymbol? namedType)
+    {
+        var current = namedType;
+        while (current != null)
+        {
+            yield return current;
+            current = current.ContainingType;
+        }
+    }
+
     public static ImmutableArray<ITypeParameterSymbol> GetAllTypeParameters(this INamedTypeSymbol? symbol)
     {
         var stack = GetContainmentStack(symbol);