diff --git a/test_programs/compile_success_empty/lambda_call_assign_in_lambda/Nargo.toml b/test_programs/compile_success_empty/lambda_call_assign_in_lambda/Nargo.toml
new file mode 100644
index 00000000000..9579afe99ea
--- /dev/null
+++ b/test_programs/compile_success_empty/lambda_call_assign_in_lambda/Nargo.toml
@@ -0,0 +1,6 @@
+[package]
+name = "lambda_call_assign_in_lambda"
+type = "bin"
+authors = [""]
+
+[dependencies]
\ No newline at end of file
diff --git a/test_programs/compile_success_empty/lambda_call_assign_in_lambda/src/main.nr b/test_programs/compile_success_empty/lambda_call_assign_in_lambda/src/main.nr
new file mode 100644
index 00000000000..7999d1445bc
--- /dev/null
+++ b/test_programs/compile_success_empty/lambda_call_assign_in_lambda/src/main.nr
@@ -0,0 +1,23 @@
+// Regression for issue #5212 (https://github.com/noir-lang/noir/issues/5212)
+fn main() {
+    let lambda1 = || 1;
+
+    // Previous bug: Compiler panic when you create a variable in a lambda with another lambda call as its value
+    let _ = || { let _: u8 = lambda1(); };
+
+    // No panic if the variable is created before we assign its value as the lambda call
+    let _ = || {
+        let mut var3: u8 = 1;
+        var3 = lambda1();
+    };
+
+    // No panic with a function call that has the same behavior
+    let _ = || { let _: u8 = func(); };
+
+    // No panic outside a lambda code block
+    let _: u8 = lambda1();
+}
+
+fn func() -> u8 {
+    1
+}
diff --git a/tooling/nargo_cli/tests/snapshots/compile_success_empty/lambda_call_assign_in_lambda/execute__tests__expanded.snap b/tooling/nargo_cli/tests/snapshots/compile_success_empty/lambda_call_assign_in_lambda/execute__tests__expanded.snap
new file mode 100644
index 00000000000..b01a00e6b7b
--- /dev/null
+++ b/tooling/nargo_cli/tests/snapshots/compile_success_empty/lambda_call_assign_in_lambda/execute__tests__expanded.snap
@@ -0,0 +1,18 @@
+---
+source: tooling/nargo_cli/tests/execute.rs
+expression: expanded_code
+---
+fn main() {
+    let lambda1: fn() -> u8 = || -> u8 1;
+    let _: fn[(fn() -> u8,)]() = || { let _: u8 = lambda1(); };
+    let _: fn[(fn() -> u8,)]() = || {
+        let mut var3: u8 = 1;
+        var3 = lambda1();
+    };
+    let _: fn() = || { let _: u8 = func(); };
+    let _: u8 = lambda1();
+}
+
+fn func() -> u8 {
+    1
+}
diff --git a/tooling/nargo_cli/tests/snapshots/compile_success_empty/lambda_call_assign_in_lambda/execute__tests__force_brillig_false_inliner_0.snap b/tooling/nargo_cli/tests/snapshots/compile_success_empty/lambda_call_assign_in_lambda/execute__tests__force_brillig_false_inliner_0.snap
new file mode 100644
index 00000000000..7de940827c8
--- /dev/null
+++ b/tooling/nargo_cli/tests/snapshots/compile_success_empty/lambda_call_assign_in_lambda/execute__tests__force_brillig_false_inliner_0.snap
@@ -0,0 +1,26 @@
+---
+source: tooling/nargo_cli/tests/execute.rs
+expression: artifact
+---
+{
+  "noir_version": "[noir_version]",
+  "hash": "[hash]",
+  "abi": {
+    "parameters": [],
+    "return_type": null,
+    "error_types": {}
+  },
+  "bytecode": [
+    "func 0",
+    "current witness index : _0",
+    "private parameters indices : []",
+    "public parameters indices : []",
+    "return value indices : []"
+  ],
+  "debug_symbols": "XY5BCsQwCEXv4rqLWfcqw1BsaosgJtikMITefWyYQOlK/3/6tcJCc9km1jXuML4rzMYivE0SA2aO6m49B+hyykbkFty4byU00gyjFpEBDpTShvaE2mpGc/oagHTx6oErC13d+XGBge158UBjnIX+ci0abjR/Uyf942Qx0FKMrqTGPPsH",
+  "file_map": {},
+  "names": [
+    "main"
+  ],
+  "brillig_names": []
+}