diff --git a/crates/oxc_mangler/src/lib.rs b/crates/oxc_mangler/src/lib.rs
index e32f345e40e79..90e9a0ecd4924 100644
--- a/crates/oxc_mangler/src/lib.rs
+++ b/crates/oxc_mangler/src/lib.rs
@@ -299,11 +299,6 @@ impl<'t> Mangler<'t> {
 
         assert!(scoping.has_scope_child_ids(), "child_id needs to be generated");
 
-        // TODO: implement opt-out of direct-eval in a branch of scopes.
-        if scoping.root_scope_flags().contains_direct_eval() {
-            return;
-        }
-
         let (exported_names, exported_symbols) = if self.options.top_level {
             Mangler::collect_exported_symbols(program)
         } else {
@@ -333,6 +328,9 @@ impl<'t> Mangler<'t> {
             if bindings.is_empty() {
                 continue;
             }
+            if scoping.scope_flags(scope_id).contains_direct_eval() {
+                continue;
+            }
 
             // Sort `bindings` in declaration order.
             tmp_bindings.clear();
@@ -455,7 +453,12 @@ impl<'t> Mangler<'t> {
             let name = loop {
                 let name = generate_name(count);
                 count += 1;
-                // Do not mangle keywords and unresolved references
+                // Do not mangle keywords and unresolved references.
+                // Note: We don't need to exclude variable names from direct-eval-containing
+                // scopes because those scopes are skipped entirely during slot assignment
+                // (their variables keep original names). Mangled names only apply to scopes
+                // unaffected by eval, so there's no risk of shadowing variables that eval
+                // needs to access.
                 let n = name.as_str();
                 if !oxc_syntax::keyword::is_reserved_keyword(n)
                     && !is_special_name(n)
@@ -539,11 +542,15 @@ impl<'t> Mangler<'t> {
 
         for (symbol_id, slot) in slots.iter().copied().enumerate() {
             let symbol_id = SymbolId::from_usize(symbol_id);
-            if scoping.symbol_scope_id(symbol_id) == root_scope_id
+            let symbol_scope_id = scoping.symbol_scope_id(symbol_id);
+            if symbol_scope_id == root_scope_id
                 && (!self.options.top_level || exported_symbols.contains(&symbol_id))
             {
                 continue;
             }
+            if scoping.scope_flags(symbol_scope_id).contains_direct_eval() {
+                continue;
+            }
             if is_special_name(scoping.symbol_name(symbol_id)) {
                 continue;
             }
diff --git a/crates/oxc_minifier/tests/mangler/mod.rs b/crates/oxc_minifier/tests/mangler/mod.rs
index 6378ffb392cd3..8ca260812c90d 100644
--- a/crates/oxc_minifier/tests/mangler/mod.rs
+++ b/crates/oxc_minifier/tests/mangler/mod.rs
@@ -22,10 +22,38 @@ fn mangle(source_text: &str, options: MangleOptions) -> String {
 
 #[test]
 fn direct_eval() {
-    let source_text = "function foo() { let NO_MANGLE; eval('') }";
     let options = MangleOptions::default();
+
+    // Symbols in scopes with direct eval should NOT be mangled
+    let source_text = "function foo() { let NO_MANGLE; eval('') }";
     let mangled = mangle(source_text, options);
     assert_eq!(mangled, "function foo() {\n\tlet NO_MANGLE;\n\teval(\"\");\n}\n");
+
+    // Nested direct eval: parent scope also should not mangle
+    let source_text = "function foo() { let NO_MANGLE; function bar() { eval('') } }";
+    let mangled = mangle(source_text, options);
+    assert_eq!(
+        mangled,
+        "function foo() {\n\tlet NO_MANGLE;\n\tfunction bar() {\n\t\teval(\"\");\n\t}\n}\n"
+    );
+
+    // Sibling scope without direct eval should be mangled
+    let source_text =
+        "function foo() { let NO_MANGLE; eval('') } function bar() { let SHOULD_MANGLE; }";
+    let mangled = mangle(source_text, options);
+    // SHOULD_MANGLE gets mangled (to some short name), NO_MANGLE stays as is
+    assert!(mangled.contains("NO_MANGLE"));
+    assert!(!mangled.contains("SHOULD_MANGLE"));
+
+    // Child function scope without direct eval CAN be mangled (eval in parent cannot access child function locals)
+    let source_text = "function foo() { eval(''); function bar() { let CAN_MANGLE; } }";
+    let mangled = mangle(source_text, options);
+    assert!(!mangled.contains("CAN_MANGLE"));
+
+    // Indirect eval should still allow mangling
+    let source_text = "function foo() { let SHOULD_MANGLE; (0, eval)('') }";
+    let mangled = mangle(source_text, options);
+    assert!(!mangled.contains("SHOULD_MANGLE"));
 }
 
 #[test]