diff --git a/crates/ty_python_semantic/resources/mdtest/call/methods.md b/crates/ty_python_semantic/resources/mdtest/call/methods.md
index c15e14a615..c6adcbbbdc 100644
--- a/crates/ty_python_semantic/resources/mdtest/call/methods.md
+++ b/crates/ty_python_semantic/resources/mdtest/call/methods.md
@@ -464,6 +464,42 @@ reveal_type(C.f2(1))  # revealed: str
 reveal_type(C().f2(1))  # revealed: str
 ```
 
+### Classmethods with `Self` and callable-returning decorators
+
+When a classmethod is decorated with a decorator that returns a callable type (like
+`@contextmanager`), `Self` in the return type should correctly resolve to the subclass when accessed
+on a derived class.
+
+```py
+from contextlib import contextmanager
+from typing import Iterator
+from typing_extensions import Self
+
+class Base:
+    @classmethod
+    @contextmanager
+    def create(cls) -> Iterator[Self]:
+        yield cls()
+
+class Child(Base): ...
+
+reveal_type(Base.create())  # revealed: _GeneratorContextManager[Base, None, None]
+with Base.create() as base:
+    reveal_type(base)  # revealed: Base
+
+reveal_type(Base().create())  # revealed: _GeneratorContextManager[Base, None, None]
+with Base().create() as base:
+    reveal_type(base)  # revealed: Base
+
+reveal_type(Child.create())  # revealed: _GeneratorContextManager[Child, None, None]
+with Child.create() as child:
+    reveal_type(child)  # revealed: Child
+
+reveal_type(Child().create())  # revealed: _GeneratorContextManager[Child, None, None]
+with Child().create() as child:
+    reveal_type(child)  # revealed: Child
+```
+
 ### `__init_subclass__`
 
 The [`__init_subclass__`] method is implicitly a classmethod:
diff --git a/crates/ty_python_semantic/src/types.rs b/crates/ty_python_semantic/src/types.rs
index e923c4df48..4c37f17ba1 100644
--- a/crates/ty_python_semantic/src/types.rs
+++ b/crates/ty_python_semantic/src/types.rs
@@ -2645,8 +2645,15 @@ impl<'db> Type<'db> {
                 return if instance.is_none(db) && callable.is_function_like(db) {
                     Some((self, AttributeKind::NormalOrNonDataDescriptor))
                 } else {
+                    // For classmethod-like callables, bind to the owner class. For function-like callables, bind to the instance.
+                    let self_type = if callable.is_classmethod_like(db) && instance.is_none(db) {
+                        owner.to_instance(db).unwrap_or(owner)
+                    } else {
+                        instance
+                    };
+
                     Some((
-                        Type::Callable(callable.bind_self(db, Some(instance))),
+                        Type::Callable(callable.bind_self(db, Some(self_type))),
                         AttributeKind::NormalOrNonDataDescriptor,
                     ))
                 };