diff --git a/crates/ruff_linter/resources/test/fixtures/pyflakes/F821_34.py b/crates/ruff_linter/resources/test/fixtures/pyflakes/F821_34.py
new file mode 100644
index 0000000000..9ebd9ba16e
--- /dev/null
+++ b/crates/ruff_linter/resources/test/fixtures/pyflakes/F821_34.py
@@ -0,0 +1,27 @@
+from __future__ import annotations
+
+from typing import Callable
+
+
+def demonstrate_bare_local_annotation():
+    x: int
+    print(x)
+
+demonstrate_bare_local_annotation()
+
+
+def make_closure_pair() -> tuple[Callable[[], int], Callable[[int], None]]:
+    x: int
+
+    def get_value() -> int:
+        return x
+
+    def set_value(new_value: int) -> None:
+        nonlocal x
+        x = new_value
+
+    return get_value, set_value
+
+get_value, set_value = make_closure_pair()
+set_value(123)
+print(get_value())
diff --git a/crates/ruff_linter/src/rules/pyflakes/mod.rs b/crates/ruff_linter/src/rules/pyflakes/mod.rs
index 02cd5158a8..91f0de6a1f 100644
--- a/crates/ruff_linter/src/rules/pyflakes/mod.rs
+++ b/crates/ruff_linter/src/rules/pyflakes/mod.rs
@@ -168,6 +168,7 @@ mod tests {
     #[test_case(Rule::UndefinedName, Path::new("F821_31.py"))]
     #[test_case(Rule::UndefinedName, Path::new("F821_32.pyi"))]
     #[test_case(Rule::UndefinedName, Path::new("F821_33.py"))]
+    #[test_case(Rule::UndefinedName, Path::new("F821_34.py"))]
     #[test_case(Rule::UndefinedExport, Path::new("F822_0.py"))]
     #[test_case(Rule::UndefinedExport, Path::new("F822_0.pyi"))]
     #[test_case(Rule::UndefinedExport, Path::new("F822_1.py"))]
@@ -3667,7 +3668,7 @@ lambda: fu
             name: str
             print(name)
         ",
-            &[Rule::UndefinedName],
+            &[],
         );
         flakes(
             r"
diff --git a/crates/ruff_linter/src/rules/pyflakes/snapshots/ruff_linter__rules__pyflakes__tests__F821_F821_34.py.snap b/crates/ruff_linter/src/rules/pyflakes/snapshots/ruff_linter__rules__pyflakes__tests__F821_F821_34.py.snap
new file mode 100644
index 0000000000..d0b409f39e
--- /dev/null
+++ b/crates/ruff_linter/src/rules/pyflakes/snapshots/ruff_linter__rules__pyflakes__tests__F821_F821_34.py.snap
@@ -0,0 +1,4 @@
+---
+source: crates/ruff_linter/src/rules/pyflakes/mod.rs
+---
+
diff --git a/crates/ruff_python_semantic/src/model.rs b/crates/ruff_python_semantic/src/model.rs
index 78536071d7..3c15688916 100644
--- a/crates/ruff_python_semantic/src/model.rs
+++ b/crates/ruff_python_semantic/src/model.rs
@@ -476,9 +476,19 @@ impl<'a> SemanticModel<'a> {
                     // The `name` in `print(name)` should be treated as unresolved, but the `name` in
                     // `name: str` should be treated as used.
                     //
-                    // Stub files are an exception. In a stub file, it _is_ considered valid to
-                    // resolve to a type annotation.
-                    BindingKind::Annotation if !self.in_stub_file() => continue,
+                    // There are two exceptions to this rule:
+                    // 1. Stub files. In a stub file, it _is_ considered valid to resolve to a
+                    //    type annotation.
+                    // 2. Bare annotations inside functions. Per PEP 526, these create local
+                    //    variables.
+                    BindingKind::Annotation
+                        if !self.in_stub_file()
+                            && !self.scopes[self.bindings[binding_id].scope]
+                                .kind
+                                .is_function() =>
+                    {
+                        continue;
+                    }
 
                     // If it's a deletion, don't treat it as resolved, since the name is now
                     // unbound. For example, given: