diff --git a/rewrite-java-test/src/test/java/org/openrewrite/java/JavaTemplateAnnotationTest.java b/rewrite-java-test/src/test/java/org/openrewrite/java/JavaTemplateAnnotationTest.java
index 6629eea4490..9b174dd6307 100644
--- a/rewrite-java-test/src/test/java/org/openrewrite/java/JavaTemplateAnnotationTest.java
+++ b/rewrite-java-test/src/test/java/org/openrewrite/java/JavaTemplateAnnotationTest.java
@@ -33,7 +33,7 @@ class JavaTemplateAnnotationTest implements RewriteTest {
 
     @DocumentExample
     @Test
-    void replaceAnnotation() {
+    void replaceClassAnnotation() {
         rewriteRun(
           spec -> spec.expectedCyclesThatMakeChanges(2)
             .recipe(toRecipe(() -> new JavaVisitor<>() {
@@ -49,7 +49,7 @@ public J visitAnnotation(J.Annotation annotation, ExecutionContext executionCont
               @Deprecated(since = "1.0", forRemoval = true)
               class A {
               }
-                """,
+              """,
             """
               @Deprecated(since = "2.0", forRemoval = true)
               class A {
@@ -59,6 +59,37 @@ class A {
         );
     }
 
+    @Test
+    void replaceNestedClassAnnotation() {
+        rewriteRun(
+          spec -> spec.expectedCyclesThatMakeChanges(2)
+            .recipe(toRecipe(() -> new JavaVisitor<>() {
+                  @Override
+                  public J visitAnnotation(J.Annotation annotation, ExecutionContext executionContext) {
+                      return JavaTemplate.apply("@Deprecated(since = \"#{}\", forRemoval = true)",
+                        getCursor(), annotation.getCoordinates().replace(), "2.0");
+                  }
+              }
+            )),
+          java(
+            """
+              class A {
+                  @Deprecated(since = "1.0", forRemoval = true)
+                  class B {
+                  }
+              }
+              """,
+            """
+              class A {
+                  @Deprecated(since = "2.0", forRemoval = true)
+                  class B {
+                  }
+              }
+              """
+          )
+        );
+    }
+
     @ExpectedToFail
     @Test
     void replaceAnnotation2() {
diff --git a/rewrite-java/src/main/java/org/openrewrite/java/internal/template/AnnotationTemplateGenerator.java b/rewrite-java/src/main/java/org/openrewrite/java/internal/template/AnnotationTemplateGenerator.java
index 45f9083bb2a..7470f0ecaef 100644
--- a/rewrite-java/src/main/java/org/openrewrite/java/internal/template/AnnotationTemplateGenerator.java
+++ b/rewrite-java/src/main/java/org/openrewrite/java/internal/template/AnnotationTemplateGenerator.java
@@ -22,6 +22,7 @@
 import org.openrewrite.Cursor;
 import org.openrewrite.internal.ListUtils;
 import org.openrewrite.java.JavaIsoVisitor;
+import org.openrewrite.java.service.AnnotationService;
 import org.openrewrite.java.tree.*;
 
 import java.util.ArrayList;
@@ -117,7 +118,7 @@ public J.Annotation visitAnnotation(J.Annotation annotation, Integer integer) {
 
     private void template(Cursor cursor, J prior, StringBuilder before, StringBuilder after, Set<J> templated) {
         templated.add(cursor.getValue());
-        J j = cursor.getValue();
+        final J j = cursor.getValue();
         if (j instanceof JavaSourceFile) {
             JavaSourceFile cu = (JavaSourceFile) j;
             for (J.Import anImport : cu.getImports()) {
@@ -132,16 +133,14 @@ private void template(Cursor cursor, J prior, StringBuilder before, StringBuilde
             }
             List<J.ClassDeclaration> classes = cu.getClasses();
             if (!classes.get(classes.size() - 1).getName().getSimpleName().equals("$Placeholder")) {
-                after.append("@interface $Placeholder {}");
+                after.append("\n@interface $Placeholder {}");
             }
             return;
-        }
-        if (j instanceof J.Block) {
+        } else if (j instanceof J.ClassDeclaration) {
+            classDeclaration(before, after, (J.ClassDeclaration) j, templated, cursor, prior);
+        } else if (j instanceof J.Block) {
             J parent = next(cursor).getValue();
-            if (parent instanceof J.ClassDeclaration) {
-                classDeclaration(before, (J.ClassDeclaration) parent, templated, cursor);
-                after.append('}');
-            } else if (parent instanceof J.MethodDeclaration) {
+            if (parent instanceof J.MethodDeclaration) {
                 J.MethodDeclaration m = (J.MethodDeclaration) parent;
 
                 // variable declarations up to the point of insertion
@@ -200,29 +199,46 @@ private void template(Cursor cursor, J prior, StringBuilder before, StringBuilde
         template(next(cursor), j, before, after, templated);
     }
 
-    private void classDeclaration(StringBuilder before, J.ClassDeclaration parent, Set<J> templated, Cursor cursor) {
+    private void classDeclaration(StringBuilder before, StringBuilder after, J.ClassDeclaration parent, Set<J> templated, Cursor cursor, J prior) {
         J.ClassDeclaration c = parent;
-        for (Statement statement : c.getBody().getStatements()) {
-            if (templated.contains(statement)) {
-                continue;
-            }
+        boolean annotated = isAnnotated(cursor, prior);
+        if (!annotated) {
+            for (Statement statement : c.getBody().getStatements()) {
+                if (templated.contains(statement)) {
+                    continue;
+                }
 
-            if (statement instanceof J.VariableDeclarations) {
-                J.VariableDeclarations v = (J.VariableDeclarations) statement;
-                if (v.hasModifier(J.Modifier.Type.Final) && v.hasModifier(J.Modifier.Type.Static)) {
-                    before.insert(0, variable((J.VariableDeclarations) statement, cursor) + ";\n");
+                if (statement instanceof J.VariableDeclarations) {
+                    J.VariableDeclarations v = (J.VariableDeclarations) statement;
+                    if (v.hasModifier(J.Modifier.Type.Final) && v.hasModifier(J.Modifier.Type.Static)) {
+                        before.insert(0, variable((J.VariableDeclarations) statement, cursor) + ";\n");
+                    }
+                } else if (statement instanceof J.ClassDeclaration) {
+                    // this is a sibling class. we need declarations for all variables and methods.
+                    // setting prior to null will cause them all to be written.
+                    before.insert(0, '}');
+                    classDeclaration(before, after, (J.ClassDeclaration) statement, templated, cursor, prior);
                 }
-            } else if (statement instanceof J.ClassDeclaration) {
-                // this is a sibling class. we need declarations for all variables and methods.
-                // setting prior to null will cause them all to be written.
-                before.insert(0, '}');
-                classDeclaration(before, (J.ClassDeclaration) statement, templated, cursor);
             }
         }
         c = c.withBody(J.Block.createEmptyBlock()).withLeadingAnnotations(null).withPrefix(Space.EMPTY);
         String printed = c.printTrimmed(cursor);
         int braceIndex = printed.lastIndexOf('{');
-        before.insert(0, braceIndex == -1 ? printed + '{' : printed.substring(0, braceIndex + 1));
+        if (annotated) {
+            after.append(braceIndex == -1 ? printed + '{' : printed.substring(0, braceIndex + 1));
+        } else {
+            before.insert(0, braceIndex == -1 ? printed + '{' : printed.substring(0, braceIndex + 1));
+        }
+        after.append('}');
+    }
+
+    private static boolean isAnnotated(Cursor cursor, J maybeAnnotation) {
+        if (!(maybeAnnotation instanceof J.Annotation)) {
+            return false;
+        }
+        Cursor sourceFileCursor = cursor.dropParentUntil(is -> is instanceof JavaSourceFile);
+        AnnotationService annotationService = sourceFileCursor.<JavaSourceFile>getValue().service(AnnotationService.class);
+        return annotationService.getAllAnnotations(cursor).contains(maybeAnnotation);
     }
 
     private String variable(J.VariableDeclarations variable, Cursor cursor) {