diff --git a/CHANGELOG.md b/CHANGELOG.md
index aa2e0339c087..0f7bec3c5430 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,7 @@
 ## Unreleased
 
 * Fix `bind:this` to the value of an `{#each}` block ([#4517](https://github.com/sveltejs/svelte/issues/4517))
+* Fix reactivity when assigning to contextual `{#each}` variable ([#4574](https://github.com/sveltejs/svelte/issues/4574), [#4744](https://github.com/sveltejs/svelte/issues/4744))
 * Fix binding to contextual `{#each}` values that shadow outer names ([#4757](https://github.com/sveltejs/svelte/issues/4757))
 
 ## 3.23.0
diff --git a/src/compiler/compile/nodes/shared/Expression.ts b/src/compiler/compile/nodes/shared/Expression.ts
index 2f2541c7200e..f7c9897d586c 100644
--- a/src/compiler/compile/nodes/shared/Expression.ts
+++ b/src/compiler/compile/nodes/shared/Expression.ts
@@ -14,6 +14,8 @@ import { invalidate } from '../../render_dom/invalidate';
 import { Node, FunctionExpression, Identifier } from 'estree';
 import { TemplateNode } from '../../../interfaces';
 import { is_reserved_keyword } from '../../utils/reserved_keywords';
+import replace_object from '../../utils/replace_object';
+import EachBlock from '../EachBlock';
 
 type Owner = Wrapper | TemplateNode;
 
@@ -134,6 +136,8 @@ export default class Expression {
 								const variable = component.var_lookup.get(name);
 								if (variable) variable[deep ? 'mutated' : 'reassigned'] = true;
 							});
+							const each_block = template_scope.get_owner(name);
+							(each_block as EachBlock).has_binding = true;
 						} else {
 							component.add_reference(name);
 
@@ -311,6 +315,10 @@ export default class Expression {
 				if (node.type === 'AssignmentExpression' || node.type === 'UpdateExpression') {
 					const assignee = node.type === 'AssignmentExpression' ? node.left : node.argument;
 
+					const object_name = get_object(assignee).name;
+
+					if (scope.has(object_name)) return;
+
 					// normally (`a = 1`, `b.c = 2`), there'll be a single name
 					// (a or b). In destructuring cases (`[d, e] = [e, d]`) there
 					// may be more, in which case we need to tack the extra ones
@@ -327,6 +335,23 @@ export default class Expression {
 						}
 					});
 
+					const context = block.bindings.get(object_name);
+
+					if (context) {
+						// for `{#each array as item}`
+						// replace `item = 1` to `each_array[each_index] = 1`, this allow us to mutate the array
+						// rather than mutating the local `item` variable
+						const { snippet, object, property } = context;
+						const replaced: any = replace_object(assignee, snippet);
+						if (node.type === 'AssignmentExpression') {
+							node.left = replaced;
+						} else {
+							node.argument = replaced;
+						}
+						contextual_dependencies.add(object.name);
+						contextual_dependencies.add(property.name);
+					}
+
 					this.replace(invalidate(block.renderer, scope, node, traced));
 				}
 			}
diff --git a/test/runtime/samples/each-blocks-assignment-2/_config.js b/test/runtime/samples/each-blocks-assignment-2/_config.js
new file mode 100644
index 000000000000..e5fe84ea7ced
--- /dev/null
+++ b/test/runtime/samples/each-blocks-assignment-2/_config.js
@@ -0,0 +1,20 @@
+export default {
+	html: `
+		<span class="content">foo</span>
+		<button>Test</button>
+	`,
+	async test({ assert, component, target, window }) {
+		const button = target.querySelector("button");
+
+		const clickEvent = new window.MouseEvent("click");
+		await button.dispatchEvent(clickEvent);
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+			<span class="content">bar</span>
+			<button>Test</button>
+		`
+		);
+	},
+};
diff --git a/test/runtime/samples/each-blocks-assignment-2/main.svelte b/test/runtime/samples/each-blocks-assignment-2/main.svelte
new file mode 100644
index 000000000000..5ef3ae83acc3
--- /dev/null
+++ b/test/runtime/samples/each-blocks-assignment-2/main.svelte
@@ -0,0 +1,12 @@
+<script>
+  let obj = {
+    prop: "foo"
+  };
+
+  let arr = [obj]
+</script>
+
+{#each arr as o}
+  <span class="content">{o.prop}</span>
+  <button on:click={ () => o = { ...o, prop: "bar" } }>Test</button>
+{/each}
\ No newline at end of file
diff --git a/test/runtime/samples/each-blocks-assignment/_config.js b/test/runtime/samples/each-blocks-assignment/_config.js
new file mode 100644
index 000000000000..ac07ad16566d
--- /dev/null
+++ b/test/runtime/samples/each-blocks-assignment/_config.js
@@ -0,0 +1,97 @@
+export default {
+	html: `
+	<button>Add</button>
+	<span class="content">1</span>
+	<button>Test</button>
+	<span class="content">2</span>
+	<button>Test</button>
+	<span class="content">3</span>
+	<button>Test</button>
+	`,
+	async test({ assert, component, target, window }) {
+		let [incrementBtn, ...buttons] = target.querySelectorAll("button");
+
+		const clickEvent = new window.MouseEvent("click");
+		await buttons[0].dispatchEvent(clickEvent);
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+			<button>Add</button>
+			<span class="content">2</span>
+			<button>Test</button>
+			<span class="content">2</span>
+			<button>Test</button>
+			<span class="content">3</span>
+			<button>Test</button>
+		`
+		);
+
+		await buttons[0].dispatchEvent(clickEvent);
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+			<button>Add</button>
+			<span class="content">4</span>
+			<button>Test</button>
+			<span class="content">2</span>
+			<button>Test</button>
+			<span class="content">3</span>
+			<button>Test</button>
+		`
+		);
+
+		await buttons[2].dispatchEvent(clickEvent);
+		await buttons[2].dispatchEvent(clickEvent);
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+			<button>Add</button>
+			<span class="content">4</span>
+			<button>Test</button>
+			<span class="content">2</span>
+			<button>Test</button>
+			<span class="content">12</span>
+			<button>Test</button>
+		`
+		);
+
+		await incrementBtn.dispatchEvent(clickEvent);
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+			<button>Add</button>
+			<span class="content">4</span>
+			<button>Test</button>
+			<span class="content">2</span>
+			<button>Test</button>
+			<span class="content">12</span>
+			<button>Test</button>
+			<span class="content">4</span>
+			<button>Test</button>
+		`
+		);
+
+		[incrementBtn, ...buttons] = target.querySelectorAll("button");
+
+		await buttons[3].dispatchEvent(clickEvent);
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+			<button>Add</button>
+			<span class="content">4</span>
+			<button>Test</button>
+			<span class="content">2</span>
+			<button>Test</button>
+			<span class="content">12</span>
+			<button>Test</button>
+			<span class="content">8</span>
+			<button>Test</button>
+		`
+		);		
+	},
+};
diff --git a/test/runtime/samples/each-blocks-assignment/main.svelte b/test/runtime/samples/each-blocks-assignment/main.svelte
new file mode 100644
index 000000000000..f74bffbe04f7
--- /dev/null
+++ b/test/runtime/samples/each-blocks-assignment/main.svelte
@@ -0,0 +1,13 @@
+<script>
+  let obj = {
+    prop: "foo"
+  };
+
+  let arr = [1, 2, 3]
+</script>
+
+<button on:click={() => arr = [...arr, arr.length + 1]}>Add</button>
+{#each arr as o}
+  <span class="content">{o}</span>
+  <button on:click={() => { o *= 2; }}>Test</button>
+{/each}
\ No newline at end of file