diff --git a/docs/versionhistory.rst b/docs/versionhistory.rst
index a0f7f0ca..8dfa47fe 100644
--- a/docs/versionhistory.rst
+++ b/docs/versionhistory.rst
@@ -7,6 +7,8 @@ This library adheres to `Semantic Versioning 2.0 <https://semver.org/#semantic-v
 
 - Improved the documentation
 - Fixed assignment unpacking (``a, b = ...``) being checked incorrectly
+- Fixed ``@typechecked`` attempting to instrument wrapper decorators such as
+  ``@contextmanager`` when applied to a class
 
 **3.0.0** (2023-03-15)
 
diff --git a/src/typeguard/_decorators.py b/src/typeguard/_decorators.py
index db06056a..0697b1ab 100644
--- a/src/typeguard/_decorators.py
+++ b/src/typeguard/_decorators.py
@@ -40,6 +40,11 @@ def instrument(f: T_CallableOrType) -> FunctionType | str:
         return "__module__ attribute is not set"
     elif f.__code__.co_filename == "<stdin>":
         return "cannot instrument functions defined in a REPL"
+    elif hasattr(f, "__wrapped__"):
+        return (
+            "@typechecked only supports instrumenting functions wrapped with "
+            "@classmethod, @staticmethod or @property"
+        )
 
     target_path = [item for item in f.__qualname__.split(".") if item != "<locals>"]
     module_source = inspect.getsource(sys.modules[f.__module__])
@@ -162,29 +167,15 @@ def typechecked(target: T_CallableOrType | None = None) -> Any:
         return target
 
     # Find either the first Python wrapper or the actual function
-    func: FunctionType
     wrapper_class: type[classmethod[Any]] | type[staticmethod[Any]] | None = None
     if isinstance(target, (classmethod, staticmethod)):
         wrapper_class = target.__class__
         target = target.__func__
 
-    if hasattr(target, "__wrapped__"):
-        warn(
-            f"Cannot instrument {function_name(target)} -- @typechecked only supports "
-            f"instrumenting functions wrapped with @classmethod, @staticmethod or "
-            f"@property",
-            InstrumentationWarning,
-        )
-        return target
-    elif isfunction(target):
-        func = target
-    else:
-        raise TypeError("target is not a function or a supported wrapper")
-
-    retval = instrument(func)
+    retval = instrument(target)
     if isinstance(retval, str):
         warn(
-            f"{retval} -- not typechecking {function_name(func)}",
+            f"{retval} -- not typechecking {function_name(target)}",
             InstrumentationWarning,
         )
         return target
diff --git a/tests/test_typechecked.py b/tests/test_typechecked.py
index fc1c82e3..6862f923 100644
--- a/tests/test_typechecked.py
+++ b/tests/test_typechecked.py
@@ -1,5 +1,6 @@
 import asyncio
 import sys
+from contextlib import contextmanager
 from textwrap import dedent
 from typing import (
     Any,
@@ -580,3 +581,14 @@ def foo() -> Internal:
         return Internal()
 
     assert isinstance(foo(), Internal)
+
+
+def test_existing_method_decorator():
+    @typechecked
+    class Foo:
+        @contextmanager
+        def method(self, x: int) -> None:
+            yield x + 1
+
+    with Foo().method(6) as value:
+        assert value == 7