diff --git a/CHANGELOG.md b/CHANGELOG.md
index a79673751f..724d09cc4f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -20,6 +20,7 @@ This change log adheres to standards from [Keep a CHANGELOG](https://keepachange
 * [`jsx-no-useless-fragment`]: use proper apostrophe in error message ([#3266][] @develohpanda)
 * `propTypes`: handle imported types/interface in forwardRef generic ([#3280][] @vedadeepta)
 * [`button-has-type`]: fix exception for `<button type>` ([#3255][] @meowtec)
+* [`no-unstable-nested-components`]: Improve error message and catch React.memo() ([#3247][] @zacharyliu)
 
 ### Changed
 * [readme] remove global usage and eslint version from readme ([#3254][] @aladdin-add)
@@ -55,6 +56,7 @@ This change log adheres to standards from [Keep a CHANGELOG](https://keepachange
 [#3251]: https://github.com/jsx-eslint/eslint-plugin-react/pull/3251
 [#3249]: https://github.com/jsx-eslint/eslint-plugin-react/pull/3249
 [#3248]: https://github.com/jsx-eslint/eslint-plugin-react/pull/3248
+[#3247]: https://github.com/jsx-eslint/eslint-plugin-react/pull/3247
 [#3244]: https://github.com/jsx-eslint/eslint-plugin-react/pull/3244
 [#3235]: https://github.com/jsx-eslint/eslint-plugin-react/pull/3235
 [#3230]: https://github.com/jsx-eslint/eslint-plugin-react/issues/3230
diff --git a/lib/rules/no-unstable-nested-components.js b/lib/rules/no-unstable-nested-components.js
index ca4ddff560..51559ce9e1 100644
--- a/lib/rules/no-unstable-nested-components.js
+++ b/lib/rules/no-unstable-nested-components.js
@@ -14,7 +14,6 @@ const report = require('../util/report');
 // Constants
 // ------------------------------------------------------------------------------
 
-const ERROR_MESSAGE_WITHOUT_NAME = 'Declare this component outside parent component or memoize it.';
 const COMPONENT_AS_PROPS_INFO = ' If you want to allow component creation in props, set allowAsProps option to true.';
 const HOOK_REGEXP = /^use[A-Z0-9].*$/;
 
@@ -24,11 +23,11 @@ const HOOK_REGEXP = /^use[A-Z0-9].*$/;
 
 /**
  * Generate error message with given parent component name
- * @param {String} parentName Name of the parent component
+ * @param {String} parentName Name of the parent component, if known
  * @returns {String} Error message with parent component name
  */
 function generateErrorMessageWithParentName(parentName) {
-  return `Declare this component outside parent component "${parentName}" or memoize it.`;
+  return `Do not define components during render. React will see a new component type on every render and destroy the entire subtree’s DOM nodes and state (https://reactjs.org/docs/reconciliation.html#elements-of-different-types). Instead, move this component definition out of the parent component${parentName ? ` “${parentName}” ` : ' '}and pass data as props.`;
 }
 
 /**
@@ -464,9 +463,7 @@ module.exports = {
           return;
         }
 
-        let message = parentName
-          ? generateErrorMessageWithParentName(parentName)
-          : ERROR_MESSAGE_WITHOUT_NAME;
+        let message = generateErrorMessageWithParentName(parentName);
 
         // Add information about allowAsProps option when component is declared inside prop
         if (isDeclaredInsideProps && !allowAsProps) {
@@ -488,6 +485,7 @@ module.exports = {
       ArrowFunctionExpression(node) { validate(node); },
       FunctionExpression(node) { validate(node); },
       ClassDeclaration(node) { validate(node); },
+      CallExpression(node) { validate(node); },
     };
   }),
 };
diff --git a/tests/lib/rules/no-unstable-nested-components.js b/tests/lib/rules/no-unstable-nested-components.js
index 2c7aea2130..fd383fb8b5 100644
--- a/tests/lib/rules/no-unstable-nested-components.js
+++ b/tests/lib/rules/no-unstable-nested-components.js
@@ -22,8 +22,8 @@ const parserOptions = {
   },
 };
 
-const ERROR_MESSAGE = 'Declare this component outside parent component "ParentComponent" or memoize it.';
-const ERROR_MESSAGE_WITHOUT_NAME = 'Declare this component outside parent component or memoize it.';
+const ERROR_MESSAGE = 'Do not define components during render. React will see a new component type on every render and destroy the entire subtree’s DOM nodes and state (https://reactjs.org/docs/reconciliation.html#elements-of-different-types). Instead, move this component definition out of the parent component “ParentComponent” and pass data as props.';
+const ERROR_MESSAGE_WITHOUT_NAME = 'Do not define components during render. React will see a new component type on every render and destroy the entire subtree’s DOM nodes and state (https://reactjs.org/docs/reconciliation.html#elements-of-different-types). Instead, move this component definition out of the parent component and pass data as props.';
 const ERROR_MESSAGE_COMPONENT_AS_PROPS = `${ERROR_MESSAGE} If you want to allow component creation in props, set allowAsProps option to true.`;
 
 // ------------------------------------------------------------------------------
@@ -1175,5 +1175,73 @@ ruleTester.run('no-unstable-nested-components', rule, {
       `,
       errors: [{ message: ERROR_MESSAGE_COMPONENT_AS_PROPS }],
     },
+    {
+      code: `
+        function ParentComponent() {
+          const UnstableNestedComponent = React.memo(() => {
+            return <div />;
+          });
+
+          return (
+            <div>
+              <UnstableNestedComponent />
+            </div>
+          );
+        }
+      `,
+      errors: [{ message: ERROR_MESSAGE }],
+    },
+    {
+      code: `
+        function ParentComponent() {
+          const UnstableNestedComponent = React.memo(
+            () => React.createElement("div", null),
+          );
+
+          return React.createElement(
+            "div",
+            null,
+            React.createElement(UnstableNestedComponent, null)
+          );
+        }
+      `,
+      errors: [{ message: ERROR_MESSAGE }],
+    },
+    {
+      code: `
+        function ParentComponent() {
+          const UnstableNestedComponent = React.memo(
+            function () {
+              return <div />;
+            }
+          );
+
+          return (
+            <div>
+              <UnstableNestedComponent />
+            </div>
+          );
+        }
+      `,
+      errors: [{ message: ERROR_MESSAGE }],
+    },
+    {
+      code: `
+        function ParentComponent() {
+          const UnstableNestedComponent = React.memo(
+            function () {
+              return React.createElement("div", null);
+            }
+          );
+
+          return React.createElement(
+            "div",
+            null,
+            React.createElement(UnstableNestedComponent, null)
+          );
+        }
+      `,
+      errors: [{ message: ERROR_MESSAGE }],
+    },
   ]),
 });