diff --git a/packages/type-utils/src/isTypeReadonly.ts b/packages/type-utils/src/isTypeReadonly.ts
index 7f689b5b7df1..f1ea845e6e09 100644
--- a/packages/type-utils/src/isTypeReadonly.ts
+++ b/packages/type-utils/src/isTypeReadonly.ts
@@ -107,9 +107,18 @@ function isTypeReadonlyObject(
   function checkIndexSignature(kind: ts.IndexKind): Readonlyness {
     const indexInfo = checker.getIndexInfoOfType(type, kind);
     if (indexInfo) {
-      return indexInfo.isReadonly
-        ? Readonlyness.Readonly
-        : Readonlyness.Mutable;
+      if (!indexInfo.isReadonly) {
+        return Readonlyness.Mutable;
+      }
+
+      return (
+        isTypeReadonlyRecurser(
+          checker,
+          indexInfo.keyType,
+          options,
+          seenTypes,
+        ) && isTypeReadonlyRecurser(checker, indexInfo.type, options, seenTypes)
+      );
     }
 
     return Readonlyness.UnknownType;
@@ -119,20 +128,33 @@ function isTypeReadonlyObject(
   if (properties.length) {
     // ensure the properties are marked as readonly
     for (const property of properties) {
-      if (
-        !(
-          isPropertyReadonlyInType(type, property.getEscapedName(), checker) ||
-          (options.treatMethodsAsReadonly &&
-            property.valueDeclaration !== undefined &&
-            hasSymbol(property.valueDeclaration) &&
-            isSymbolFlagSet(
-              property.valueDeclaration.symbol,
-              ts.SymbolFlags.Method,
-            ))
-        )
-      ) {
-        return Readonlyness.Mutable;
+      if (options.treatMethodsAsReadonly) {
+        if (
+          property.valueDeclaration !== undefined &&
+          hasSymbol(property.valueDeclaration) &&
+          isSymbolFlagSet(
+            property.valueDeclaration.symbol,
+            ts.SymbolFlags.Method,
+          )
+        ) {
+          continue;
+        }
+
+        const lastDeclaration = property.getDeclarations()?.at(-1);
+        if (
+          lastDeclaration !== undefined &&
+          hasSymbol(lastDeclaration) &&
+          isSymbolFlagSet(lastDeclaration.symbol, ts.SymbolFlags.Method)
+        ) {
+          continue;
+        }
+      }
+
+      if (isPropertyReadonlyInType(type, property.getEscapedName(), checker)) {
+        continue;
       }
+
+      return Readonlyness.Mutable;
     }
 
     // all properties were readonly
diff --git a/packages/type-utils/tests/isTypeReadonly.test.ts b/packages/type-utils/tests/isTypeReadonly.test.ts
index 94e6add83372..49789f1e8c8a 100644
--- a/packages/type-utils/tests/isTypeReadonly.test.ts
+++ b/packages/type-utils/tests/isTypeReadonly.test.ts
@@ -264,15 +264,13 @@ describe('isTypeReadonly', () => {
       });
 
       describe('is not readonly', () => {
-        describe('default options', () => {
-          it('fails with a mutable PropertySignature inside a readonly IndexSignature', () => {
-            const { type, checker } = getType(
-              `type Test = { readonly [key: string]: { foo: string[]; }; };`,
-            );
+        it('fails with a mutable PropertySignature inside a readonly IndexSignature', () => {
+          const { type, checker } = getType(
+            `type Test = { readonly [key: string]: { foo: string[]; }; };`,
+          );
 
-            const result = isTypeReadonly(checker, type);
-            expect(result).toBe(false);
-          });
+          const result = isTypeReadonly(checker, type);
+          expect(result).toBe(false);
         });
       });
     });