diff --git a/guide/src/function.md b/guide/src/function.md
index b129480559c..2a3d8f84240 100644
--- a/guide/src/function.md
+++ b/guide/src/function.md
@@ -26,7 +26,6 @@ This chapter of the guide explains full usage of the `#[pyfunction]` attribute.
   - [`#[pyo3(warn(message = "...", category = ...))]`](#warn)
 - [Per-argument options](#per-argument-options)
 - [Advanced function patterns](#advanced-function-patterns)
-- [`#[pyfn]` shorthand](#pyfn-shorthand)
 
 There are also additional sections on the following topics:
 
@@ -95,11 +94,11 @@ The `#[pyo3]` attribute can be used to modify properties of the generated Python
     ```
   - <a id="warn"></a> `#[pyo3(warn(message = "...", category = ...))]`
 
-    This option is used to display a warning when the function is used in Python. It is equivalent to [`warnings.warn(message, category)`](https://docs.python.org/3/library/warnings.html#warnings.warn). 
-    The `message` parameter is a string that will be displayed when the function is called, and the `category` parameter is optional and has to be a subclass of [`Warning`](https://docs.python.org/3/library/exceptions.html#Warning). 
+    This option is used to display a warning when the function is used in Python. It is equivalent to [`warnings.warn(message, category)`](https://docs.python.org/3/library/warnings.html#warnings.warn).
+    The `message` parameter is a string that will be displayed when the function is called, and the `category` parameter is optional and has to be a subclass of [`Warning`](https://docs.python.org/3/library/exceptions.html#Warning).
     When the `category` parameter is not provided, the warning will be defaulted to [`UserWarning`](https://docs.python.org/3/library/exceptions.html#UserWarning).
 
-    > Note: when used with `#[pymethods]`, this attribute does not work with `#[classattr]` nor `__traverse__` magic method. 
+    > Note: when used with `#[pymethods]`, this attribute does not work with `#[classattr]` nor `__traverse__` magic method.
 
     The following are examples of using the `#[pyo3(warn)]` attribute:
 
@@ -110,20 +109,20 @@ The `#[pyo3]` attribute can be used to modify properties of the generated Python
     mod raising_warning_fn {
         use pyo3::prelude::pyfunction;
         use pyo3::exceptions::PyFutureWarning;
-    
+
         #[pyfunction]
         #[pyo3(warn(message = "This is a warning message"))]
         fn function_with_warning() -> usize {
             42
         }
-        
+
         #[pyfunction]
         #[pyo3(warn(message = "This function is warning with FutureWarning", category = PyFutureWarning))]
         fn function_with_warning_and_custom_category() -> usize {
             42
         }
     }
-    
+
     # use pyo3::exceptions::{PyFutureWarning, PyUserWarning};
     # use pyo3::types::{IntoPyDict, PyList};
     # use pyo3::PyTypeInfo;
@@ -142,7 +141,7 @@ The `#[pyo3]` attribute can be used to modify properties of the generated Python
     #         .unwrap();
     #     Ok(())
     # }
-    # 
+    #
     # macro_rules! assert_warnings {
     #     ($py:expr, $body:expr, [$(($category:ty, $message:literal)),+] $(,)? ) => {
     #         catch_warning($py, |list| {
@@ -159,7 +158,7 @@ The `#[pyo3]` attribute can be used to modify properties of the generated Python
     #         }).unwrap();
     #     };
     # }
-    # 
+    #
     # Python::attach(|py| {
     #     assert_warnings!(
     #         py,
@@ -181,7 +180,7 @@ The `#[pyo3]` attribute can be used to modify properties of the generated Python
     # });
     ```
 
-    When the functions are called as the following, warnings will be displayed. 
+    When the functions are called as the following, warnings will be displayed.
 
     ```python
     import warnings
@@ -197,7 +196,7 @@ The `#[pyo3]` attribute can be used to modify properties of the generated Python
     UserWarning: This is a warning message
     FutureWarning: This function is warning with FutureWarning
     ```
-    
+
 ## Per-argument options
 
 The `#[pyo3]` attribute can be used on individual arguments to modify properties of them in the generated function. It can take any combination of the following options:
@@ -268,42 +267,4 @@ arguments from the input `PyObject`s.
 The `wrap_pyfunction` macro can be used to directly get a `Bound<PyCFunction>` given a
 `#[pyfunction]` and a `Bound<PyModule>`: `wrap_pyfunction!(rust_fun, module)`.
 
-## `#[pyfn]` shorthand
-
-There is a shorthand to `#[pyfunction]` and `wrap_pymodule!`: the function can be placed inside the module definition and
-annotated with `#[pyfn]`. To simplify PyO3, it is expected that `#[pyfn]` may be removed in a future release (See [#694](https://github.com/PyO3/pyo3/issues/694)).
-
-An example of `#[pyfn]` is below:
-
-```rust,no_run
-use pyo3::prelude::*;
-
-#[pymodule]
-fn my_extension(m: &Bound<'_, PyModule>) -> PyResult<()> {
-    #[pyfn(m)]
-    fn double(x: usize) -> usize {
-        x * 2
-    }
-
-    Ok(())
-}
-```
-
-`#[pyfn(m)]` is just syntactic sugar for `#[pyfunction]`, and takes all the same options
-documented in the rest of this chapter. The code above is expanded to the following:
-
-```rust,no_run
-use pyo3::prelude::*;
-
-#[pymodule]
-fn my_extension(m: &Bound<'_, PyModule>) -> PyResult<()> {
-    #[pyfunction]
-    fn double(x: usize) -> usize {
-        x * 2
-    }
-
-    m.add_function(wrap_pyfunction!(double, m)?)
-}
-```
-
 [`inspect.signature`]: https://docs.python.org/3/library/inspect.html#inspect.signature
diff --git a/newsfragments/5384.changed.md b/newsfragments/5384.changed.md
new file mode 100644
index 00000000000..fe7377d7de8
--- /dev/null
+++ b/newsfragments/5384.changed.md
@@ -0,0 +1 @@
+Deprecate `pyfn` attribute.
diff --git a/pyo3-macros-backend/src/module.rs b/pyo3-macros-backend/src/module.rs
index 1888f564df5..dc504949e2f 100644
--- a/pyo3-macros-backend/src/module.rs
+++ b/pyo3-macros-backend/src/module.rs
@@ -558,15 +558,20 @@ fn process_functions_in_module(options: &PyModuleOptions, func: &mut syn::ItemFn
 
     for mut stmt in func.block.stmts.drain(..) {
         if let syn::Stmt::Item(Item::Fn(func)) = &mut stmt {
-            if let Some(pyfn_args) = get_pyfn_attr(&mut func.attrs)? {
+            if let Some((pyfn_span, pyfn_args)) = get_pyfn_attr(&mut func.attrs)? {
                 let module_name = pyfn_args.modname;
                 let wrapped_function = impl_wrap_pyfunction(func, pyfn_args.options)?;
                 let name = &func.sig.ident;
-                let statements: Vec<syn::Stmt> = syn::parse_quote! {
+                let statements: Vec<syn::Stmt> = syn::parse_quote_spanned! {
+                    pyfn_span =>
                     #wrapped_function
                     {
                         use #pyo3_path::types::PyModuleMethods;
                         #module_name.add_function(#pyo3_path::wrap_pyfunction!(#name, #module_name.as_borrowed())?)?;
+                        #[deprecated(note = "`pyfn` will be removed in a future PyO3 version, use declarative `#[pymodule]` with `mod` instead")]
+                        #[allow(dead_code)]
+                        const PYFN_ATTRIBUTE: () = ();
+                        const _: () = PYFN_ATTRIBUTE;
                     }
                 };
                 stmts.extend(statements);
@@ -607,8 +612,8 @@ impl Parse for PyFnArgs {
 }
 
 /// Extracts the data from the #[pyfn(...)] attribute of a function
-fn get_pyfn_attr(attrs: &mut Vec<syn::Attribute>) -> syn::Result<Option<PyFnArgs>> {
-    let mut pyfn_args: Option<PyFnArgs> = None;
+fn get_pyfn_attr(attrs: &mut Vec<syn::Attribute>) -> syn::Result<Option<(Span, PyFnArgs)>> {
+    let mut pyfn_args: Option<(Span, PyFnArgs)> = None;
 
     take_attributes(attrs, |attr| {
         if attr.path().is_ident("pyfn") {
@@ -616,14 +621,14 @@ fn get_pyfn_attr(attrs: &mut Vec<syn::Attribute>) -> syn::Result<Option<PyFnArgs
                 pyfn_args.is_none(),
                 attr.span() => "`#[pyfn] may only be specified once"
             );
-            pyfn_args = Some(attr.parse_args()?);
+            pyfn_args = Some((attr.path().span(), attr.parse_args()?));
             Ok(true)
         } else {
             Ok(false)
         }
     })?;
 
-    if let Some(pyfn_args) = &mut pyfn_args {
+    if let Some((_, pyfn_args)) = &mut pyfn_args {
         pyfn_args
             .options
             .add_attributes(take_pyo3_options(attrs)?)?;
diff --git a/tests/test_compile_error.rs b/tests/test_compile_error.rs
index 6d60d9cb0f5..97439769600 100644
--- a/tests/test_compile_error.rs
+++ b/tests/test_compile_error.rs
@@ -5,6 +5,7 @@
 fn test_compile_errors() {
     let t = trybuild::TestCases::new();
 
+    t.compile_fail("tests/ui/deprecated_pyfn.rs");
     #[cfg(not(feature = "experimental-inspect"))]
     t.compile_fail("tests/ui/invalid_property_args.rs");
     t.compile_fail("tests/ui/invalid_proto_pymethods.rs");
diff --git a/tests/test_module.rs b/tests/test_module.rs
index 5e6244420e0..20174f9baeb 100644
--- a/tests/test_module.rs
+++ b/tests/test_module.rs
@@ -5,7 +5,6 @@ use pyo3::prelude::*;
 use pyo3::py_run;
 use pyo3::types::PyString;
 use pyo3::types::{IntoPyDict, PyDict, PyTuple};
-use pyo3::BoundObject;
 use pyo3_ffi::c_str;
 
 mod test_utils;
@@ -35,41 +34,44 @@ fn double(x: usize) -> usize {
     x * 2
 }
 
-/// This module is implemented in Rust.
-#[pymodule(gil_used = false)]
-fn module_with_functions(m: &Bound<'_, PyModule>) -> PyResult<()> {
-    #[pyfn(m)]
-    #[pyo3(name = "no_parameters")]
-    fn function_with_name() -> usize {
-        42
-    }
+#[test]
+fn test_module_with_functions() {
+    use pyo3::wrap_pymodule;
 
-    #[pyfn(m)]
-    #[pyo3(pass_module)]
-    fn with_module<'py>(module: &Bound<'py, PyModule>) -> PyResult<Bound<'py, PyString>> {
-        module.name()
-    }
+    /// This module is implemented in Rust.
+    #[pymodule(gil_used = false)]
+    mod module_with_functions {
+        use super::*;
 
-    #[pyfn(m)]
-    fn double_value(v: &ValueClass) -> usize {
-        v.value * 2
-    }
+        #[pymodule_export]
+        use super::{AnonClass, ValueClass};
 
-    m.add_class::<AnonClass>()?;
-    m.add_class::<ValueClass>()?;
-    m.add_class::<LocatedClass>()?;
-
-    m.add("foo", "bar")?;
+        #[pymodule_init]
+        fn init_module(m: &Bound<'_, PyModule>) -> PyResult<()> {
+            m.add_class::<LocatedClass>()?;
+            m.add("foo", "bar")?;
+            m.add_function(wrap_pyfunction!(double, m)?)?;
+            m.add("also_double", wrap_pyfunction!(double, m)?)?;
+            Ok(())
+        }
 
-    m.add_function(wrap_pyfunction!(double, m)?)?;
-    m.add("also_double", wrap_pyfunction!(double, m)?)?;
+        #[pyfunction]
+        #[pyo3(name = "no_parameters")]
+        fn function_with_name() -> usize {
+            42
+        }
 
-    Ok(())
-}
+        #[pyfunction]
+        #[pyo3(pass_module)]
+        fn with_module<'py>(module: &Bound<'py, PyModule>) -> PyResult<Bound<'py, PyString>> {
+            module.name()
+        }
 
-#[test]
-fn test_module_with_functions() {
-    use pyo3::wrap_pymodule;
+        #[pyfunction]
+        fn double_value(v: &ValueClass) -> usize {
+            v.value * 2
+        }
+    }
 
     Python::attach(|py| {
         let d = [(
@@ -118,6 +120,87 @@ fn test_module_with_functions() {
     });
 }
 
+#[test]
+#[allow(deprecated)]
+fn test_module_with_pyfn() {
+    use pyo3::wrap_pymodule;
+
+    /// This module is implemented in Rust.
+    #[pymodule(gil_used = false)]
+    fn module_with_pyfn(m: &Bound<'_, PyModule>) -> PyResult<()> {
+        #[pyfn(m)]
+        #[pyo3(name = "no_parameters")]
+        fn function_with_name() -> usize {
+            42
+        }
+
+        #[pyfn(m)]
+        #[pyo3(pass_module)]
+        fn with_module<'py>(module: &Bound<'py, PyModule>) -> PyResult<Bound<'py, PyString>> {
+            module.name()
+        }
+
+        #[pyfn(m)]
+        fn double_value(v: &ValueClass) -> usize {
+            v.value * 2
+        }
+
+        m.add_class::<AnonClass>()?;
+        m.add_class::<ValueClass>()?;
+        m.add_class::<LocatedClass>()?;
+
+        m.add("foo", "bar")?;
+
+        m.add_function(wrap_pyfunction!(double, m)?)?;
+        m.add("also_double", wrap_pyfunction!(double, m)?)?;
+
+        Ok(())
+    }
+
+    Python::attach(|py| {
+        let d = [("module_with_pyfn", wrap_pymodule!(module_with_pyfn)(py))]
+            .into_py_dict(py)
+            .unwrap();
+
+        py_assert!(
+            py,
+            *d,
+            "module_with_pyfn.__doc__ == 'This module is implemented in Rust.'"
+        );
+        py_assert!(py, *d, "module_with_pyfn.no_parameters() == 42");
+        py_assert!(py, *d, "module_with_pyfn.foo == 'bar'");
+        py_assert!(py, *d, "module_with_pyfn.AnonClass != None");
+        py_assert!(py, *d, "module_with_pyfn.LocatedClass != None");
+        py_assert!(
+            py,
+            *d,
+            "module_with_pyfn.LocatedClass.__module__ == 'module'"
+        );
+        py_assert!(py, *d, "module_with_pyfn.double(3) == 6");
+        py_assert!(
+            py,
+            *d,
+            "module_with_pyfn.double.__doc__ == 'Doubles the given value'"
+        );
+        py_assert!(py, *d, "module_with_pyfn.also_double(3) == 6");
+        py_assert!(
+            py,
+            *d,
+            "module_with_pyfn.also_double.__doc__ == 'Doubles the given value'"
+        );
+        py_assert!(
+            py,
+            *d,
+            "module_with_pyfn.double_value(module_with_pyfn.ValueClass(1)) == 2"
+        );
+        py_assert!(
+            py,
+            *d,
+            "module_with_pyfn.with_module() == 'module_with_pyfn'"
+        );
+    });
+}
+
 /// This module uses a legacy two-argument module function.
 #[pymodule]
 fn module_with_explicit_py_arg(_py: Python<'_>, m: &Bound<'_, PyModule>) -> PyResult<()> {
@@ -319,42 +402,6 @@ fn test_module_nesting() {
     });
 }
 
-// Test that argument parsing specification works for pyfunctions
-
-#[pyfunction(signature = (a=5, *args))]
-fn ext_vararg_fn(py: Python<'_>, a: i32, args: &Bound<'_, PyTuple>) -> PyResult<Py<PyAny>> {
-    [
-        a.into_pyobject(py)?.into_any().into_bound(),
-        args.as_any().clone(),
-    ]
-    .into_pyobject(py)
-    .map(Bound::unbind)
-}
-
-#[pymodule]
-fn vararg_module(m: &Bound<'_, PyModule>) -> PyResult<()> {
-    #[pyfn(m, signature = (a=5, *args))]
-    fn int_vararg_fn(py: Python<'_>, a: i32, args: &Bound<'_, PyTuple>) -> PyResult<Py<PyAny>> {
-        ext_vararg_fn(py, a, args)
-    }
-
-    m.add_function(wrap_pyfunction!(ext_vararg_fn, m)?).unwrap();
-    Ok(())
-}
-
-#[test]
-fn test_vararg_module() {
-    Python::attach(|py| {
-        let m = pyo3::wrap_pymodule!(vararg_module)(py);
-
-        py_assert!(py, m, "m.ext_vararg_fn() == [5, ()]");
-        py_assert!(py, m, "m.ext_vararg_fn(1, 2) == [1, (2,)]");
-
-        py_assert!(py, m, "m.int_vararg_fn() == [5, ()]");
-        py_assert!(py, m, "m.int_vararg_fn(1, 2) == [1, (2,)]");
-    });
-}
-
 #[test]
 fn test_module_with_constant() {
     // Regression test for #1102
diff --git a/tests/test_text_signature.rs b/tests/test_text_signature.rs
index 88057b05b6a..b4815d692a1 100644
--- a/tests/test_text_signature.rs
+++ b/tests/test_text_signature.rs
@@ -333,6 +333,7 @@ fn test_auto_test_signature_opt_out() {
 }
 
 #[test]
+#[allow(deprecated)]
 fn test_pyfn() {
     #[pymodule]
     fn my_module(m: &Bound<'_, PyModule>) -> PyResult<()> {
diff --git a/tests/ui/deprecated_pyfn.rs b/tests/ui/deprecated_pyfn.rs
new file mode 100644
index 00000000000..1c5edbafd31
--- /dev/null
+++ b/tests/ui/deprecated_pyfn.rs
@@ -0,0 +1,13 @@
+#![deny(deprecated)]
+
+use pyo3::prelude::*;
+
+#[pymodule]
+fn module_with_pyfn(m: &Bound<'_, PyModule>) -> PyResult<()> {
+    #[pyfn(m)]
+    fn foo() {}
+
+    Ok(())
+}
+
+fn main() {}
diff --git a/tests/ui/deprecated_pyfn.stderr b/tests/ui/deprecated_pyfn.stderr
new file mode 100644
index 00000000000..c5dd0b3b4ac
--- /dev/null
+++ b/tests/ui/deprecated_pyfn.stderr
@@ -0,0 +1,11 @@
+error: use of deprecated constant `module_with_pyfn::PYFN_ATTRIBUTE`: `pyfn` will be removed in a future PyO3 version, use declarative `#[pymodule]` with `mod` instead
+ --> tests/ui/deprecated_pyfn.rs:7:7
+  |
+7 |     #[pyfn(m)]
+  |       ^^^^
+  |
+note: the lint level is defined here
+ --> tests/ui/deprecated_pyfn.rs:1:9
+  |
+1 | #![deny(deprecated)]
+  |         ^^^^^^^^^^