diff --git a/pyo3-macros-backend/src/method.rs b/pyo3-macros-backend/src/method.rs
index 034d079b..b9c78ef6 100644
--- a/pyo3-macros-backend/src/method.rs
+++ b/pyo3-macros-backend/src/method.rs
@@ -81,7 +81,7 @@ pub enum FnType {
     FnNewClass,
     FnClass,
     FnStatic,
-    FnModule,
+    FnModule(Span),
     ClassAttribute,
 }
 
@@ -93,7 +93,7 @@ impl FnType {
             | FnType::Fn(_)
             | FnType::FnClass
             | FnType::FnNewClass
-            | FnType::FnModule => true,
+            | FnType::FnModule(_) => true,
             FnType::FnNew | FnType::FnStatic | FnType::ClassAttribute => false,
         }
     }
@@ -117,8 +117,8 @@ impl FnType {
                     ::std::convert::Into::into(_pyo3::types::PyType::from_type_ptr(py, _slf as *mut _pyo3::ffi::PyTypeObject)),
                 }
             }
-            FnType::FnModule => {
-                quote! {
+            FnType::FnModule(span) => {
+                quote_spanned! { *span =>
                     #[allow(clippy::useless_conversion)]
                     ::std::convert::Into::into(py.from_borrowed_ptr::<_pyo3::types::PyModule>(_slf)),
                 }
@@ -633,7 +633,7 @@ impl<'a> FnSpec<'a> {
             // Getters / Setters / ClassAttribute are not callables on the Python side
             FnType::Getter(_) | FnType::Setter(_) | FnType::ClassAttribute => return None,
             FnType::Fn(_) => Some("self"),
-            FnType::FnModule => Some("module"),
+            FnType::FnModule(_) => Some("module"),
             FnType::FnClass | FnType::FnNewClass => Some("cls"),
             FnType::FnStatic | FnType::FnNew => None,
         };
diff --git a/pyo3-macros-backend/src/pyfunction.rs b/pyo3-macros-backend/src/pyfunction.rs
index 12f25411..5aedc410 100644
--- a/pyo3-macros-backend/src/pyfunction.rs
+++ b/pyo3-macros-backend/src/pyfunction.rs
@@ -189,30 +189,30 @@ pub fn impl_wrap_pyfunction(
 
     let python_name = name.map_or_else(|| func.sig.ident.unraw(), |name| name.value.0);
 
-    let mut arguments = func
-        .sig
-        .inputs
-        .iter_mut()
-        .map(FnArg::parse)
-        .collect::<syn::Result<Vec<_>>>()?;
-
     let tp = if pass_module.is_some() {
-        const PASS_MODULE_ERR: &str =
-            "expected &PyModule or Py<PyModule> as first argument with `pass_module`";
-        ensure_spanned!(
-            !arguments.is_empty(),
-            func.span() => PASS_MODULE_ERR
-        );
-        let arg = arguments.remove(0);
-        ensure_spanned!(
-            type_is_pymodule(arg.ty),
-            arg.ty.span() => PASS_MODULE_ERR
-        );
-        method::FnType::FnModule
+        let span = match func.sig.inputs.first() {
+            Some(syn::FnArg::Typed(first_arg)) => first_arg.ty.span(),
+            Some(syn::FnArg::Receiver(_)) | None => bail_spanned!(
+                func.span() => "expected `&PyModule` or `Py<PyModule>` as first argument with `pass_module`"
+            ),
+        };
+        method::FnType::FnModule(span)
     } else {
         method::FnType::FnStatic
     };
 
+    let arguments = func
+        .sig
+        .inputs
+        .iter_mut()
+        .skip(if tp.skip_first_rust_argument_in_python_signature() {
+            1
+        } else {
+            0
+        })
+        .map(FnArg::parse)
+        .collect::<syn::Result<Vec<_>>>()?;
+
     let signature = if let Some(signature) = signature {
         FunctionSignature::from_arguments_and_attribute(arguments, signature)?
     } else {
@@ -269,34 +269,3 @@ pub fn impl_wrap_pyfunction(
     };
     Ok(wrapped_pyfunction)
 }
-
-fn type_is_pymodule(ty: &syn::Type) -> bool {
-    let is_pymodule = |typath: &syn::TypePath| {
-        typath
-            .path
-            .segments
-            .last()
-            .map_or(false, |seg| seg.ident == "PyModule")
-    };
-    match ty {
-        syn::Type::Reference(tyref) => {
-            if let syn::Type::Path(typath) = tyref.elem.as_ref() {
-                return is_pymodule(typath);
-            }
-        }
-        syn::Type::Path(typath) => {
-            if let Some(syn::PathSegment {
-                arguments: syn::PathArguments::AngleBracketed(args),
-                ..
-            }) = typath.path.segments.last()
-            {
-                if args.args.len() != 1 {
-                    return false;
-                }
-                return matches!(args.args.first().unwrap(), syn::GenericArgument::Type(syn::Type::Path(typath)) if is_pymodule(typath));
-            }
-        }
-        _ => {}
-    }
-    false
-}
diff --git a/pyo3-macros-backend/src/pymethod.rs b/pyo3-macros-backend/src/pymethod.rs
index a8fd3b41..e058e2f2 100644
--- a/pyo3-macros-backend/src/pymethod.rs
+++ b/pyo3-macros-backend/src/pymethod.rs
@@ -257,7 +257,7 @@ pub fn gen_py_method(
                 doc: spec.get_doc(meth_attrs),
             },
         )?),
-        (_, FnType::FnModule) => {
+        (_, FnType::FnModule(_)) => {
             unreachable!("methods cannot be FnModule")
         }
     })
diff --git a/tests/ui/invalid_need_module_arg_position.rs b/tests/ui/invalid_need_module_arg_position.rs
index b3722ae4..2d45f35b 100644
--- a/tests/ui/invalid_need_module_arg_position.rs
+++ b/tests/ui/invalid_need_module_arg_position.rs
@@ -3,10 +3,10 @@ use pyo3::prelude::*;
 #[pymodule]
 fn module(_py: Python<'_>, m: &PyModule) -> PyResult<()> {
     #[pyfn(m, pass_module)]
-    fn fail(string: &str, module: &PyModule) -> PyResult<&str> {
+    fn fail<'py>(string: &str, module: &'py PyModule) -> PyResult<&'py str> {
         module.name()
     }
     Ok(())
 }
 
-fn main(){}
+fn main() {}
diff --git a/tests/ui/invalid_need_module_arg_position.stderr b/tests/ui/invalid_need_module_arg_position.stderr
index 65ab4b16..b9231c30 100644
--- a/tests/ui/invalid_need_module_arg_position.stderr
+++ b/tests/ui/invalid_need_module_arg_position.stderr
@@ -1,5 +1,14 @@
-error: expected &PyModule or Py<PyModule> as first argument with `pass_module`
- --> tests/ui/invalid_need_module_arg_position.rs:6:21
+error[E0277]: the trait bound `&str: From<&pyo3::prelude::PyModule>` is not satisfied
+ --> tests/ui/invalid_need_module_arg_position.rs:6:26
   |
-6 |     fn fail(string: &str, module: &PyModule) -> PyResult<&str> {
-  |                     ^
+6 |     fn fail<'py>(string: &str, module: &'py PyModule) -> PyResult<&'py str> {
+  |                          ^ the trait `From<&pyo3::prelude::PyModule>` is not implemented for `&str`
+  |
+  = help: the following other types implement trait `From<T>`:
+            <String as From<char>>
+            <String as From<Box<str>>>
+            <String as From<Cow<'a, str>>>
+            <String as From<&str>>
+            <String as From<&mut str>>
+            <String as From<&String>>
+  = note: required for `&pyo3::prelude::PyModule` to implement `Into<&str>`