In Python, if I return inside a “with” block, will the file still close?

Yes, it acts like the finally block after a try block, i.e. it always executes (unless the python process terminates in an unusual way of course).

It is also mentioned in one of the examples of PEP-343 which is the specification for the with statement:

with locked(myLock):
    # Code here executes with myLock held.  The lock is
    # guaranteed to be released when the block is left (even
    # if via return or by an uncaught exception).

Something worth mentioning is however, that you cannot easily catch exceptions thrown by the open() call without putting the whole with block inside a try..except block which is usually not what one wants.

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