diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 63255188172..b3b51787cc1 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -17493,30 +17493,27 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
             return constraintType;
         }
         const keyTypes: Type[] = [];
-        if (isMappedTypeWithKeyofConstraintDeclaration(type)) {
-            // We have a { [P in keyof T]: X }
-
-            // `getApparentType` on the T in a generic mapped type can trigger a circularity
-            // (conditionals and `infer` types create a circular dependency in the constraint resolution)
-            // so we only eagerly manifest the keys if the constraint is nongeneric
-            if (!isGenericIndexType(constraintType)) {
-                const modifiersType = getApparentType(getModifiersTypeFromMappedType(type)); // The 'T' in 'keyof T'
-                forEachMappedTypePropertyKeyTypeAndIndexSignatureKeyType(modifiersType, TypeFlags.StringOrNumberLiteralOrUnique, !!(indexFlags & IndexFlags.StringsOnly), addMemberForKeyType);
-            }
-            else {
-                // we have a generic index and a homomorphic mapping (but a distributive key remapping) - we need to defer the whole `keyof whatever` for later
-                // since it's not safe to resolve the shape of modifier type
+        // Calling getApparentType on the `T` of a `keyof T` in the constraint type of a generic mapped type can
+        // trigger a circularity. For example, `T extends { [P in keyof T & string as Captitalize<P>]: any }` is
+        // a circular definition. For this reason, we only eagerly manifest the keys if the constraint is non-generic.
+        if (isGenericIndexType(constraintType)) {
+            if (isMappedTypeWithKeyofConstraintDeclaration(type)) {
+                // We have a generic index and a homomorphic mapping (but a distributive key remapping) - we need to defer
+                // the whole `keyof whatever` for later since it's not safe to resolve the shape of modifier type.
                 return getIndexTypeForGenericType(type, indexFlags);
             }
+            // Include the generic component in the resulting type.
+            forEachType(constraintType, addMemberForKeyType);
+        }
+        else if (isMappedTypeWithKeyofConstraintDeclaration(type)) {
+            const modifiersType = getApparentType(getModifiersTypeFromMappedType(type)); // The 'T' in 'keyof T'
+            forEachMappedTypePropertyKeyTypeAndIndexSignatureKeyType(modifiersType, TypeFlags.StringOrNumberLiteralOrUnique, !!(indexFlags & IndexFlags.StringsOnly), addMemberForKeyType);
         }
         else {
             forEachType(getLowerBoundOfKeyType(constraintType), addMemberForKeyType);
         }
-        if (isGenericIndexType(constraintType)) { // include the generic component in the resulting type
-            forEachType(constraintType, addMemberForKeyType);
-        }
-        // we had to pick apart the constraintType to potentially map/filter it - compare the final resulting list with the original constraintType,
-        // so we can return the union that preserves aliases/origin data if possible
+        // We had to pick apart the constraintType to potentially map/filter it - compare the final resulting list with the
+        // original constraintType, so we can return the union that preserves aliases/origin data if possible.
         const result = indexFlags & IndexFlags.NoIndexSignatures ? filterType(getUnionType(keyTypes), t => !(t.flags & (TypeFlags.Any | TypeFlags.String))) : getUnionType(keyTypes);
         if (result.flags & TypeFlags.Union && constraintType.flags & TypeFlags.Union && getTypeListId((result as UnionType).types) === getTypeListId((constraintType as UnionType).types)) {
             return constraintType;
diff --git a/tests/baselines/reference/circularMappedTypeConstraint.symbols b/tests/baselines/reference/circularMappedTypeConstraint.symbols
new file mode 100644
index 00000000000..8c963abf1fd
--- /dev/null
+++ b/tests/baselines/reference/circularMappedTypeConstraint.symbols
@@ -0,0 +1,23 @@
+//// [tests/cases/compiler/circularMappedTypeConstraint.ts] ////
+
+=== circularMappedTypeConstraint.ts ===
+// Repro from #56232
+
+declare function foo2<T extends { [P in keyof T & string as Capitalize<P>]: V }, V extends string>(a: T): T;
+>foo2 : Symbol(foo2, Decl(circularMappedTypeConstraint.ts, 0, 0))
+>T : Symbol(T, Decl(circularMappedTypeConstraint.ts, 2, 22))
+>P : Symbol(P, Decl(circularMappedTypeConstraint.ts, 2, 35))
+>T : Symbol(T, Decl(circularMappedTypeConstraint.ts, 2, 22))
+>Capitalize : Symbol(Capitalize, Decl(lib.es5.d.ts, --, --))
+>P : Symbol(P, Decl(circularMappedTypeConstraint.ts, 2, 35))
+>V : Symbol(V, Decl(circularMappedTypeConstraint.ts, 2, 80))
+>V : Symbol(V, Decl(circularMappedTypeConstraint.ts, 2, 80))
+>a : Symbol(a, Decl(circularMappedTypeConstraint.ts, 2, 99))
+>T : Symbol(T, Decl(circularMappedTypeConstraint.ts, 2, 22))
+>T : Symbol(T, Decl(circularMappedTypeConstraint.ts, 2, 22))
+
+export const r2 = foo2({A: "a"});
+>r2 : Symbol(r2, Decl(circularMappedTypeConstraint.ts, 3, 12))
+>foo2 : Symbol(foo2, Decl(circularMappedTypeConstraint.ts, 0, 0))
+>A : Symbol(A, Decl(circularMappedTypeConstraint.ts, 3, 24))
+
diff --git a/tests/baselines/reference/circularMappedTypeConstraint.types b/tests/baselines/reference/circularMappedTypeConstraint.types
new file mode 100644
index 00000000000..5e00e8e2165
--- /dev/null
+++ b/tests/baselines/reference/circularMappedTypeConstraint.types
@@ -0,0 +1,17 @@
+//// [tests/cases/compiler/circularMappedTypeConstraint.ts] ////
+
+=== circularMappedTypeConstraint.ts ===
+// Repro from #56232
+
+declare function foo2<T extends { [P in keyof T & string as Capitalize<P>]: V }, V extends string>(a: T): T;
+>foo2 : <T extends { [P in keyof T & string as Capitalize<P>]: V; }, V extends string>(a: T) => T
+>a : T
+
+export const r2 = foo2({A: "a"});
+>r2 : { A: string; }
+>foo2({A: "a"}) : { A: string; }
+>foo2 : <T extends { [P in keyof T & string as Capitalize<P>]: V; }, V extends string>(a: T) => T
+>{A: "a"} : { A: string; }
+>A : string
+>"a" : "a"
+
diff --git a/tests/cases/compiler/circularMappedTypeConstraint.ts b/tests/cases/compiler/circularMappedTypeConstraint.ts
new file mode 100644
index 00000000000..90160560d32
--- /dev/null
+++ b/tests/cases/compiler/circularMappedTypeConstraint.ts
@@ -0,0 +1,7 @@
+// @strict: true
+// @noEmit: true
+
+// Repro from #56232
+
+declare function foo2<T extends { [P in keyof T & string as Capitalize<P>]: V }, V extends string>(a: T): T;
+export const r2 = foo2({A: "a"});