diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index a39f1a9a688..3f4d60657e4 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -28842,7 +28842,8 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
         }
         const index = findContextualNode(node);
         if (index >= 0) {
-            return contextualTypes[index];
+            const cached = contextualTypes[index];
+            if (cached || !contextFlags) return cached;
         }
         const { parent } = node;
         switch (parent.kind) {
diff --git a/tests/baselines/reference/cachedContextualTypes.js b/tests/baselines/reference/cachedContextualTypes.js
new file mode 100644
index 00000000000..c3f9d06d57d
--- /dev/null
+++ b/tests/baselines/reference/cachedContextualTypes.js
@@ -0,0 +1,38 @@
+//// [cachedContextualTypes.ts]
+// Repro from #52198
+
+declare function createInstance<Ctor extends new (...args: any[]) => any, R extends InstanceType<Ctor>>(ctor: Ctor, ...args: ConstructorParameters<Ctor>): R;
+
+export interface IMenuWorkbenchToolBarOptions {
+    toolbarOptions: {
+        foo(bar: string): string
+    };
+}
+
+class MenuWorkbenchToolBar {
+    constructor(
+        options: IMenuWorkbenchToolBarOptions | undefined,
+    ) { }
+}
+
+createInstance(MenuWorkbenchToolBar, {
+    toolbarOptions: {
+        foo(bar) { return bar; }
+    }
+});
+
+
+//// [cachedContextualTypes.js]
+"use strict";
+// Repro from #52198
+Object.defineProperty(exports, "__esModule", { value: true });
+var MenuWorkbenchToolBar = /** @class */ (function () {
+    function MenuWorkbenchToolBar(options) {
+    }
+    return MenuWorkbenchToolBar;
+}());
+createInstance(MenuWorkbenchToolBar, {
+    toolbarOptions: {
+        foo: function (bar) { return bar; }
+    }
+});
diff --git a/tests/baselines/reference/cachedContextualTypes.symbols b/tests/baselines/reference/cachedContextualTypes.symbols
new file mode 100644
index 00000000000..c4e8ad97394
--- /dev/null
+++ b/tests/baselines/reference/cachedContextualTypes.symbols
@@ -0,0 +1,55 @@
+=== tests/cases/compiler/cachedContextualTypes.ts ===
+// Repro from #52198
+
+declare function createInstance<Ctor extends new (...args: any[]) => any, R extends InstanceType<Ctor>>(ctor: Ctor, ...args: ConstructorParameters<Ctor>): R;
+>createInstance : Symbol(createInstance, Decl(cachedContextualTypes.ts, 0, 0))
+>Ctor : Symbol(Ctor, Decl(cachedContextualTypes.ts, 2, 32))
+>args : Symbol(args, Decl(cachedContextualTypes.ts, 2, 50))
+>R : Symbol(R, Decl(cachedContextualTypes.ts, 2, 73))
+>InstanceType : Symbol(InstanceType, Decl(lib.es5.d.ts, --, --))
+>Ctor : Symbol(Ctor, Decl(cachedContextualTypes.ts, 2, 32))
+>ctor : Symbol(ctor, Decl(cachedContextualTypes.ts, 2, 104))
+>Ctor : Symbol(Ctor, Decl(cachedContextualTypes.ts, 2, 32))
+>args : Symbol(args, Decl(cachedContextualTypes.ts, 2, 115))
+>ConstructorParameters : Symbol(ConstructorParameters, Decl(lib.es5.d.ts, --, --))
+>Ctor : Symbol(Ctor, Decl(cachedContextualTypes.ts, 2, 32))
+>R : Symbol(R, Decl(cachedContextualTypes.ts, 2, 73))
+
+export interface IMenuWorkbenchToolBarOptions {
+>IMenuWorkbenchToolBarOptions : Symbol(IMenuWorkbenchToolBarOptions, Decl(cachedContextualTypes.ts, 2, 157))
+
+    toolbarOptions: {
+>toolbarOptions : Symbol(IMenuWorkbenchToolBarOptions.toolbarOptions, Decl(cachedContextualTypes.ts, 4, 47))
+
+        foo(bar: string): string
+>foo : Symbol(foo, Decl(cachedContextualTypes.ts, 5, 21))
+>bar : Symbol(bar, Decl(cachedContextualTypes.ts, 6, 12))
+
+    };
+}
+
+class MenuWorkbenchToolBar {
+>MenuWorkbenchToolBar : Symbol(MenuWorkbenchToolBar, Decl(cachedContextualTypes.ts, 8, 1))
+
+    constructor(
+        options: IMenuWorkbenchToolBarOptions | undefined,
+>options : Symbol(options, Decl(cachedContextualTypes.ts, 11, 16))
+>IMenuWorkbenchToolBarOptions : Symbol(IMenuWorkbenchToolBarOptions, Decl(cachedContextualTypes.ts, 2, 157))
+
+    ) { }
+}
+
+createInstance(MenuWorkbenchToolBar, {
+>createInstance : Symbol(createInstance, Decl(cachedContextualTypes.ts, 0, 0))
+>MenuWorkbenchToolBar : Symbol(MenuWorkbenchToolBar, Decl(cachedContextualTypes.ts, 8, 1))
+
+    toolbarOptions: {
+>toolbarOptions : Symbol(toolbarOptions, Decl(cachedContextualTypes.ts, 16, 38))
+
+        foo(bar) { return bar; }
+>foo : Symbol(foo, Decl(cachedContextualTypes.ts, 17, 21))
+>bar : Symbol(bar, Decl(cachedContextualTypes.ts, 18, 12))
+>bar : Symbol(bar, Decl(cachedContextualTypes.ts, 18, 12))
+    }
+});
+
diff --git a/tests/baselines/reference/cachedContextualTypes.types b/tests/baselines/reference/cachedContextualTypes.types
new file mode 100644
index 00000000000..c91f9c7720c
--- /dev/null
+++ b/tests/baselines/reference/cachedContextualTypes.types
@@ -0,0 +1,47 @@
+=== tests/cases/compiler/cachedContextualTypes.ts ===
+// Repro from #52198
+
+declare function createInstance<Ctor extends new (...args: any[]) => any, R extends InstanceType<Ctor>>(ctor: Ctor, ...args: ConstructorParameters<Ctor>): R;
+>createInstance : <Ctor extends new (...args: any[]) => any, R extends InstanceType<Ctor>>(ctor: Ctor, ...args: ConstructorParameters<Ctor>) => R
+>args : any[]
+>ctor : Ctor
+>args : ConstructorParameters<Ctor>
+
+export interface IMenuWorkbenchToolBarOptions {
+    toolbarOptions: {
+>toolbarOptions : { foo(bar: string): string; }
+
+        foo(bar: string): string
+>foo : (bar: string) => string
+>bar : string
+
+    };
+}
+
+class MenuWorkbenchToolBar {
+>MenuWorkbenchToolBar : MenuWorkbenchToolBar
+
+    constructor(
+        options: IMenuWorkbenchToolBarOptions | undefined,
+>options : IMenuWorkbenchToolBarOptions | undefined
+
+    ) { }
+}
+
+createInstance(MenuWorkbenchToolBar, {
+>createInstance(MenuWorkbenchToolBar, {    toolbarOptions: {        foo(bar) { return bar; }    }}) : MenuWorkbenchToolBar
+>createInstance : <Ctor extends new (...args: any[]) => any, R extends InstanceType<Ctor>>(ctor: Ctor, ...args: ConstructorParameters<Ctor>) => R
+>MenuWorkbenchToolBar : typeof MenuWorkbenchToolBar
+>{    toolbarOptions: {        foo(bar) { return bar; }    }} : { toolbarOptions: { foo(bar: string): string; }; }
+
+    toolbarOptions: {
+>toolbarOptions : { foo(bar: string): string; }
+>{        foo(bar) { return bar; }    } : { foo(bar: string): string; }
+
+        foo(bar) { return bar; }
+>foo : (bar: string) => string
+>bar : string
+>bar : string
+    }
+});
+
diff --git a/tests/cases/compiler/cachedContextualTypes.ts b/tests/cases/compiler/cachedContextualTypes.ts
new file mode 100644
index 00000000000..bad3c08ccd4
--- /dev/null
+++ b/tests/cases/compiler/cachedContextualTypes.ts
@@ -0,0 +1,23 @@
+// @strict: true
+
+// Repro from #52198
+
+declare function createInstance<Ctor extends new (...args: any[]) => any, R extends InstanceType<Ctor>>(ctor: Ctor, ...args: ConstructorParameters<Ctor>): R;
+
+export interface IMenuWorkbenchToolBarOptions {
+    toolbarOptions: {
+        foo(bar: string): string
+    };
+}
+
+class MenuWorkbenchToolBar {
+    constructor(
+        options: IMenuWorkbenchToolBarOptions | undefined,
+    ) { }
+}
+
+createInstance(MenuWorkbenchToolBar, {
+    toolbarOptions: {
+        foo(bar) { return bar; }
+    }
+});