diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 3c48319273a..1e6a16aa75f 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -8466,15 +8466,19 @@ namespace ts {
             return result;
         }
 
-        function getTopConditionalType(node: Node): ConditionalTypeNode {
-            let result: ConditionalTypeNode;
+        function isPossiblyReferencedInConditionalType(tp: TypeParameter, node: Node) {
+            if (isTypeParameterPossiblyReferenced(tp, node)) {
+                return true;
+            }
             while (node) {
                 if (node.kind === SyntaxKind.ConditionalType) {
-                    result = <ConditionalTypeNode>node;
+                    if (isTypeParameterPossiblyReferenced(tp, (<ConditionalTypeNode>node).extendsType)) {
+                        return true;
+                    }
                 }
                 node = node.parent;
             }
-            return result;
+            return false;
         }
 
         function getTypeFromConditionalTypeNode(node: ConditionalTypeNode): Type {
@@ -8483,8 +8487,7 @@ namespace ts {
                 const checkType = getTypeFromTypeNode(node.checkType);
                 const aliasTypeArguments = getAliasTypeArgumentsForTypeNode(node);
                 const allOuterTypeParameters = getOuterTypeParameters(node, /*includeThisTypes*/ true);
-                const topNode = getTopConditionalType(node);
-                const outerTypeParameters = aliasTypeArguments ? allOuterTypeParameters : filter(allOuterTypeParameters, tp => isTypeParameterPossiblyReferenced(tp, topNode));
+                const outerTypeParameters = aliasTypeArguments ? allOuterTypeParameters : filter(allOuterTypeParameters, tp => isPossiblyReferencedInConditionalType(tp, node));
                 const root: ConditionalRoot = {
                     node,
                     checkType,
diff --git a/tests/baselines/reference/conditionalTypes2.errors.txt b/tests/baselines/reference/conditionalTypes2.errors.txt
index 7e12ca8523b..0e7844babc6 100644
--- a/tests/baselines/reference/conditionalTypes2.errors.txt
+++ b/tests/baselines/reference/conditionalTypes2.errors.txt
@@ -176,4 +176,19 @@ tests/cases/conformance/types/conditional/conditionalTypes2.ts(75,12): error TS2
             toString2(value);
         }
     }
+    
+    // Repro from #23052
+    
+    type A<T, V, E> =
+      T extends object
+        ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: A<T[Q], V, E>; }
+        : T extends V ? T : never;
+    
+    type B<T, V> =
+      T extends object
+        ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: B<T[Q], V>; }
+        : T extends V ? T : never;
+    
+    type C<T, V, E> =
+      { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: C<T[Q], V, E>; };
     
\ No newline at end of file
diff --git a/tests/baselines/reference/conditionalTypes2.js b/tests/baselines/reference/conditionalTypes2.js
index ee2c1fe27fb..7afb39d42bb 100644
--- a/tests/baselines/reference/conditionalTypes2.js
+++ b/tests/baselines/reference/conditionalTypes2.js
@@ -119,6 +119,21 @@ function foo<T>(value: T) {
         toString2(value);
     }
 }
+
+// Repro from #23052
+
+type A<T, V, E> =
+  T extends object
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: A<T[Q], V, E>; }
+    : T extends V ? T : never;
+
+type B<T, V> =
+  T extends object
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: B<T[Q], V>; }
+    : T extends V ? T : never;
+
+type C<T, V, E> =
+  { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: C<T[Q], V, E>; };
 
 
 //// [conditionalTypes2.js]
@@ -254,3 +269,18 @@ interface B1<T> extends A1<T> {
 declare function toString1(value: object | Function): string;
 declare function toString2(value: Function): string;
 declare function foo<T>(value: T): void;
+declare type A<T, V, E> = T extends object ? {
+    [Q in {
+        [P in keyof T]: T[P] extends V ? P : P;
+    }[keyof T]]: A<T[Q], V, E>;
+} : T extends V ? T : never;
+declare type B<T, V> = T extends object ? {
+    [Q in {
+        [P in keyof T]: T[P] extends V ? P : P;
+    }[keyof T]]: B<T[Q], V>;
+} : T extends V ? T : never;
+declare type C<T, V, E> = {
+    [Q in {
+        [P in keyof T]: T[P] extends V ? P : P;
+    }[keyof T]]: C<T[Q], V, E>;
+};
diff --git a/tests/baselines/reference/conditionalTypes2.symbols b/tests/baselines/reference/conditionalTypes2.symbols
index ef58dc6229c..00509458253 100644
--- a/tests/baselines/reference/conditionalTypes2.symbols
+++ b/tests/baselines/reference/conditionalTypes2.symbols
@@ -414,3 +414,85 @@ function foo<T>(value: T) {
     }
 }
 
+// Repro from #23052
+
+type A<T, V, E> =
+>A : Symbol(A, Decl(conditionalTypes2.ts, 119, 1))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 123, 9))
+>E : Symbol(E, Decl(conditionalTypes2.ts, 123, 12))
+
+  T extends object
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: A<T[Q], V, E>; }
+>Q : Symbol(Q, Decl(conditionalTypes2.ts, 125, 9))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 125, 17))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 125, 17))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 123, 9))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 125, 17))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 125, 17))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+>A : Symbol(A, Decl(conditionalTypes2.ts, 119, 1))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+>Q : Symbol(Q, Decl(conditionalTypes2.ts, 125, 9))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 123, 9))
+>E : Symbol(E, Decl(conditionalTypes2.ts, 123, 12))
+
+    : T extends V ? T : never;
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 123, 9))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 123, 7))
+
+type B<T, V> =
+>B : Symbol(B, Decl(conditionalTypes2.ts, 126, 30))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 128, 9))
+
+  T extends object
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: B<T[Q], V>; }
+>Q : Symbol(Q, Decl(conditionalTypes2.ts, 130, 9))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 130, 17))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 130, 17))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 128, 9))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 130, 17))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 130, 17))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+>B : Symbol(B, Decl(conditionalTypes2.ts, 126, 30))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+>Q : Symbol(Q, Decl(conditionalTypes2.ts, 130, 9))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 128, 9))
+
+    : T extends V ? T : never;
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 128, 9))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 128, 7))
+
+type C<T, V, E> =
+>C : Symbol(C, Decl(conditionalTypes2.ts, 131, 30))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 133, 7))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 133, 9))
+>E : Symbol(E, Decl(conditionalTypes2.ts, 133, 12))
+
+  { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: C<T[Q], V, E>; };
+>Q : Symbol(Q, Decl(conditionalTypes2.ts, 134, 5))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 134, 13))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 133, 7))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 133, 7))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 134, 13))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 133, 9))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 134, 13))
+>P : Symbol(P, Decl(conditionalTypes2.ts, 134, 13))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 133, 7))
+>C : Symbol(C, Decl(conditionalTypes2.ts, 131, 30))
+>T : Symbol(T, Decl(conditionalTypes2.ts, 133, 7))
+>Q : Symbol(Q, Decl(conditionalTypes2.ts, 134, 5))
+>V : Symbol(V, Decl(conditionalTypes2.ts, 133, 9))
+>E : Symbol(E, Decl(conditionalTypes2.ts, 133, 12))
+
diff --git a/tests/baselines/reference/conditionalTypes2.types b/tests/baselines/reference/conditionalTypes2.types
index 249c05f1ad3..5af4de235c8 100644
--- a/tests/baselines/reference/conditionalTypes2.types
+++ b/tests/baselines/reference/conditionalTypes2.types
@@ -444,3 +444,85 @@ function foo<T>(value: T) {
     }
 }
 
+// Repro from #23052
+
+type A<T, V, E> =
+>A : A<T, V, E>
+>T : T
+>V : V
+>E : E
+
+  T extends object
+>T : T
+
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: A<T[Q], V, E>; }
+>Q : Q
+>P : P
+>T : T
+>T : T
+>P : P
+>V : V
+>P : P
+>P : P
+>T : T
+>A : A<T, V, E>
+>T : T
+>Q : Q
+>V : V
+>E : E
+
+    : T extends V ? T : never;
+>T : T
+>V : V
+>T : T
+
+type B<T, V> =
+>B : B<T, V>
+>T : T
+>V : V
+
+  T extends object
+>T : T
+
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: B<T[Q], V>; }
+>Q : Q
+>P : P
+>T : T
+>T : T
+>P : P
+>V : V
+>P : P
+>P : P
+>T : T
+>B : B<T, V>
+>T : T
+>Q : Q
+>V : V
+
+    : T extends V ? T : never;
+>T : T
+>V : V
+>T : T
+
+type C<T, V, E> =
+>C : C<T, V, E>
+>T : T
+>V : V
+>E : E
+
+  { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: C<T[Q], V, E>; };
+>Q : Q
+>P : P
+>T : T
+>T : T
+>P : P
+>V : V
+>P : P
+>P : P
+>T : T
+>C : C<T, V, E>
+>T : T
+>Q : Q
+>V : V
+>E : E
+
diff --git a/tests/cases/conformance/types/conditional/conditionalTypes2.ts b/tests/cases/conformance/types/conditional/conditionalTypes2.ts
index c3418cf924d..4002ab6a0a7 100644
--- a/tests/cases/conformance/types/conditional/conditionalTypes2.ts
+++ b/tests/cases/conformance/types/conditional/conditionalTypes2.ts
@@ -121,3 +121,18 @@ function foo<T>(value: T) {
         toString2(value);
     }
 }
+
+// Repro from #23052
+
+type A<T, V, E> =
+  T extends object
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: A<T[Q], V, E>; }
+    : T extends V ? T : never;
+
+type B<T, V> =
+  T extends object
+    ? { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: B<T[Q], V>; }
+    : T extends V ? T : never;
+
+type C<T, V, E> =
+  { [Q in { [P in keyof T]: T[P] extends V ? P : P; }[keyof T]]: C<T[Q], V, E>; };