diff --git a/src/harness/unittests/extractConstants.ts b/src/harness/unittests/extractConstants.ts
index c09c00b34cf..71b550cba8f 100644
--- a/src/harness/unittests/extractConstants.ts
+++ b/src/harness/unittests/extractConstants.ts
@@ -267,6 +267,12 @@ namespace N { // Force this test to be TS-only
         testExtractConstant("extractConstant_ContextualType", `
 interface I { a: 1 | 2 | 3 }
 let i: I = [#|{ a: 1 }|];
+`);
+
+        testExtractConstant("extractConstant_ContextualType_Lambda", `
+const myObj: { member(x: number, y: string): void } = {
+    member: [#|(x, y) => x + y|],
+}
 `);
     });
 
diff --git a/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts b/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts
new file mode 100644
index 00000000000..d5a5a55bc27
--- /dev/null
+++ b/tests/baselines/reference/extractConstant/extractConstant_ContextualType_Lambda.ts
@@ -0,0 +1,11 @@
+// ==ORIGINAL==
+
+const myObj: { member(x: number, y: string): void } = {
+    member: /*[#|*/(x, y) => x + y/*|]*/,
+}
+
+// ==SCOPE::Extract to constant in enclosing scope==
+const newLocal: (x: number, y: string) => void = (x, y) => x + y;
+const myObj: { member(x: number, y: string): void } = {
+    member: /*RENAME*/newLocal,
+}