diff --git a/src/compiler/transformers/declarations.ts b/src/compiler/transformers/declarations.ts
index bfbd4d44712..3a3e237c5ea 100644
--- a/src/compiler/transformers/declarations.ts
+++ b/src/compiler/transformers/declarations.ts
@@ -1163,6 +1163,9 @@ namespace ts {
         }
 
         function transformTopLevelDeclaration(input: LateVisibilityPaintedStatement) {
+            if (lateMarkedStatements) {
+                while (orderedRemoveItem(lateMarkedStatements, input));
+            }
             if (shouldStripInternal(input)) return;
             switch (input.kind) {
                 case SyntaxKind.ImportEqualsDeclaration: {
diff --git a/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.js b/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.js
new file mode 100644
index 00000000000..19319bc28e3
--- /dev/null
+++ b/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.js
@@ -0,0 +1,38 @@
+//// [declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts]
+export interface Foo {
+    item: Bar;
+}
+
+interface Bar {
+    baz(): void;
+}
+
+namespace Bar {
+    export function biz() {
+        return 0;
+    }
+}
+
+//// [declarationEmitNamespaceMergedWithInterfaceNestedFunction.js]
+"use strict";
+exports.__esModule = true;
+var Bar;
+(function (Bar) {
+    function biz() {
+        return 0;
+    }
+    Bar.biz = biz;
+})(Bar || (Bar = {}));
+
+
+//// [declarationEmitNamespaceMergedWithInterfaceNestedFunction.d.ts]
+export interface Foo {
+    item: Bar;
+}
+interface Bar {
+    baz(): void;
+}
+declare namespace Bar {
+    function biz(): number;
+}
+export {};
diff --git a/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.symbols b/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.symbols
new file mode 100644
index 00000000000..45afcfb0df0
--- /dev/null
+++ b/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.symbols
@@ -0,0 +1,25 @@
+=== tests/cases/compiler/declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts ===
+export interface Foo {
+>Foo : Symbol(Foo, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 0, 0))
+
+    item: Bar;
+>item : Symbol(Foo.item, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 0, 22))
+>Bar : Symbol(Bar, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 2, 1), Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 6, 1))
+}
+
+interface Bar {
+>Bar : Symbol(Bar, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 2, 1), Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 6, 1))
+
+    baz(): void;
+>baz : Symbol(Bar.baz, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 4, 15))
+}
+
+namespace Bar {
+>Bar : Symbol(Bar, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 2, 1), Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 6, 1))
+
+    export function biz() {
+>biz : Symbol(biz, Decl(declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts, 8, 15))
+
+        return 0;
+    }
+}
diff --git a/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.types b/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.types
new file mode 100644
index 00000000000..c6df96fb5a0
--- /dev/null
+++ b/tests/baselines/reference/declarationEmitNamespaceMergedWithInterfaceNestedFunction.types
@@ -0,0 +1,21 @@
+=== tests/cases/compiler/declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts ===
+export interface Foo {
+    item: Bar;
+>item : Bar
+}
+
+interface Bar {
+    baz(): void;
+>baz : () => void
+}
+
+namespace Bar {
+>Bar : typeof Bar
+
+    export function biz() {
+>biz : () => number
+
+        return 0;
+>0 : 0
+    }
+}
diff --git a/tests/cases/compiler/declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts b/tests/cases/compiler/declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts
new file mode 100644
index 00000000000..2de252c9b1e
--- /dev/null
+++ b/tests/cases/compiler/declarationEmitNamespaceMergedWithInterfaceNestedFunction.ts
@@ -0,0 +1,14 @@
+// @declaration: true
+export interface Foo {
+    item: Bar;
+}
+
+interface Bar {
+    baz(): void;
+}
+
+namespace Bar {
+    export function biz() {
+        return 0;
+    }
+}
\ No newline at end of file