diff --git a/tests/baselines/reference/unionTypeReduction.js b/tests/baselines/reference/unionTypeReduction.js
new file mode 100644
index 00000000000..1c914489ecc
--- /dev/null
+++ b/tests/baselines/reference/unionTypeReduction.js
@@ -0,0 +1,25 @@
+//// [unionTypeReduction.ts]
+interface I2 {
+    (): number;
+    (q): boolean;
+}
+
+interface I3 {
+    (): number;
+}
+
+var i2: I2, i3: I3;
+
+var e1: I2 | I3;
+var e2 = i2 || i3;  // Type of e2 immediately reduced to I3
+
+var r1 = e1();  // Type of e1 reduced to I3 upon accessing property or signature
+var r2 = e2();
+
+
+//// [unionTypeReduction.js]
+var i2, i3;
+var e1;
+var e2 = i2 || i3; // Type of e2 immediately reduced to I3
+var r1 = e1(); // Type of e1 reduced to I3 upon accessing property or signature
+var r2 = e2();
diff --git a/tests/baselines/reference/unionTypeReduction.types b/tests/baselines/reference/unionTypeReduction.types
new file mode 100644
index 00000000000..073d690162a
--- /dev/null
+++ b/tests/baselines/reference/unionTypeReduction.types
@@ -0,0 +1,42 @@
+=== tests/cases/conformance/types/union/unionTypeReduction.ts ===
+interface I2 {
+>I2 : I2
+
+    (): number;
+    (q): boolean;
+>q : any
+}
+
+interface I3 {
+>I3 : I3
+
+    (): number;
+}
+
+var i2: I2, i3: I3;
+>i2 : I2
+>I2 : I2
+>i3 : I3
+>I3 : I3
+
+var e1: I2 | I3;
+>e1 : I2 | I3
+>I2 : I2
+>I3 : I3
+
+var e2 = i2 || i3;  // Type of e2 immediately reduced to I3
+>e2 : I3
+>i2 || i3 : I3
+>i2 : I2
+>i3 : I3
+
+var r1 = e1();  // Type of e1 reduced to I3 upon accessing property or signature
+>r1 : number
+>e1() : number
+>e1 : I2 | I3
+
+var r2 = e2();
+>r2 : number
+>e2() : number
+>e2 : I3
+
diff --git a/tests/cases/conformance/types/union/unionTypeReduction.ts b/tests/cases/conformance/types/union/unionTypeReduction.ts
new file mode 100644
index 00000000000..8bc3d1cdc8c
--- /dev/null
+++ b/tests/cases/conformance/types/union/unionTypeReduction.ts
@@ -0,0 +1,16 @@
+interface I2 {
+    (): number;
+    (q): boolean;
+}
+
+interface I3 {
+    (): number;
+}
+
+var i2: I2, i3: I3;
+
+var e1: I2 | I3;
+var e2 = i2 || i3;  // Type of e2 immediately reduced to I3
+
+var r1 = e1();  // Type of e1 reduced to I3 upon accessing property or signature
+var r2 = e2();