diff --git a/tests/cases/compiler/inferenceAndSelfReferentialConstraint.ts b/tests/cases/compiler/inferenceAndSelfReferentialConstraint.ts
new file mode 100644
index 00000000000..2d991a652c1
--- /dev/null
+++ b/tests/cases/compiler/inferenceAndSelfReferentialConstraint.ts
@@ -0,0 +1,29 @@
+// @strict
+
+// Repro from #29520
+
+type Test<K extends keyof any> = {
+  [P in K | "foo"]: P extends "foo" ? true : () => any
+}
+
+function test<T extends Test<keyof T>>(arg: T) {
+  return arg;
+}
+
+const res1 = test({
+  foo: true,
+  bar() {
+  }
+});
+
+const res2 = test({
+  foo: true,
+  bar: function () {
+  }
+});
+
+const res3 = test({
+  foo: true,
+  bar: () => {
+  }
+});