diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index ac77a64bb64..46cb8bb4937 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -15705,9 +15705,10 @@ namespace ts {
             //
             // For a decorator, no arguments are susceptible to contextual typing due to the fact
             // decorators are applied to a declaration by the emitter, and not to an expression.
+            const isSingleNonGenericCandidate = candidates.length === 1 && !candidates[0].typeParameters;
             let excludeArgument: boolean[];
             let excludeCount = 0;
-            if (!isDecorator) {
+            if (!isDecorator && !isSingleNonGenericCandidate) {
                 // We do not need to call `getEffectiveArgumentCount` here as it only
                 // applies when calculating the number of arguments for a decorator.
                 for (let i = isTaggedTemplate ? 1 : 0; i < args.length; i++) {
@@ -15860,6 +15861,19 @@ namespace ts {
             function chooseOverload(candidates: Signature[], relation: Map<RelationComparisonResult>, signatureHelpTrailingComma = false) {
                 candidateForArgumentError = undefined;
                 candidateForTypeArgumentError = undefined;
+
+                if (isSingleNonGenericCandidate) {
+                    const candidate = candidates[0];
+                    if (!hasCorrectArity(node, args, candidate, signatureHelpTrailingComma)) {
+                        return undefined;
+                    }
+                    if (!checkApplicableSignature(node, args, candidate, relation, excludeArgument, /*reportErrors*/ false)) {
+                        candidateForArgumentError = candidate;
+                        return undefined;
+                    }
+                    return candidate;
+                }
+
                 for (let candidateIndex = 0; candidateIndex < candidates.length; candidateIndex++) {
                     const originalCandidate = candidates[candidateIndex];
                     if (!hasCorrectArity(node, args, originalCandidate, signatureHelpTrailingComma)) {
@@ -15907,7 +15921,6 @@ namespace ts {
 
                 return undefined;
             }
-
         }
 
         function getLongestCandidateIndex(candidates: Signature[], argsCount: number): number {
diff --git a/tests/baselines/reference/contextualTypingFunctionReturningFunction.js b/tests/baselines/reference/contextualTypingFunctionReturningFunction.js
new file mode 100644
index 00000000000..31f89bdefd8
--- /dev/null
+++ b/tests/baselines/reference/contextualTypingFunctionReturningFunction.js
@@ -0,0 +1,19 @@
+//// [contextualTypingFunctionReturningFunction.ts]
+interface I {
+	a(s: string): void;
+	b(): (n: number) => void;
+}
+
+declare function f(i: I): void;
+
+f({
+	a: s => {},
+	b: () => n => {},
+});
+
+
+//// [contextualTypingFunctionReturningFunction.js]
+f({
+    a: function (s) { },
+    b: function () { return function (n) { }; }
+});
diff --git a/tests/baselines/reference/contextualTypingFunctionReturningFunction.symbols b/tests/baselines/reference/contextualTypingFunctionReturningFunction.symbols
new file mode 100644
index 00000000000..509c7129745
--- /dev/null
+++ b/tests/baselines/reference/contextualTypingFunctionReturningFunction.symbols
@@ -0,0 +1,31 @@
+=== tests/cases/compiler/contextualTypingFunctionReturningFunction.ts ===
+interface I {
+>I : Symbol(I, Decl(contextualTypingFunctionReturningFunction.ts, 0, 0))
+
+	a(s: string): void;
+>a : Symbol(I.a, Decl(contextualTypingFunctionReturningFunction.ts, 0, 13))
+>s : Symbol(s, Decl(contextualTypingFunctionReturningFunction.ts, 1, 3))
+
+	b(): (n: number) => void;
+>b : Symbol(I.b, Decl(contextualTypingFunctionReturningFunction.ts, 1, 20))
+>n : Symbol(n, Decl(contextualTypingFunctionReturningFunction.ts, 2, 7))
+}
+
+declare function f(i: I): void;
+>f : Symbol(f, Decl(contextualTypingFunctionReturningFunction.ts, 3, 1))
+>i : Symbol(i, Decl(contextualTypingFunctionReturningFunction.ts, 5, 19))
+>I : Symbol(I, Decl(contextualTypingFunctionReturningFunction.ts, 0, 0))
+
+f({
+>f : Symbol(f, Decl(contextualTypingFunctionReturningFunction.ts, 3, 1))
+
+	a: s => {},
+>a : Symbol(a, Decl(contextualTypingFunctionReturningFunction.ts, 7, 3))
+>s : Symbol(s, Decl(contextualTypingFunctionReturningFunction.ts, 8, 3))
+
+	b: () => n => {},
+>b : Symbol(b, Decl(contextualTypingFunctionReturningFunction.ts, 8, 12))
+>n : Symbol(n, Decl(contextualTypingFunctionReturningFunction.ts, 9, 9))
+
+});
+
diff --git a/tests/baselines/reference/contextualTypingFunctionReturningFunction.types b/tests/baselines/reference/contextualTypingFunctionReturningFunction.types
new file mode 100644
index 00000000000..8185819acf6
--- /dev/null
+++ b/tests/baselines/reference/contextualTypingFunctionReturningFunction.types
@@ -0,0 +1,36 @@
+=== tests/cases/compiler/contextualTypingFunctionReturningFunction.ts ===
+interface I {
+>I : I
+
+	a(s: string): void;
+>a : (s: string) => void
+>s : string
+
+	b(): (n: number) => void;
+>b : () => (n: number) => void
+>n : number
+}
+
+declare function f(i: I): void;
+>f : (i: I) => void
+>i : I
+>I : I
+
+f({
+>f({	a: s => {},	b: () => n => {},}) : void
+>f : (i: I) => void
+>{	a: s => {},	b: () => n => {},} : { a: (s: string) => void; b: () => (n: number) => void; }
+
+	a: s => {},
+>a : (s: string) => void
+>s => {} : (s: string) => void
+>s : string
+
+	b: () => n => {},
+>b : () => (n: number) => void
+>() => n => {} : () => (n: number) => void
+>n => {} : (n: number) => void
+>n : number
+
+});
+
diff --git a/tests/baselines/reference/invalidThisEmitInContextualObjectLiteral.types b/tests/baselines/reference/invalidThisEmitInContextualObjectLiteral.types
index 290b0a78eb2..8cb32eb84bd 100644
--- a/tests/baselines/reference/invalidThisEmitInContextualObjectLiteral.types
+++ b/tests/baselines/reference/invalidThisEmitInContextualObjectLiteral.types
@@ -25,7 +25,7 @@ class TestController {
 >this.m : (def: IDef) => void
 >this : this
 >m : (def: IDef) => void
->{		p1: e => { },		p2: () => { return vvvvvvvvv => this; },	} : { p1: (e: string) => void; p2: () => {}; }
+>{		p1: e => { },		p2: () => { return vvvvvvvvv => this; },	} : { p1: (e: string) => void; p2: () => (vvvvvvvvv: number) => this; }
 
 		p1: e => { },
 >p1 : (e: string) => void
@@ -33,8 +33,8 @@ class TestController {
 >e : string
 
 		p2: () => { return vvvvvvvvv => this; },
->p2 : () => {}
->() => { return vvvvvvvvv => this; } : () => {}
+>p2 : () => (vvvvvvvvv: number) => this
+>() => { return vvvvvvvvv => this; } : () => (vvvvvvvvv: number) => this
 >vvvvvvvvv => this : (vvvvvvvvv: number) => this
 >vvvvvvvvv : number
 >this : this
diff --git a/tests/cases/compiler/contextualTypingFunctionReturningFunction.ts b/tests/cases/compiler/contextualTypingFunctionReturningFunction.ts
new file mode 100644
index 00000000000..2b371937f5c
--- /dev/null
+++ b/tests/cases/compiler/contextualTypingFunctionReturningFunction.ts
@@ -0,0 +1,11 @@
+interface I {
+	a(s: string): void;
+	b(): (n: number) => void;
+}
+
+declare function f(i: I): void;
+
+f({
+	a: s => {},
+	b: () => n => {},
+});