diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index ea86fc74de347..8f1b691832022 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -34776,7 +34776,7 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
         // use the resolvingSignature singleton to indicate that we deferred processing. This result will be
         // propagated out and eventually turned into silentNeverType (a type that is assignable to anything and
         // from which we never make inferences).
-        if (checkMode & CheckMode.SkipGenericFunctions && !node.typeArguments && callSignatures.some(isGenericFunctionReturningFunction)) {
+        if (checkMode & CheckMode.SkipGenericFunctions && !node.typeArguments && callSignatures.some(isGenericFunctionReturningFunctionOrConstructor)) {
             skippedGenericFunction(node, checkMode);
             return resolvingSignature;
         }
@@ -34789,8 +34789,12 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
         return resolveCall(node, callSignatures, candidatesOutArray, checkMode, callChainFlags);
     }
 
-    function isGenericFunctionReturningFunction(signature: Signature) {
-        return !!(signature.typeParameters && isFunctionType(getReturnTypeOfSignature(signature)));
+    function isGenericFunctionReturningFunctionOrConstructor(signature: Signature) {
+        if (!signature.typeParameters) {
+            return false;
+        }
+        const returnType = getReturnTypeOfSignature(signature);
+        return isFunctionType(returnType) || isConstructorType(returnType);
     }
 
     /**
diff --git a/tests/baselines/reference/inferenceGenericNestedCallReturningConstructor.symbols b/tests/baselines/reference/inferenceGenericNestedCallReturningConstructor.symbols
new file mode 100644
index 0000000000000..03e0bcb9f168b
--- /dev/null
+++ b/tests/baselines/reference/inferenceGenericNestedCallReturningConstructor.symbols
@@ -0,0 +1,72 @@
+//// [tests/cases/compiler/inferenceGenericNestedCallReturningConstructor.ts] ////
+
+=== inferenceGenericNestedCallReturningConstructor.ts ===
+interface Action<TContext> {
+>Action : Symbol(Action, Decl(inferenceGenericNestedCallReturningConstructor.ts, 0, 0))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 0, 17))
+
+  new (ctx: TContext): void;
+>ctx : Symbol(ctx, Decl(inferenceGenericNestedCallReturningConstructor.ts, 1, 7))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 0, 17))
+}
+
+declare class AssignAction<TContext> {
+>AssignAction : Symbol(AssignAction, Decl(inferenceGenericNestedCallReturningConstructor.ts, 2, 1))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 4, 27))
+
+  constructor(ctx: TContext);
+>ctx : Symbol(ctx, Decl(inferenceGenericNestedCallReturningConstructor.ts, 5, 14))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 4, 27))
+}
+
+declare function assign<TContext>(
+>assign : Symbol(assign, Decl(inferenceGenericNestedCallReturningConstructor.ts, 6, 1))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 8, 24))
+
+  assigner: (ctx: TContext) => void
+>assigner : Symbol(assigner, Decl(inferenceGenericNestedCallReturningConstructor.ts, 8, 34))
+>ctx : Symbol(ctx, Decl(inferenceGenericNestedCallReturningConstructor.ts, 9, 13))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 8, 24))
+
+): {
+  new (ctx: TContext): AssignAction<TContext>;
+>ctx : Symbol(ctx, Decl(inferenceGenericNestedCallReturningConstructor.ts, 11, 7))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 8, 24))
+>AssignAction : Symbol(AssignAction, Decl(inferenceGenericNestedCallReturningConstructor.ts, 2, 1))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 8, 24))
+}
+
+declare function createMachine<TContext>(config: {
+>createMachine : Symbol(createMachine, Decl(inferenceGenericNestedCallReturningConstructor.ts, 12, 1))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 14, 31))
+>config : Symbol(config, Decl(inferenceGenericNestedCallReturningConstructor.ts, 14, 41))
+
+  context: TContext;
+>context : Symbol(context, Decl(inferenceGenericNestedCallReturningConstructor.ts, 14, 50))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 14, 31))
+
+  entry: Action<TContext>;
+>entry : Symbol(entry, Decl(inferenceGenericNestedCallReturningConstructor.ts, 15, 20))
+>Action : Symbol(Action, Decl(inferenceGenericNestedCallReturningConstructor.ts, 0, 0))
+>TContext : Symbol(TContext, Decl(inferenceGenericNestedCallReturningConstructor.ts, 14, 31))
+
+}): void;
+
+createMachine({
+>createMachine : Symbol(createMachine, Decl(inferenceGenericNestedCallReturningConstructor.ts, 12, 1))
+
+  context: { count: 0 },
+>context : Symbol(context, Decl(inferenceGenericNestedCallReturningConstructor.ts, 19, 15))
+>count : Symbol(count, Decl(inferenceGenericNestedCallReturningConstructor.ts, 20, 12))
+
+  entry: assign((ctx) => {
+>entry : Symbol(entry, Decl(inferenceGenericNestedCallReturningConstructor.ts, 20, 24))
+>assign : Symbol(assign, Decl(inferenceGenericNestedCallReturningConstructor.ts, 6, 1))
+>ctx : Symbol(ctx, Decl(inferenceGenericNestedCallReturningConstructor.ts, 21, 17))
+
+    ctx // { count: number }
+>ctx : Symbol(ctx, Decl(inferenceGenericNestedCallReturningConstructor.ts, 21, 17))
+
+  }),
+});
+
diff --git a/tests/baselines/reference/inferenceGenericNestedCallReturningConstructor.types b/tests/baselines/reference/inferenceGenericNestedCallReturningConstructor.types
new file mode 100644
index 0000000000000..ce6d09b4d3281
--- /dev/null
+++ b/tests/baselines/reference/inferenceGenericNestedCallReturningConstructor.types
@@ -0,0 +1,63 @@
+//// [tests/cases/compiler/inferenceGenericNestedCallReturningConstructor.ts] ////
+
+=== inferenceGenericNestedCallReturningConstructor.ts ===
+interface Action<TContext> {
+  new (ctx: TContext): void;
+>ctx : TContext
+}
+
+declare class AssignAction<TContext> {
+>AssignAction : AssignAction<TContext>
+
+  constructor(ctx: TContext);
+>ctx : TContext
+}
+
+declare function assign<TContext>(
+>assign : <TContext>(assigner: (ctx: TContext) => void) => new (ctx: TContext) => AssignAction<TContext>
+
+  assigner: (ctx: TContext) => void
+>assigner : (ctx: TContext) => void
+>ctx : TContext
+
+): {
+  new (ctx: TContext): AssignAction<TContext>;
+>ctx : TContext
+}
+
+declare function createMachine<TContext>(config: {
+>createMachine : <TContext>(config: {    context: TContext;    entry: Action<TContext>;}) => void
+>config : { context: TContext; entry: Action<TContext>; }
+
+  context: TContext;
+>context : TContext
+
+  entry: Action<TContext>;
+>entry : Action<TContext>
+
+}): void;
+
+createMachine({
+>createMachine({  context: { count: 0 },  entry: assign((ctx) => {    ctx // { count: number }  }),}) : void
+>createMachine : <TContext>(config: { context: TContext; entry: Action<TContext>; }) => void
+>{  context: { count: 0 },  entry: assign((ctx) => {    ctx // { count: number }  }),} : { context: { count: number; }; entry: new (ctx: { count: number; }) => AssignAction<{ count: number; }>; }
+
+  context: { count: 0 },
+>context : { count: number; }
+>{ count: 0 } : { count: number; }
+>count : number
+>0 : 0
+
+  entry: assign((ctx) => {
+>entry : new (ctx: { count: number; }) => AssignAction<{ count: number; }>
+>assign((ctx) => {    ctx // { count: number }  }) : new (ctx: { count: number; }) => AssignAction<{ count: number; }>
+>assign : <TContext>(assigner: (ctx: TContext) => void) => new (ctx: TContext) => AssignAction<TContext>
+>(ctx) => {    ctx // { count: number }  } : (ctx: { count: number; }) => void
+>ctx : { count: number; }
+
+    ctx // { count: number }
+>ctx : { count: number; }
+
+  }),
+});
+
diff --git a/tests/cases/compiler/inferenceGenericNestedCallReturningConstructor.ts b/tests/cases/compiler/inferenceGenericNestedCallReturningConstructor.ts
new file mode 100644
index 0000000000000..8c1ea32096284
--- /dev/null
+++ b/tests/cases/compiler/inferenceGenericNestedCallReturningConstructor.ts
@@ -0,0 +1,28 @@
+// @strict: true
+// @noEmit: true
+
+interface Action<TContext> {
+  new (ctx: TContext): void;
+}
+
+declare class AssignAction<TContext> {
+  constructor(ctx: TContext);
+}
+
+declare function assign<TContext>(
+  assigner: (ctx: TContext) => void
+): {
+  new (ctx: TContext): AssignAction<TContext>;
+}
+
+declare function createMachine<TContext>(config: {
+  context: TContext;
+  entry: Action<TContext>;
+}): void;
+
+createMachine({
+  context: { count: 0 },
+  entry: assign((ctx) => {
+    ctx // { count: number }
+  }),
+});