diff --git a/changelog.d/8240.misc b/changelog.d/8240.misc
new file mode 100644
index 000000000000..acfbd89e2402
--- /dev/null
+++ b/changelog.d/8240.misc
@@ -0,0 +1 @@
+Fix type hints for functions decorated with `@cached`.
diff --git a/mypy.ini b/mypy.ini
index ae3290d5bbf1..8a351eabfebb 100644
--- a/mypy.ini
+++ b/mypy.ini
@@ -1,6 +1,6 @@
 [mypy]
 namespace_packages = True
-plugins = mypy_zope:plugin
+plugins = mypy_zope:plugin, scripts-dev/mypy_synapse_plugin.py
 follow_imports = silent
 check_untyped_defs = True
 show_error_codes = True
@@ -51,6 +51,7 @@ files =
   synapse/storage/util,
   synapse/streams,
   synapse/types.py,
+  synapse/util/caches/descriptors.py,
   synapse/util/caches/stream_change_cache.py,
   synapse/util/metrics.py,
   tests/replication,
diff --git a/scripts-dev/mypy_synapse_plugin.py b/scripts-dev/mypy_synapse_plugin.py
new file mode 100644
index 000000000000..a5b88731f172
--- /dev/null
+++ b/scripts-dev/mypy_synapse_plugin.py
@@ -0,0 +1,85 @@
+# -*- coding: utf-8 -*-
+# Copyright 2020 The Matrix.org Foundation C.I.C.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+"""This is a mypy plugin for Synpase to deal with some of the funky typing that
+can crop up, e.g the cache descriptors.
+"""
+
+from typing import Callable, Optional
+
+from mypy.plugin import MethodSigContext, Plugin
+from mypy.typeops import bind_self
+from mypy.types import CallableType
+
+
+class SynapsePlugin(Plugin):
+    def get_method_signature_hook(
+        self, fullname: str
+    ) -> Optional[Callable[[MethodSigContext], CallableType]]:
+        if fullname.startswith(
+            "synapse.util.caches.descriptors._CachedFunction.__call__"
+        ):
+            return cached_function_method_signature
+        return None
+
+
+def cached_function_method_signature(ctx: MethodSigContext) -> CallableType:
+    """Fixes the `_CachedFunction.__call__` signature to be correct.
+
+    It already has *almost* the correct signature, except:
+
+        1. the `self` argument needs to be marked as "bound"; and
+        2. any `cache_context` argument should be removed.
+    """
+
+    # First we mark this as a bound function signature.
+    signature = bind_self(ctx.default_signature)
+
+    # Secondly, we remove any "cache_context" args.
+    #
+    # Note: We should be only doing this if `cache_context=True` is set, but if
+    # it isn't then the code will raise an exception when its called anyway, so
+    # its not the end of the world.
+    context_arg_index = None
+    for idx, name in enumerate(signature.arg_names):
+        if name == "cache_context":
+            context_arg_index = idx
+            break
+
+    if context_arg_index:
+        arg_types = list(signature.arg_types)
+        arg_types.pop(context_arg_index)
+
+        arg_names = list(signature.arg_names)
+        arg_names.pop(context_arg_index)
+
+        arg_kinds = list(signature.arg_kinds)
+        arg_kinds.pop(context_arg_index)
+
+        signature = signature.copy_modified(
+            arg_types=arg_types, arg_names=arg_names, arg_kinds=arg_kinds,
+        )
+
+    return signature
+
+
+def plugin(version: str):
+    # This is the entry point of the plugin, and let's us deal with the fact
+    # that the mypy plugin interface is *not* stable by looking at the version
+    # string.
+    #
+    # However, since we pin the version of mypy Synapse uses in CI, we don't
+    # really care.
+    return SynapsePlugin
diff --git a/synapse/handlers/federation.py b/synapse/handlers/federation.py
index bd8efbb768db..310c7f7138c9 100644
--- a/synapse/handlers/federation.py
+++ b/synapse/handlers/federation.py
@@ -440,11 +440,11 @@ async def _get_missing_events_for_pdu(self, origin, pdu, prevs, min_depth):
         if not prevs - seen:
             return
 
-        latest = await self.store.get_latest_event_ids_in_room(room_id)
+        latest_list = await self.store.get_latest_event_ids_in_room(room_id)
 
         # We add the prev events that we have seen to the latest
         # list to ensure the remote server doesn't give them to us
-        latest = set(latest)
+        latest = set(latest_list)
         latest |= seen
 
         logger.info(
@@ -781,7 +781,7 @@ async def _process_received_pdu(
                     # keys across all devices.
                     current_keys = [
                         key
-                        for device in cached_devices
+                        for device in cached_devices.values()
                         for key in device.get("keys", {}).get("keys", {}).values()
                     ]
 
@@ -2119,8 +2119,8 @@ async def _check_for_soft_fail(
         if backfilled or event.internal_metadata.is_outlier():
             return
 
-        extrem_ids = await self.store.get_latest_event_ids_in_room(event.room_id)
-        extrem_ids = set(extrem_ids)
+        extrem_ids_list = await self.store.get_latest_event_ids_in_room(event.room_id)
+        extrem_ids = set(extrem_ids_list)
         prev_event_ids = set(event.prev_event_ids())
 
         if extrem_ids == prev_event_ids:
diff --git a/synapse/util/caches/descriptors.py b/synapse/util/caches/descriptors.py
index 49d9fddcf057..825810eb166c 100644
--- a/synapse/util/caches/descriptors.py
+++ b/synapse/util/caches/descriptors.py
@@ -18,11 +18,10 @@
 import inspect
 import logging
 import threading
-from typing import Any, Tuple, Union, cast
+from typing import Any, Callable, Generic, Optional, Tuple, TypeVar, Union, cast
 from weakref import WeakValueDictionary
 
 from prometheus_client import Gauge
-from typing_extensions import Protocol
 
 from twisted.internet import defer
 
@@ -38,8 +37,10 @@
 
 CacheKey = Union[Tuple, Any]
 
+F = TypeVar("F", bound=Callable[..., Any])
 
-class _CachedFunction(Protocol):
+
+class _CachedFunction(Generic[F]):
     invalidate = None  # type: Any
     invalidate_all = None  # type: Any
     invalidate_many = None  # type: Any
@@ -47,8 +48,11 @@ class _CachedFunction(Protocol):
     cache = None  # type: Any
     num_args = None  # type: Any
 
-    def __name__(self):
-        ...
+    __name__ = None  # type: str
+
+    # Note: This function signature is actually fiddled with by the synapse mypy
+    # plugin to a) make it a bound method, and b) remove any `cache_context` arg.
+    __call__ = None  # type: F
 
 
 cache_pending_metric = Gauge(
@@ -123,7 +127,7 @@ def __init__(
 
         self.name = name
         self.keylen = keylen
-        self.thread = None
+        self.thread = None  # type: Optional[threading.Thread]
         self.metrics = register_cache(
             "cache",
             name,
@@ -662,9 +666,13 @@ def get_instance(cls, cache, cache_key):  # type: (Cache, CacheKey) -> _CacheCon
 
 
 def cached(
-    max_entries=1000, num_args=None, tree=False, cache_context=False, iterable=False
-):
-    return lambda orig: CacheDescriptor(
+    max_entries: int = 1000,
+    num_args: Optional[int] = None,
+    tree: bool = False,
+    cache_context: bool = False,
+    iterable: bool = False,
+) -> Callable[[F], _CachedFunction[F]]:
+    func = lambda orig: CacheDescriptor(
         orig,
         max_entries=max_entries,
         num_args=num_args,
@@ -673,8 +681,12 @@ def cached(
         iterable=iterable,
     )
 
+    return cast(Callable[[F], _CachedFunction[F]], func)
 
-def cachedList(cached_method_name, list_name, num_args=None):
+
+def cachedList(
+    cached_method_name: str, list_name: str, num_args: Optional[int] = None
+) -> Callable[[F], _CachedFunction[F]]:
     """Creates a descriptor that wraps a function in a `CacheListDescriptor`.
 
     Used to do batch lookups for an already created cache. A single argument
@@ -684,11 +696,11 @@ def cachedList(cached_method_name, list_name, num_args=None):
     cache.
 
     Args:
-        cached_method_name (str): The name of the single-item lookup method.
+        cached_method_name: The name of the single-item lookup method.
             This is only used to find the cache to use.
-        list_name (str): The name of the argument that is the list to use to
+        list_name: The name of the argument that is the list to use to
             do batch lookups in the cache.
-        num_args (int): Number of arguments to use as the key in the cache
+        num_args: Number of arguments to use as the key in the cache
             (including list_name). Defaults to all named parameters.
 
     Example:
@@ -702,9 +714,11 @@ def do_something(self, first_arg):
             def batch_do_something(self, first_arg, second_args):
                 ...
     """
-    return lambda orig: CacheListDescriptor(
+    func = lambda orig: CacheListDescriptor(
         orig,
         cached_method_name=cached_method_name,
         list_name=list_name,
         num_args=num_args,
     )
+
+    return cast(Callable[[F], _CachedFunction[F]], func)