diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 2506e4632d893..2ccb41ae04218 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -19114,8 +19114,13 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
     }
 
     function hasContextSensitiveReturnExpression(node: FunctionLikeDeclaration) {
-        // TODO(anhans): A block should be context-sensitive if it has a context-sensitive return value.
-        return !node.typeParameters && !getEffectiveReturnTypeNode(node) && !!node.body && node.body.kind !== SyntaxKind.Block && isContextSensitive(node.body);
+        if (node.typeParameters || getEffectiveReturnTypeNode(node) || !node.body) {
+            return false;
+        }
+        if (node.body.kind !== SyntaxKind.Block) {
+            return isContextSensitive(node.body);
+        }
+        return !!forEachReturnStatement(node.body as Block, (statement) => !!statement.expression && isContextSensitive(statement.expression));
     }
 
     function isContextSensitiveFunctionOrObjectLiteralMethod(func: Node): func is FunctionExpression | ArrowFunction | MethodDeclaration {
diff --git a/tests/baselines/reference/inferPropertyWithContextSensitiveReturnStatement.symbols b/tests/baselines/reference/inferPropertyWithContextSensitiveReturnStatement.symbols
new file mode 100644
index 0000000000000..1947ea8f7d120
--- /dev/null
+++ b/tests/baselines/reference/inferPropertyWithContextSensitiveReturnStatement.symbols
@@ -0,0 +1,32 @@
+=== tests/cases/compiler/inferPropertyWithContextSensitiveReturnStatement.ts ===
+// repro #50687
+
+declare function repro<T>(config: {
+>repro : Symbol(repro, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 0, 0))
+>T : Symbol(T, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 2, 23))
+>config : Symbol(config, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 2, 26))
+
+  params: T;
+>params : Symbol(params, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 2, 35))
+>T : Symbol(T, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 2, 23))
+
+  callback: () => (params: T) => number;
+>callback : Symbol(callback, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 3, 12))
+>params : Symbol(params, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 4, 19))
+>T : Symbol(T, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 2, 23))
+
+}): void;
+
+repro({
+>repro : Symbol(repro, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 0, 0))
+
+  params: 1,
+>params : Symbol(params, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 7, 7))
+
+  callback: () => { return a => a + 1 },
+>callback : Symbol(callback, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 8, 12))
+>a : Symbol(a, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 9, 26))
+>a : Symbol(a, Decl(inferPropertyWithContextSensitiveReturnStatement.ts, 9, 26))
+
+});
+
diff --git a/tests/baselines/reference/inferPropertyWithContextSensitiveReturnStatement.types b/tests/baselines/reference/inferPropertyWithContextSensitiveReturnStatement.types
new file mode 100644
index 0000000000000..24383ff66feaa
--- /dev/null
+++ b/tests/baselines/reference/inferPropertyWithContextSensitiveReturnStatement.types
@@ -0,0 +1,36 @@
+=== tests/cases/compiler/inferPropertyWithContextSensitiveReturnStatement.ts ===
+// repro #50687
+
+declare function repro<T>(config: {
+>repro : <T>(config: { params: T; callback: () => (params: T) => number; }) => void
+>config : { params: T; callback: () => (params: T) => number; }
+
+  params: T;
+>params : T
+
+  callback: () => (params: T) => number;
+>callback : () => (params: T) => number
+>params : T
+
+}): void;
+
+repro({
+>repro({  params: 1,  callback: () => { return a => a + 1 },}) : void
+>repro : <T>(config: { params: T; callback: () => (params: T) => number; }) => void
+>{  params: 1,  callback: () => { return a => a + 1 },} : { params: number; callback: () => (a: number) => number; }
+
+  params: 1,
+>params : number
+>1 : 1
+
+  callback: () => { return a => a + 1 },
+>callback : () => (a: number) => number
+>() => { return a => a + 1 } : () => (a: number) => number
+>a => a + 1 : (a: number) => number
+>a : number
+>a + 1 : number
+>a : number
+>1 : 1
+
+});
+
diff --git a/tests/cases/compiler/inferPropertyWithContextSensitiveReturnStatement.ts b/tests/cases/compiler/inferPropertyWithContextSensitiveReturnStatement.ts
new file mode 100644
index 0000000000000..67bbed7bafcc3
--- /dev/null
+++ b/tests/cases/compiler/inferPropertyWithContextSensitiveReturnStatement.ts
@@ -0,0 +1,15 @@
+// @noEmit: true
+// @strict: true
+
+
+// repro #50687
+
+declare function repro<T>(config: {
+  params: T;
+  callback: () => (params: T) => number;
+}): void;
+
+repro({
+  params: 1,
+  callback: () => { return a => a + 1 },
+});