diff --git a/mypy/checkexpr.py b/mypy/checkexpr.py
index e1beea078ca9..176ab8a9198d 100644
--- a/mypy/checkexpr.py
+++ b/mypy/checkexpr.py
@@ -248,6 +248,9 @@ def visit_call_expr_inner(self, e: CallExpr, allow_none_return: bool = False) ->
                     except KeyError:
                         # Undefined names should already be reported in semantic analysis.
                         pass
+                if is_expr_literal_type(typ):
+                    self.msg.cannot_use_function_with_type(e.callee.name, "Literal", e)
+                    continue
                 if ((isinstance(typ, IndexExpr)
                         and isinstance(typ.analyzed, (TypeApplication, TypeAliasExpr)))
                         or (isinstance(typ, NameExpr) and node and
@@ -255,9 +258,9 @@ def visit_call_expr_inner(self, e: CallExpr, allow_none_return: bool = False) ->
                     self.msg.type_arguments_not_allowed(e)
                 if isinstance(typ, RefExpr) and isinstance(typ.node, TypeInfo):
                     if typ.node.typeddict_type:
-                        self.msg.fail(messages.CANNOT_ISINSTANCE_TYPEDDICT, e)
+                        self.msg.cannot_use_function_with_type(e.callee.name, "TypedDict", e)
                     elif typ.node.is_newtype:
-                        self.msg.fail(messages.CANNOT_ISINSTANCE_NEWTYPE, e)
+                        self.msg.cannot_use_function_with_type(e.callee.name, "NewType", e)
         self.try_infer_partial_type(e)
         type_context = None
         if isinstance(e.callee, LambdaExpr):
@@ -3629,3 +3632,15 @@ def is_literal_type_like(t: Optional[Type]) -> bool:
         return any(is_literal_type_like(item) for item in t.items)
     else:
         return False
+
+
+def is_expr_literal_type(node: Expression) -> bool:
+    """Returns 'true' if the given node is a Literal"""
+    valid = ('typing.Literal', 'typing_extensions.Literal')
+    if isinstance(node, IndexExpr):
+        base = node.base
+        return isinstance(base, RefExpr) and base.fullname in valid
+    if isinstance(node, NameExpr):
+        underlying = node.node
+        return isinstance(underlying, TypeAlias) and isinstance(underlying.target, LiteralType)
+    return False
diff --git a/mypy/messages.py b/mypy/messages.py
index 6554d2dc163d..0bb754501a68 100644
--- a/mypy/messages.py
+++ b/mypy/messages.py
@@ -104,8 +104,6 @@
 DUPLICATE_TYPE_SIGNATURES = 'Function has duplicate type signatures'  # type: Final
 GENERIC_INSTANCE_VAR_CLASS_ACCESS = \
     'Access to generic instance variables via class is ambiguous'  # type: Final
-CANNOT_ISINSTANCE_TYPEDDICT = 'Cannot use isinstance() with a TypedDict type'  # type: Final
-CANNOT_ISINSTANCE_NEWTYPE = 'Cannot use isinstance() with a NewType type'  # type: Final
 BARE_GENERIC = 'Missing type parameters for generic type'  # type: Final
 IMPLICIT_GENERIC_ANY_BUILTIN = \
     'Implicit generic "Any". Use \'{}\' and specify generic parameters'  # type: Final
@@ -892,7 +890,9 @@ def incompatible_type_application(self, expected_arg_count: int,
     def alias_invalid_in_runtime_context(self, item: Type, ctx: Context) -> None:
         kind = (' to Callable' if isinstance(item, CallableType) else
                 ' to Tuple' if isinstance(item, TupleType) else
-                ' to Union' if isinstance(item, UnionType) else '')
+                ' to Union' if isinstance(item, UnionType) else
+                ' to Literal' if isinstance(item, LiteralType) else
+                '')
         self.fail('The type alias{} is invalid in runtime context'.format(kind), ctx)
 
     def could_not_infer_type_arguments(self, callee_type: CallableType, n: int,
@@ -1238,6 +1238,10 @@ def concrete_only_call(self, typ: Type, context: Context) -> None:
         self.fail("Only concrete class can be given where {} is expected"
                   .format(self.format(typ)), context)
 
+    def cannot_use_function_with_type(
+            self, method_name: str, type_name: str, context: Context) -> None:
+        self.fail("Cannot use {}() with a {} type".format(method_name, type_name), context)
+
     def report_non_method_protocol(self, tp: TypeInfo, members: List[str],
                                    context: Context) -> None:
         self.fail("Only protocols that don't have non-method members can be"
diff --git a/mypy/typeanal.py b/mypy/typeanal.py
index 0c79c11c10c6..c87b500776ed 100644
--- a/mypy/typeanal.py
+++ b/mypy/typeanal.py
@@ -45,6 +45,8 @@
     'typing.Tuple',
     'typing.Type',
     'typing.Union',
+    'typing.Literal',
+    'typing_extensions.Literal',
 }  # type: Final
 
 ARG_KINDS_BY_CONSTRUCTOR = {
diff --git a/test-data/unit/check-literal.test b/test-data/unit/check-literal.test
index c7f35c94ec5e..fbb50cad0d7c 100644
--- a/test-data/unit/check-literal.test
+++ b/test-data/unit/check-literal.test
@@ -336,8 +336,7 @@ d: 3j + 2            # E: invalid type comment or annotation
 
 [case testLiteralDisallowComplexNumbersTypeAlias]
 from typing_extensions import Literal
-at = Literal[3j]        # E: Invalid type alias \
-                        # E: The type "Type[Literal]" is not generic and not indexable
+at = Literal[3j]        # E: Invalid type alias
 a: at                   # E: Invalid type "__main__.at"
 [builtins fixtures/complex.pyi]
 [out]
@@ -367,8 +366,7 @@ c: [1, 2, 3]                    # E: Invalid type
 
 [case testLiteralDisallowCollectionsTypeAlias]
 from typing_extensions import Literal
-at = Literal[{"a": 1, "b": 2}]  # E: Invalid type alias \
-                                # E: The type "Type[Literal]" is not generic and not indexable
+at = Literal[{"a": 1, "b": 2}]  # E: Invalid type alias
 bt = {"a": 1, "b": 2}
 a: at                           # E: Invalid type "__main__.at"
 b: bt                           # E: Invalid type "__main__.bt"
@@ -377,8 +375,7 @@ b: bt                           # E: Invalid type "__main__.bt"
 
 [case testLiteralDisallowCollectionsTypeAlias2]
 from typing_extensions import Literal
-at = Literal[{1, 2, 3}]         # E: Invalid type alias \
-                                # E: The type "Type[Literal]" is not generic and not indexable
+at = Literal[{1, 2, 3}]         # E: Invalid type alias
 bt = {1, 2, 3}
 a: at                           # E: Invalid type "__main__.at"
 b: bt                           # E: Invalid type "__main__.bt"
@@ -1180,3 +1177,66 @@ b = b * a
 c = c.strip()  # E: Incompatible types in assignment (expression has type "str", variable has type "Literal['foo']")
 [builtins fixtures/ops.pyi]
 [out]
+
+
+--
+-- Tests that check we report errors when we try using Literal[...]
+-- in invalid places.
+--
+
+[case testLiteralErrorsWithIsInstanceAndIsSubclass]
+from typing_extensions import Literal
+from typing_extensions import Literal as Renamed
+import typing_extensions as indirect
+
+Alias = Literal[3]
+
+isinstance(3, Literal[3])           # E: Cannot use isinstance() with a Literal type
+isinstance(3, Alias)                # E: Cannot use isinstance() with a Literal type \
+                                    # E: The type alias to Literal is invalid in runtime context
+isinstance(3, Renamed[3])           # E: Cannot use isinstance() with a Literal type
+isinstance(3, indirect.Literal[3])  # E: Cannot use isinstance() with a Literal type
+
+issubclass(int, Literal[3])           # E: Cannot use issubclass() with a Literal type
+issubclass(int, Alias)                # E: Cannot use issubclass() with a Literal type \
+                                      # E: The type alias to Literal is invalid in runtime context
+issubclass(int, Renamed[3])           # E: Cannot use issubclass() with a Literal type
+issubclass(int, indirect.Literal[3])  # E: Cannot use issubclass() with a Literal type
+[builtins fixtures/isinstancelist.pyi]
+[out]
+
+[case testLiteralErrorsWhenSubclassed]
+from typing_extensions import Literal
+from typing_extensions import Literal as Renamed
+import typing_extensions as indirect
+
+Alias = Literal[3]
+
+class Bad1(Literal[3]): pass            # E: Invalid base class
+class Bad2(Renamed[3]): pass            # E: Invalid base class
+class Bad3(indirect.Literal[3]): pass   # E: Invalid base class
+class Bad4(Alias): pass                 # E: Invalid base class
+[out]
+
+[case testLiteralErrorsWhenInvoked-skip]
+# TODO: We don't seem to correctly handle invoking types like
+# 'Final' and 'Protocol' as well. When fixing this, also fix
+# those types?
+from typing_extensions import Literal
+from typing_extensions import Literal as Renamed
+import typing_extensions as indirect
+
+Alias = Literal[3]
+
+Literal[3]()           # E: The type "Type[Literal]" is not generic and not indexable
+Renamed[3]()           # E: The type "Type[Literal]" is not generic and not indexable
+indirect.Literal[3]()  # E: The type "Type[Literal]" is not generic and not indexable
+Alias()                # E: The type alias to Literal is invalid in runtime context
+
+# TODO: Add appropriate error messages to the following lines
+Literal()
+Renamed()
+indirect.Literal()
+[builtins fixtures/isinstancelist.pyi]
+[out]
+
diff --git a/test-data/unit/check-newtype.test b/test-data/unit/check-newtype.test
index c7f43017003a..bc444c68ee03 100644
--- a/test-data/unit/check-newtype.test
+++ b/test-data/unit/check-newtype.test
@@ -357,12 +357,13 @@ from typing import NewType
 Any = NewType('Any', int)
 Any(5)
 
-[case testNewTypeAndIsInstance]
+[case testNewTypeWithIsInstanceAndIsSubclass]
 from typing import NewType
 T = NewType('T', int)
 d: object
-if isinstance(d, T):  # E: Cannot use isinstance() with a NewType type
-    reveal_type(d) # E: Revealed type is '__main__.T'
+if isinstance(d, T):   # E: Cannot use isinstance() with a NewType type
+    reveal_type(d)     # E: Revealed type is '__main__.T'
+issubclass(object, T)  # E: Cannot use issubclass() with a NewType type
 [builtins fixtures/isinstancelist.pyi]
 
 [case testInvalidNewTypeCrash]
diff --git a/test-data/unit/check-typeddict.test b/test-data/unit/check-typeddict.test
index 4fabf234d534..9910b356f7d9 100644
--- a/test-data/unit/check-typeddict.test
+++ b/test-data/unit/check-typeddict.test
@@ -713,12 +713,13 @@ def set_coordinate(p: TaggedPoint, key: str, value: int) -> None:
 
 -- isinstance
 
-[case testTypedDictAndInstance]
+[case testTypedDictWithIsInstanceAndIsSubclass]
 from mypy_extensions import TypedDict
 D = TypedDict('D', {'x': int})
 d: object
-if isinstance(d, D):  # E: Cannot use isinstance() with a TypedDict type
-    reveal_type(d) # E: Revealed type is '__main__.D'
+if isinstance(d, D):   # E: Cannot use isinstance() with a TypedDict type
+    reveal_type(d)     # E: Revealed type is '__main__.D'
+issubclass(object, D)  # E: Cannot use issubclass() with a TypedDict type
 [builtins fixtures/isinstancelist.pyi]
 
 
diff --git a/test-data/unit/lib-stub/typing_extensions.pyi b/test-data/unit/lib-stub/typing_extensions.pyi
index 2b75d3305ce2..fafcc6481dcd 100644
--- a/test-data/unit/lib-stub/typing_extensions.pyi
+++ b/test-data/unit/lib-stub/typing_extensions.pyi
@@ -1,11 +1,15 @@
-from typing import TypeVar
+from typing import TypeVar, Any
 
 _T = TypeVar('_T')
 
-class Protocol: pass
+class _SpecialForm:
+    def __getitem__(self, typeargs: Any) -> Any:
+        pass
+
+Protocol: _SpecialForm = ...
 def runtime(x: _T) -> _T: pass
 
-class Final: pass
+Final: _SpecialForm = ...
 def final(x: _T) -> _T: pass
 
-class Literal: pass
+Literal: _SpecialForm = ...