diff --git a/lib/Sema/CSBindings.cpp b/lib/Sema/CSBindings.cpp
index c0f92a2c4cde5..2b02a51626ae3 100644
--- a/lib/Sema/CSBindings.cpp
+++ b/lib/Sema/CSBindings.cpp
@@ -336,8 +336,12 @@ void PotentialBindings::inferTransitiveBindings(
       addLiteral(literal.second.getSource());
 
     // Infer transitive defaults.
-    for (const auto &def : bindings.Defaults)
+    for (const auto &def : bindings.Defaults) {
+      if (def.getSecond()->getKind() == ConstraintKind::DefaultClosureType)
+        continue;
+
       addDefault(def.second);
+    }
 
     // TODO: We shouldn't need this in the future.
     if (entry.second->getKind() != ConstraintKind::Subtype)
@@ -366,11 +370,45 @@ void PotentialBindings::inferTransitiveBindings(
   }
 }
 
+// If potential binding type variable is a closure that has a subtype relation
+// associated with argument conversion constraint located directly on an
+// autoclosure parameter.
+static bool
+isClosureInAutoClosureArgumentConversion(PotentialBindings &bindings) {
+
+  if (!bindings.TypeVar->getImpl().isClosureType())
+    return false;
+
+  return llvm::any_of(
+      bindings.SubtypeOf,
+      [](std::pair<TypeVariableType *, Constraint *> subType) {
+        if (subType.second->getKind() != ConstraintKind::ArgumentConversion)
+          return false;
+        return subType.second->getLocator()
+            ->isLastElement<LocatorPathElt::AutoclosureResult>();
+      });
+}
+
 void PotentialBindings::finalize(
     llvm::SmallDenseMap<TypeVariableType *, PotentialBindings>
         &inferredBindings) {
   inferTransitiveProtocolRequirements(inferredBindings);
   inferTransitiveBindings(inferredBindings);
+
+  // For autoclosure parameters if we have a closure argument which could
+  // default to `() -> $T`, we avoid infering defaultable binding because
+  // an autoclosure cannot accept a closure paramenter unless the result `$T`
+  // is bound to a function type via another contextual binding. Also consider
+  // adjacent vars because they can also default transitively.
+  if (isClosureInAutoClosureArgumentConversion(*this)) {
+    auto closureDefault = llvm::find_if(
+        Defaults, [](const std::pair<CanType, Constraint *> &entry) {
+          return entry.second->getKind() == ConstraintKind::DefaultClosureType;
+        });
+    if (closureDefault != Defaults.end()) {
+      Defaults.erase(closureDefault);
+    }
+  }
 }
 
 PotentialBindings::BindingScore
diff --git a/lib/Sema/CSGen.cpp b/lib/Sema/CSGen.cpp
index dfa0c8781ebe5..a2bf0b25d641d 100644
--- a/lib/Sema/CSGen.cpp
+++ b/lib/Sema/CSGen.cpp
@@ -2520,7 +2520,7 @@ namespace {
       closure->walk(collectVarRefs);
 
       // If walker discovered error expressions, let's fail constraint
-      // genreation only if closure is going to participate
+      // generation only if closure is going to participate
       // in the type-check. This allows us to delay validation of
       // multi-statement closures until body is opened.
       if (shouldTypeCheckInEnclosingExpression(closure) &&
diff --git a/test/Constraints/closures.swift b/test/Constraints/closures.swift
index ead39e2a5eef1..642086f06b4c7 100644
--- a/test/Constraints/closures.swift
+++ b/test/Constraints/closures.swift
@@ -1056,3 +1056,64 @@ func test_inout_with_invalid_member_ref() {
   // expected-error@-1 {{value of tuple type 'Void' has no member 'createS'}}
   // expected-error@-2 {{cannot pass immutable value as inout argument: '$0' is immutable}}
 }
+
+struct SR12033<T> {
+  public static func capture(_ thunk: () -> T) -> SR12033<T> {
+      .init() 
+  }
+  public static func captureA(_ thunk: @autoclosure () -> T) -> SR12033<T> { // expected-note{{'captureA' declared here}}
+      .init() 
+  }
+  public static func captureE(_ thunk: @escaping () -> T) -> SR12033<T> {
+      .init() 
+  }
+  public static func captureAE(_ thunk: @autoclosure @escaping () -> T) -> SR12033<T> { // expected-note{{'captureAE' declared here}}
+      .init() 
+  }
+}
+
+var number = 1
+
+let t = SR12033<Int>.capture { number } // OK
+let t2 = SR12033<Int>.captureE { number } // OK
+let t3 = SR12033<Int>.captureA(number) // OK
+
+let e = SR12033<Int>.captureA { number } 
+// expected-error@-1{{trailing closure passed to parameter of type 'Int' that does not accept a closure}}
+let e2 = SR12033<Int>.captureAE { number } 
+// expected-error@-1{{trailing closure passed to parameter of type 'Int' that does not accept a closure}}
+
+struct SR12033_S {
+  public static var zero: SR12033_S { .init() }
+
+  // captureGenericFuncA
+  public static func f<T>(_ thunk: @autoclosure () -> T) -> SR12033_S { // expected-note 2{{'f' declared here}}
+  // expected-note@-1 2{{in call to function 'f'}}
+    .init()
+  }
+
+  public static func unwrap<T>(_ optional: T?, _ defaultValue: @autoclosure () throws -> T) {}
+
+  func test() {
+    let number = 1
+    _ = Self.f(number) // OK
+    _ = Self.f { number } // expected-error{{trailing closure passed to parameter of type '_' that does not accept a closure}}
+    // expected-error@-1 {{generic parameter 'T' could not be inferred}}
+    _ = Self.f { _ in number } // expected-error{{trailing closure passed to parameter of type '_' that does not accept a closure}}
+    // expected-error@-1 {{generic parameter 'T' could not be inferred}}
+  }
+
+  // Inference with contextual type is OK `T` is infered as `() -> Int`
+  func test(_ o: (()-> Int)?) {
+    Self.unwrap(o, { 0 }) // Ok
+    Self.unwrap(o, { .zero }) // Ok
+    Self.unwrap(o, { _ in .zero }) // expected-error {{contextual closure type '() -> Int' expects 0 arguments, but 1 was used in closure body}}
+  }
+
+  // `T` is infered as `() -> U`
+  func testGeneric<U>(_ o: (() -> U)?) where U: BinaryInteger {
+    Self.unwrap(o, { .zero }) // OK
+    Self.unwrap(o, { 0 }) // OK
+    Self.unwrap(o, { _ in .zero }) // expected-error {{contextual closure type '() -> U' expects 0 arguments, but 1 was used in closure body}}
+  }
+}