diff --git a/pkg/compiler/lib/src/js_backend/runtime_types_resolution.dart b/pkg/compiler/lib/src/js_backend/runtime_types_resolution.dart
index d633266ca0d..8259c10ae77 100644
--- a/pkg/compiler/lib/src/js_backend/runtime_types_resolution.dart
+++ b/pkg/compiler/lib/src/js_backend/runtime_types_resolution.dart
@@ -1071,6 +1071,9 @@ class RuntimeTypesNeedBuilderImpl implements RuntimeTypesNeedBuilder {
                     // TODO(johnniwinther): Use register generic instantiations
                     // instead.
                     assumeInstantiations: _genericInstantiations.isNotEmpty)) {
+          if (functionType.typeVariables.isNotEmpty) {
+            potentiallyNeedTypeArguments(function);
+          }
           functionType.forEachTypeVariable((TypeVariableType typeVariable) {
             Entity typeDeclaration = typeVariable.element.typeDeclaration;
             if (!processedEntities.contains(typeDeclaration)) {
diff --git a/pkg/compiler/test/rti/data/local_function_generic.dart b/pkg/compiler/test/rti/data/local_function_generic.dart
index e591bc2712a..2a08e7c4a38 100644
--- a/pkg/compiler/test/rti/data/local_function_generic.dart
+++ b/pkg/compiler/test/rti/data/local_function_generic.dart
@@ -8,7 +8,7 @@ import 'package:expect/expect.dart';
 
 method1() {
   /*spec.direct,explicit=[local.T*],needsArgs,needsSignature*/
-  /*prod.needsSignature*/
+  /*prod.needsArgs,needsSignature*/
   T local<T>(T t) => t;
   return local;
 }
diff --git a/pkg/compiler/test/rti/data/local_function_signatures_generic.dart b/pkg/compiler/test/rti/data/local_function_signatures_generic.dart
index be9d7b25428..93b62e8923e 100644
--- a/pkg/compiler/test/rti/data/local_function_signatures_generic.dart
+++ b/pkg/compiler/test/rti/data/local_function_signatures_generic.dart
@@ -8,7 +8,7 @@ import 'package:expect/expect.dart';
 
 class Class1 {
   method1() {
-    /*needsSignature*/
+    /*needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
     num local<T>(num n) => null;
     return local;
   }
@@ -19,7 +19,7 @@ class Class1 {
   }
 
   method3() {
-    /*needsSignature*/
+    /*needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
     int local<T>(num n) => null;
     return local;
   }
@@ -75,13 +75,13 @@ method9<T>() {
 
 method10() {
   /*spec.direct,explicit=[local.T*],needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
-  /*prod.needsSignature*/
+  /*prod.needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
   num local<T>(T n) => null;
   return local;
 }
 
 method11() {
-  /*needsSignature*/
+  /*needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
   T local<T>(num n) => null;
   return local;
 }
@@ -93,20 +93,20 @@ method12() {
 }
 
 num Function(num) method13() {
-  /*needsSignature*/
+  /*needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
   num local<T>(num n) => null;
   return local;
 }
 
 num Function(num) method14() {
   /*spec.direct,explicit=[local.T*],needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
-  /*prod.needsSignature*/
+  /*prod.needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
   num local<T>(T n) => null;
   return local;
 }
 
 num Function(num) method15() {
-  /*needsSignature*/
+  /*needsArgs,needsInst=[<dynamic>,<num*>,<num*>],needsSignature*/
   T local<T>(num n) => null;
   return local;
 }
diff --git a/tests/dart2js/42501_test.dart b/tests/dart2js/42501_test.dart
new file mode 100644
index 00000000000..91b79703025
--- /dev/null
+++ b/tests/dart2js/42501_test.dart
@@ -0,0 +1,16 @@
+// Copyright (c) 2020, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+
+import 'package:expect/expect.dart';
+
+typedef F = num? Function();
+
+F foo() {
+  T? local<T>() => null;
+  return local;
+}
+
+void main() {
+  Expect.type<F>(foo());
+}
diff --git a/tests/dart2js_2/42501_test.dart b/tests/dart2js_2/42501_test.dart
new file mode 100644
index 00000000000..ae894135331
--- /dev/null
+++ b/tests/dart2js_2/42501_test.dart
@@ -0,0 +1,16 @@
+// Copyright (c) 2020, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+
+import 'package:expect/expect.dart';
+
+typedef F = num Function();
+
+F foo() {
+  T local<T>() => null;
+  return local;
+}
+
+void main() {
+  Expect.type<F>(foo());
+}