diff --git a/crates/compiler/solve/tests/solve_expr.rs b/crates/compiler/solve/tests/solve_expr.rs
index 3ca24cbe93..74e72ff688 100644
--- a/crates/compiler/solve/tests/solve_expr.rs
+++ b/crates/compiler/solve/tests/solve_expr.rs
@@ -8197,4 +8197,27 @@ mod solve_expr {
         "###
         );
     }
+
+    #[test]
+    fn fix_recursion_under_alias_issue_4368() {
+        infer_eq_without_problem(
+            indoc!(
+                r#"
+                app "test" provides [doIt] to "./platform"
+
+                Effect : [
+                    DoIt {} ({} -> Effect),
+                ]
+
+                Task := ({} -> Effect) -> Effect
+
+                doIt : {} -> Task
+                doIt = \{} ->
+                    @Task \toNext ->
+                        DoIt {} \{} -> (toNext {})
+                "#
+            ),
+            "{} -> Task",
+        )
+    }
 }
diff --git a/crates/compiler/types/src/subs.rs b/crates/compiler/types/src/subs.rs
index 50784290ec..381011123c 100644
--- a/crates/compiler/types/src/subs.rs
+++ b/crates/compiler/types/src/subs.rs
@@ -3255,13 +3255,17 @@ fn occurs(
                     EmptyRecord | EmptyTagUnion => Ok(()),
                 }
             }
-            Alias(_, args, _, _) => {
+            Alias(_, args, real_var, _) => {
                 let mut new_seen = seen.to_owned();
                 new_seen.push(root_var);
 
                 for var_index in args.into_iter() {
                     let var = subs[var_index];
-                    short_circuit_help(subs, root_var, &new_seen, var)?;
+                    if short_circuit_help(subs, root_var, &new_seen, var).is_err() {
+                        // Pay the cost and figure out what the actual recursion point is
+
+                        return short_circuit_help(subs, root_var, &new_seen, *real_var);
+                    }
                 }
 
                 Ok(())