diff --git a/compiler/can/src/annotation.rs b/compiler/can/src/annotation.rs
index e0528d9aa8..64d9fe7f60 100644
--- a/compiler/can/src/annotation.rs
+++ b/compiler/can/src/annotation.rs
@@ -195,6 +195,18 @@ fn can_annotation_help(
                         vars.push((name.clone(), arg_ann));
                     }
 
+                    // make sure the recursion variable is freshly instantiated
+                    if let Type::RecursiveTagUnion(rvar, _, _) = &mut actual {
+                        let new = var_store.fresh();
+                        substitutions.insert(*rvar, Type::Variable(new));
+                        *rvar = new;
+                    }
+
+                    // make sure hidden variables are freshly instantiated
+                    for var in alias.hidden_variables.iter() {
+                        substitutions.insert(*var, Type::Variable(var_store.fresh()));
+                    }
+
                     // instantiate variables
                     actual.substitute(&substitutions);
 
@@ -320,9 +332,17 @@ fn can_annotation_help(
                     inner_type
                 };
 
+                let mut hidden_variables = MutSet::default();
+                hidden_variables.extend(alias_actual.variables());
+
+                for loc_var in lowercase_vars.iter() {
+                    hidden_variables.remove(&loc_var.value.1);
+                }
+
                 let alias = Alias {
                     region,
                     vars: lowercase_vars,
+                    hidden_variables,
                     uniqueness: None,
                     typ: alias_actual,
                 };
diff --git a/compiler/can/src/def.rs b/compiler/can/src/def.rs
index fe82944005..a3b270f231 100644
--- a/compiler/can/src/def.rs
+++ b/compiler/can/src/def.rs
@@ -281,15 +281,8 @@ pub fn canonicalize_defs<'a>(
                 }
 
                 scope.add_alias(symbol, ann.region, can_vars.clone(), can_ann.typ.clone());
-
-                let alias = roc_types::types::Alias {
-                    region: ann.region,
-                    vars: can_vars,
-                    uniqueness: None,
-                    typ: can_ann.typ,
-                };
-
-                aliases.insert(symbol, alias);
+                let alias = scope.lookup_alias(symbol).expect("alias is added to scope");
+                aliases.insert(symbol, alias.clone());
             }
             other => value_defs.push(other),
         }
diff --git a/compiler/can/src/scope.rs b/compiler/can/src/scope.rs
index d1817e8141..f4e72085a5 100644
--- a/compiler/can/src/scope.rs
+++ b/compiler/can/src/scope.rs
@@ -1,4 +1,4 @@
-use roc_collections::all::ImMap;
+use roc_collections::all::{ImMap, MutSet};
 use roc_module::ident::{Ident, Lowercase};
 use roc_module::symbol::{IdentIds, ModuleId, Symbol};
 use roc_problem::can::RuntimeError;
@@ -146,14 +146,21 @@ impl Scope {
         vars: Vec<Located<(Lowercase, Variable)>>,
         typ: Type,
     ) {
-        self.aliases.insert(
-            name,
-            Alias {
-                region,
-                vars,
-                uniqueness: None,
-                typ,
-            },
-        );
+        let mut hidden_variables = MutSet::default();
+        hidden_variables.extend(typ.variables());
+
+        for loc_var in vars.iter() {
+            hidden_variables.remove(&loc_var.value.1);
+        }
+
+        let alias = Alias {
+            region,
+            vars,
+            hidden_variables,
+            uniqueness: None,
+            typ,
+        };
+
+        self.aliases.insert(name, alias);
     }
 }
diff --git a/compiler/constrain/src/module.rs b/compiler/constrain/src/module.rs
index ffccbc61de..89def9bdb0 100644
--- a/compiler/constrain/src/module.rs
+++ b/compiler/constrain/src/module.rs
@@ -150,8 +150,16 @@ where
             ));
         }
 
+        let mut hidden_variables = MutSet::default();
+        hidden_variables.extend(actual.variables());
+
+        for loc_var in vars.iter() {
+            hidden_variables.remove(&loc_var.value.1);
+        }
+
         let alias = Alias {
             vars,
+            hidden_variables,
             region: builtin_alias.region,
             uniqueness: None,
             typ: actual,
@@ -196,8 +204,16 @@ pub fn constrain_imported_aliases(
 
         actual.substitute(&substitution);
 
+        let mut hidden_variables = MutSet::default();
+        hidden_variables.extend(actual.variables());
+
+        for loc_var in vars.iter() {
+            hidden_variables.remove(&loc_var.value.1);
+        }
+
         let alias = Alias {
             vars,
+            hidden_variables,
             region: imported_alias.region,
             uniqueness: imported_alias.uniqueness,
             typ: actual,
diff --git a/compiler/types/src/types.rs b/compiler/types/src/types.rs
index 0db34cb709..d3c43d6b25 100644
--- a/compiler/types/src/types.rs
+++ b/compiler/types/src/types.rs
@@ -984,6 +984,10 @@ pub enum PatternCategory {
 pub struct Alias {
     pub region: Region,
     pub vars: Vec<Located<(Lowercase, Variable)>>,
+
+    /// hidden type variables, like the closure variable in `a -> b`
+    pub hidden_variables: MutSet<Variable>,
+
     pub uniqueness: Option<boolean_algebra::Bool>,
     pub typ: Type,
 }