diff --git a/crates/ty_python_semantic/resources/mdtest/pep695_type_aliases.md b/crates/ty_python_semantic/resources/mdtest/pep695_type_aliases.md
index 904f08099a..32f64a246a 100644
--- a/crates/ty_python_semantic/resources/mdtest/pep695_type_aliases.md
+++ b/crates/ty_python_semantic/resources/mdtest/pep695_type_aliases.md
@@ -75,6 +75,32 @@ def f(x: T):
     reveal_type(b)  # revealed: str
 ```
 
+## Scoping
+
+PEP 695 type aliases delay runtime evaluation of their right-hand side, so they are a lazy (not
+eager) nested scope.
+
+```py
+type Alias = Foo | str
+
+def f(x: Alias):
+    reveal_type(x)  # revealed: Foo | str
+
+class Foo:
+    pass
+```
+
+But narrowing of names used in the type alias is still respected:
+
+```py
+def _(flag: bool):
+    t = int if flag else None
+    if t is not None:
+        type Alias = t | str
+        def f(x: Alias):
+            reveal_type(x)  # revealed: int | str
+```
+
 ## Generic type aliases
 
 ```py
diff --git a/crates/ty_python_semantic/src/types/infer.rs b/crates/ty_python_semantic/src/types/infer.rs
index c9fc52c6f8..27c23dcf97 100644
--- a/crates/ty_python_semantic/src/types/infer.rs
+++ b/crates/ty_python_semantic/src/types/infer.rs
@@ -2344,7 +2344,7 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
     }
 
     fn infer_type_alias(&mut self, type_alias: &ast::StmtTypeAlias) {
-        self.infer_annotation_expression(&type_alias.value, DeferredExpressionState::Deferred);
+        self.infer_annotation_expression(&type_alias.value, DeferredExpressionState::None);
     }
 
     /// If the current scope is a method inside an enclosing class,