diff --git a/crates/ty_python_semantic/resources/mdtest/generics/pep695/functions.md b/crates/ty_python_semantic/resources/mdtest/generics/pep695/functions.md
index a5e62f6866..5db84cfd5a 100644
--- a/crates/ty_python_semantic/resources/mdtest/generics/pep695/functions.md
+++ b/crates/ty_python_semantic/resources/mdtest/generics/pep695/functions.md
@@ -474,6 +474,16 @@ def g(x: str):
     f(prefix=x, suffix=".tar.gz")
 ```
 
+If the type variable is present multiple times in the union, we choose the correct union element to
+infer against based on the argument type:
+
+```py
+def h[T](x: list[T] | dict[T, T]) -> T | None: ...
+def _(x: list[int], y: dict[int, int]):
+    reveal_type(h(x))  # revealed: int | None
+    reveal_type(h(y))  # revealed: int | None
+```
+
 ## Nested functions see typevars bound in outer function
 
 ```py
diff --git a/crates/ty_python_semantic/src/types/generics.rs b/crates/ty_python_semantic/src/types/generics.rs
index 444c5badd6..992e664401 100644
--- a/crates/ty_python_semantic/src/types/generics.rs
+++ b/crates/ty_python_semantic/src/types/generics.rs
@@ -1397,11 +1397,13 @@ impl<'db> SpecializationBuilder<'db> {
             return Ok(());
         }
 
-        // Remove the union elements that are not related to `formal`.
+        // Remove the union elements from `actual` that are not related to `formal`, and vice
+        // versa.
         //
         // For example, if `formal` is `list[T]` and `actual` is `list[int] | None`, we want to specialize `T`
-        // to `int`.
+        // to `int`, and so ignore the `None`.
         let actual = actual.filter_disjoint_elements(self.db, formal, self.inferable);
+        let formal = formal.filter_disjoint_elements(self.db, actual, self.inferable);
 
         match (formal, actual) {
             // TODO: We haven't implemented a full unification solver yet. If typevars appear in