diff --git a/src/dotty/tools/dotc/transform/PostTyper.scala b/src/dotty/tools/dotc/transform/PostTyper.scala
index 3266d3a02bc5..f9862bb95115 100644
--- a/src/dotty/tools/dotc/transform/PostTyper.scala
+++ b/src/dotty/tools/dotc/transform/PostTyper.scala
@@ -68,7 +68,7 @@ class PostTyper extends MacroTransform with IdentityDenotTransformer  { thisTran
     // TODO fill in
   }
 
-  /** Check bounds of AppliedTypeTrees and TypeApplys.
+  /** Check bounds of AppliedTypeTrees.
    *  Replace type trees with TypeTree nodes.
    *  Replace constant expressions with Literal nodes.
    *  Note: Demanding idempotency instead of purity in literalize is strictly speaking too loose.
@@ -97,29 +97,17 @@ class PostTyper extends MacroTransform with IdentityDenotTransformer  { thisTran
    *  Revisit this issue once we have implemented `inline`. Then we can demand
    *  purity of the prefix unless the selection goes to an inline val.
    */
-  private def normalizeTree(tree: Tree)(implicit ctx: Context): Tree = {
-    def literalize(tp: Type): Tree = tp.widenTermRefExpr match {
-      case ConstantType(value) if isIdempotentExpr(tree) => Literal(value)
-      case _ => tree
-    }
-    def norm(tree: Tree) =
-      if (tree.isType) TypeTree(tree.tpe).withPos(tree.pos)
-      else literalize(tree.tpe)
-    tree match {
-      case tree: TypeTree =>
-        tree
-      case AppliedTypeTree(tycon, args) =>
-        val tparams = tycon.tpe.typeSymbol.typeParams
-        val bounds = tparams.map(tparam =>
-          tparam.info.asSeenFrom(tycon.tpe.normalizedPrefix, tparam.owner.owner).bounds)
-        Checking.checkBounds(args, bounds, _.substDealias(tparams, _))
-        norm(tree)
-      case TypeApply(fn, args) =>
-        Checking.checkBounds(args, fn.tpe.widen.asInstanceOf[PolyType])
-        norm(tree)
-      case _ =>
-        norm(tree)
-    }
+  private def normalizeTree(tree: Tree)(implicit ctx: Context): Tree = tree match {
+    case tree: TypeTree => tree
+    case _ =>
+      if (tree.isType) {
+        Checking.boundsChecker.traverse(tree)
+        TypeTree(tree.tpe).withPos(tree.pos)
+      }
+      else tree.tpe.widenTermRefExpr match {
+        case ConstantType(value) if isIdempotentExpr(tree) => Literal(value)
+        case _ => tree
+      }
   }
 
   class PostTyperTransformer extends Transformer {
@@ -161,10 +149,16 @@ class PostTyper extends MacroTransform with IdentityDenotTransformer  { thisTran
           }
         case tree: Select =>
           transformSelect(paramFwd.adaptRef(tree), Nil)
-        case tree @ TypeApply(sel: Select, args) =>
-          val args1 = transform(args)
-          val sel1 = transformSelect(sel, args1)
-          if (superAcc.isProtectedAccessor(sel1)) sel1 else cpy.TypeApply(tree)(sel1, args1)
+        case tree @ TypeApply(fn, args) =>
+          Checking.checkBounds(args, fn.tpe.widen.asInstanceOf[PolyType])
+          fn match {
+            case sel: Select =>
+              val args1 = transform(args)
+              val sel1 = transformSelect(sel, args1)
+              if (superAcc.isProtectedAccessor(sel1)) sel1 else cpy.TypeApply(tree)(sel1, args1)
+            case _ =>
+              super.transform(tree)
+          }
         case tree @ Assign(sel: Select, _) =>
           superAcc.transformAssign(super.transform(tree))
         case tree: Template =>
@@ -180,6 +174,16 @@ class PostTyper extends MacroTransform with IdentityDenotTransformer  { thisTran
         case tree: DefDef =>
           transformAnnots(tree)
           superAcc.wrapDefDef(tree)(super.transform(tree).asInstanceOf[DefDef])
+        case tree: TypeDef =>
+          transformAnnots(tree)
+          val sym = tree.symbol
+          val tree1 =
+            if (sym.isClass) tree
+            else {
+              Checking.boundsChecker.traverse(tree.rhs)
+              cpy.TypeDef(tree)(rhs = TypeTree(tree.symbol.info))
+            }
+          super.transform(tree1)
         case tree: MemberDef =>
           transformAnnots(tree)
           super.transform(tree)
diff --git a/src/dotty/tools/dotc/typer/Applications.scala b/src/dotty/tools/dotc/typer/Applications.scala
index b3cda20b822d..649b8088fe8d 100644
--- a/src/dotty/tools/dotc/typer/Applications.scala
+++ b/src/dotty/tools/dotc/typer/Applications.scala
@@ -607,7 +607,6 @@ trait Applications extends Compatibility { self: Typer =>
       case pt: PolyType =>
         if (typedArgs.length <= pt.paramBounds.length)
           typedArgs = typedArgs.zipWithConserve(pt.paramBounds)(adaptTypeArg)
-        Checking.checkBounds(typedArgs, pt)
       case _ =>
     }
     assignType(cpy.TypeApply(tree)(typedFn, typedArgs), typedFn, typedArgs)
diff --git a/src/dotty/tools/dotc/typer/Checking.scala b/src/dotty/tools/dotc/typer/Checking.scala
index 57032c4d9ecb..5635c12a2b42 100644
--- a/src/dotty/tools/dotc/typer/Checking.scala
+++ b/src/dotty/tools/dotc/typer/Checking.scala
@@ -48,6 +48,18 @@ object Checking {
   def checkBounds(args: List[tpd.Tree], poly: PolyType)(implicit ctx: Context): Unit =
     checkBounds(args, poly.paramBounds, _.substParams(poly, _))
 
+  /** Check all AppliedTypeTree nodes in this tree for legal bounds */
+  val boundsChecker = new TreeTraverser {
+    def traverse(tree: Tree)(implicit ctx: Context) = tree match {
+      case AppliedTypeTree(tycon, args) =>
+        val tparams = tycon.tpe.typeSymbol.typeParams
+        val bounds = tparams.map(tparam =>
+          tparam.info.asSeenFrom(tycon.tpe.normalizedPrefix, tparam.owner.owner).bounds)
+        checkBounds(args, bounds, _.substDealias(tparams, _))
+      case _ => traverseChildren(tree)
+    }
+  }
+
   /** Check that `tp` refers to a nonAbstract class
    *  and that the instance conforms to the self type of the created class.
    */
diff --git a/src/dotty/tools/dotc/typer/Namer.scala b/src/dotty/tools/dotc/typer/Namer.scala
index b24916be8005..5ed388f4cd27 100644
--- a/src/dotty/tools/dotc/typer/Namer.scala
+++ b/src/dotty/tools/dotc/typer/Namer.scala
@@ -850,7 +850,9 @@ class Namer { typer: Typer =>
       if (tparamSyms.nonEmpty && !isDerived) tp.LambdaAbstract(tparamSyms)
       //else if (toParameterize) tp.parameterizeWith(tparamSyms)
       else tp
-    sym.info = abstracted(TypeBounds.empty)
+
+    val dummyInfo = abstracted(TypeBounds.empty)
+    sym.info = dummyInfo
       // Temporarily set info of defined type T to ` >: Nothing <: Any.
       // This is done to avoid cyclic reference errors for F-bounds.
       // This is subtle: `sym` has now an empty TypeBounds, but is not automatically
@@ -871,6 +873,19 @@ class Namer { typer: Typer =>
       sym.info = NoCompleter
       sym.info = checkNonCyclic(sym, unsafeInfo, reportErrors = true)
     }
+
+    // Here we pay the price for the cavalier setting info to TypeBounds.empty above.
+    // We need to compensate by invalidating caches in references that might
+    // still contain the TypeBounds.empty. If we do not do this, stdlib factories
+    // fail with a bounds error in PostTyper.
+    def ensureUpToDate(tp: Type, outdated: Type) = tp match {
+      case tref: TypeRef if tref.info == outdated && sym.info != outdated =>
+        tref.uncheckedSetSym(null)
+      case _ =>
+    }
+    ensureUpToDate(sym.typeRef, dummyInfo)
+    ensureUpToDate(sym.typeRef.appliedTo(tparamSyms.map(_.typeRef)), TypeBounds.empty)
+
     etaExpandArgs.apply(sym.info)
   }
 
diff --git a/src/dotty/tools/dotc/typer/Typer.scala b/src/dotty/tools/dotc/typer/Typer.scala
index cb3bb0f205e9..43a89e59496e 100644
--- a/src/dotty/tools/dotc/typer/Typer.scala
+++ b/src/dotty/tools/dotc/typer/Typer.scala
@@ -961,8 +961,7 @@ class Typer extends Namer with TypeAssigner with Applications with Implicits wit
     val TypeDef(name, rhs) = tdef
     checkLowerNotHK(sym, tdef.tparams.map(symbolOfTree), tdef.pos)
     completeAnnotations(tdef, sym)
-    val _ = typedType(rhs) // unused, typecheck only to remove from typedTree
-    assignType(cpy.TypeDef(tdef)(name, TypeTree(sym.info), Nil), sym)
+    assignType(cpy.TypeDef(tdef)(name, typedType(rhs), Nil), sym)
   }
 
   def typedClassDef(cdef: untpd.TypeDef, cls: ClassSymbol)(implicit ctx: Context) = track("typedClassDef") {
diff --git a/test/dotc/tests.scala b/test/dotc/tests.scala
index db5fa85446b5..b4cac4a7628f 100644
--- a/test/dotc/tests.scala
+++ b/test/dotc/tests.scala
@@ -107,8 +107,8 @@ class tests extends CompilerTest {
 
   @Test def neg_abstractOverride() = compileFile(negDir, "abstract-override", xerrors = 2)
   @Test def neg_blockescapes() = compileFile(negDir, "blockescapesNeg", xerrors = 1)
-  @Test def neg_bounds() = compileFile(negDir, "bounds", xerrors = 2)
-  @Test def neg_typedapply() = compileFile(negDir, "typedapply", xerrors = 4)
+  @Test def neg_bounds() = compileFile(negDir, "bounds", xerrors = 3)
+  @Test def neg_typedapply() = compileFile(negDir, "typedapply", xerrors = 3)
   @Test def neg_typedIdents() = compileDir(negDir, "typedIdents", xerrors = 2)
   @Test def neg_assignments() = compileFile(negDir, "assignments", xerrors = 3)
   @Test def neg_typers() = compileFile(negDir, "typers", xerrors = 14)(allowDoubleBindings)
@@ -165,6 +165,7 @@ class tests extends CompilerTest {
   @Test def neg_selfreq = compileFile(negDir, "selfreq", xerrors = 2)
   @Test def neg_singletons = compileFile(negDir, "singletons", xerrors = 8)
   @Test def neg_shadowedImplicits = compileFile(negDir, "arrayclone-new", xerrors = 2)
+  @Test def neg_ski = compileFile(negDir, "ski", xerrors = 2)
   @Test def neg_traitParamsTyper = compileFile(negDir, "traitParamsTyper", xerrors = 5)
   @Test def neg_traitParamsMixin = compileFile(negDir, "traitParamsMixin", xerrors = 2)
   @Test def neg_firstError = compileFile(negDir, "firstError", xerrors = 3)
@@ -182,7 +183,7 @@ class tests extends CompilerTest {
    .filter(_.nonEmpty)
    .toList
 
-  @Test def compileStdLib = compileList("compileStdLib", stdlibFiles, "-migration" :: scala2mode)
+  @Test def compileStdLib = compileList("compileStdLib", stdlibFiles, "-migration" :: scala2mode)(allowDeepSubtypes)
   @Test def dotty = compileDir(dottyDir, ".", List("-deep", "-Ycheck-reentrant"))(allowDeepSubtypes) // note the -deep argument
 
   @Test def dotc_ast = compileDir(dotcDir, "ast")
diff --git a/tests/neg/bounds.scala b/tests/neg/bounds.scala
index 8d2cd825995f..55eec6941b10 100644
--- a/tests/neg/bounds.scala
+++ b/tests/neg/bounds.scala
@@ -5,4 +5,8 @@ object Test {
     g("foo")
     new C("bar")
   }
+  def baz[X >: Y, Y <: String](x: X, y: Y) = (x, y)
+
+  baz[Int, String](1, "abc")
+
 }
diff --git a/tests/neg/ski.scala b/tests/neg/ski.scala
new file mode 100644
index 000000000000..6510e66aeefe
--- /dev/null
+++ b/tests/neg/ski.scala
@@ -0,0 +1,136 @@
+trait Term {
+  type ap[x <: Term] <: Term
+  type eval <: Term
+}
+
+// The S combinator
+trait S extends Term {
+  type ap[x <: Term] = S1[x]
+  type eval = S
+}
+trait S1[x <: Term] extends Term {
+  type ap[y <: Term] = S2[x, y]
+  type eval = S1[x]
+}
+trait S2[x <: Term, y <: Term] extends Term {
+  type ap[z <: Term] = S3[x, y, z]
+  type eval = S2[x, y]
+}
+trait S3[x <: Term, y <: Term, z <: Term] extends Term {
+  type ap[v <: Term] = eval#ap[v]
+  type eval = x#ap[z]#ap[y#ap[z]]#eval
+}
+
+// The K combinator
+trait K extends Term {
+  type ap[x <: Term] = K1[x]
+  type eval = K
+}
+trait K1[x <: Term] extends Term {
+  type ap[y <: Term] = K2[x, y]
+  type eval = K1[x]
+}
+trait K2[x <: Term, y <: Term] extends Term {
+  type ap[z <: Term] = eval#ap[z]
+  type eval = x#eval
+}
+
+// The I combinator
+trait I extends Term {
+  type ap[x <: Term] = I1[x]
+  type eval = I
+}
+trait I1[x <: Term] extends Term {
+  type ap[y <: Term] = eval#ap[y]
+  type eval = x#eval
+}
+
+// Constants
+
+trait c extends Term {
+  type ap[x <: Term] = c
+  type eval = c
+}
+trait d extends Term {
+  type ap[x <: Term] = d
+  type eval = d
+}
+trait e extends Term {
+  type ap[x <: Term] = e
+  type eval = e
+}
+
+case class Equals[A >: B <:B , B]()
+
+object Test {
+  type T1 = Equals[Int, Int]     // compiles fine
+  type T2 = Equals[String, Int]  // error
+  type T3 = Equals[I#ap[c]#eval, c]
+  type T3a = Equals[I#ap[c]#eval, d]// error
+
+  // Ic -> c
+  type T4 = Equals[I#ap[c]#eval, c]
+
+  // Kcd -> c
+  type T5 = Equals[K#ap[c]#ap[d]#eval, c]
+
+  // KKcde -> d
+  type T6 = Equals[K#ap[K]#ap[c]#ap[d]#ap[e]#eval, d]
+
+  // SIIIc -> Ic
+  type T7 = Equals[S#ap[I]#ap[I]#ap[I]#ap[c]#eval, c]
+
+  // SKKc -> Ic
+  type T8 = Equals[S#ap[K]#ap[K]#ap[c]#eval, c]
+
+  // SIIKc -> KKc
+  type T9 = Equals[S#ap[I]#ap[I]#ap[K]#ap[c]#eval, K#ap[K]#ap[c]#eval]
+
+  // SIKKc -> K(KK)c
+  type T10 = Equals[S#ap[I]#ap[K]#ap[K]#ap[c]#eval, K#ap[K#ap[K]]#ap[c]#eval]
+
+  // SIKIc -> KIc
+  type T11 = Equals[S#ap[I]#ap[K]#ap[I]#ap[c]#eval, K#ap[I]#ap[c]#eval]
+
+  // SKIc -> Ic
+  type T12 = Equals[S#ap[K]#ap[I]#ap[c]#eval, c]
+
+  // R = S(K(SI))K  (reverse)
+  type R = S#ap[K#ap[S#ap[I]]]#ap[K]
+  type T13 = Equals[R#ap[c]#ap[d]#eval, d#ap[c]#eval]
+
+  type b[a <: Term] = S#ap[K#ap[a]]#ap[S#ap[I]#ap[I]]
+
+  trait A0 extends Term {
+    type ap[x <: Term] = c
+    type eval = A0
+  }
+  trait A1 extends Term {
+    type ap[x <: Term] = x#ap[A0]#eval
+    type eval = A1
+  }
+  trait A2 extends Term {
+    type ap[x <: Term] = x#ap[A1]#eval
+    type eval = A2
+  }
+
+  type NN1 = b[R]#ap[b[R]]#ap[A0]
+  type T13a = Equals[NN1#eval, c]
+
+  // Double iteration
+  type NN2 = b[R]#ap[b[R]]#ap[A1]
+  type T14 = Equals[NN2#eval, c]
+
+  // Triple iteration
+  type NN3 = b[R]#ap[b[R]]#ap[A2]
+  type T15 = Equals[NN3#eval, c]
+
+  trait An extends Term {
+    type ap[x <: Term] = x#ap[An]#eval
+    type eval = An
+  }
+
+// Infinite iteration: Smashes scalac's stack
+  type NNn = b[R]#ap[b[R]]#ap[An]
+  // type X = Equals[NNn#eval, c]
+}
diff --git a/tests/neg/typedapply.scala b/tests/neg/typedapply.scala
index b80281c9ff67..706b05da3592 100644
--- a/tests/neg/typedapply.scala
+++ b/tests/neg/typedapply.scala
@@ -2,16 +2,12 @@ object typedapply {
 
   def foo[X, Y](x: X, y: Y) = (x, y)
 
-  foo[Int](1, "abc")
+  foo[Int](1, "abc")  // error: wrong number of type parameters
 
-  foo[Int, String, String](1, "abc")
+  foo[Int, String, String](1, "abc") // error: wrong number of type parameters
 
   def bar(x: Int) = x
 
-  bar[Int](1)
-
-  def baz[X >: Y, Y <: String](x: X, y: Y) = (x, y)
-
-  baz[Int, String](1, "abc")
+  bar[Int](1) // error: does not take parameters
 
 }