diff --git a/src/dotty/tools/dotc/core/TypeApplications.scala b/src/dotty/tools/dotc/core/TypeApplications.scala
index bf756facfa28..81328b9940b6 100644
--- a/src/dotty/tools/dotc/core/TypeApplications.scala
+++ b/src/dotty/tools/dotc/core/TypeApplications.scala
@@ -200,8 +200,10 @@ class TypeApplications(val self: Type) extends AnyVal {
    */
   final def toBounds(tparam: Symbol)(implicit ctx: Context): TypeBounds = self match {
     case self: TypeBounds => // this can happen for wildcard args
-      self
+      self & tparam.info.bounds
     case _ =>
+      // no within-bounds check done here because of risk of cycles. Thsi is done later
+      // for source generated types using checkBounds.
       val v = tparam.variance
       if (v > 0 && !(tparam is Local) && !(tparam is ExpandedTypeParam)) TypeBounds.upper(self)
       else if (v < 0 && !(tparam is Local) && !(tparam is ExpandedTypeParam)) TypeBounds.lower(self)
diff --git a/test/dotc/tests.scala b/test/dotc/tests.scala
index 966c231e4cac..bf127d7ae623 100644
--- a/test/dotc/tests.scala
+++ b/test/dotc/tests.scala
@@ -102,6 +102,7 @@ class tests extends CompilerTest {
   @Test def neg_typetest = compileFile(negDir, "typetest", xerrors = 1)
   @Test def neg_t1569_failedAvoid = compileFile(negDir, "t1569-failedAvoid", xerrors = 1)
   @Test def neg_cycles = compileFile(negDir, "cycles", xerrors = 6)
+  @Test def neg_boundspropagation = compileFile(negDir, "boundspropagation", xerrors = 2)
 
   @Test def dotc = compileDir(dotcDir + "tools/dotc", twice)(allowDeepSubtypes)
   @Test def dotc_ast = compileDir(dotcDir + "tools/dotc/ast", twice)
diff --git a/tests/neg/boundspropagation.scala b/tests/neg/boundspropagation.scala
new file mode 100644
index 000000000000..560d5416c17b
--- /dev/null
+++ b/tests/neg/boundspropagation.scala
@@ -0,0 +1,26 @@
+// scalac fails for test2/3
+// dotc fails for all three
+object test1 {
+  class Tree[-T >: Null]
+
+
+  def f(x: Any): Tree[Null] = x match {
+    case y: Tree[_] => y
+  }
+}
+object test2 {
+  class Tree[T >: Null]
+
+
+  def f(x: Any): Tree[Null] = x match {
+    case y: Tree[_] => y
+  }
+}
+object test3 {
+  class Tree[+T >: Null]
+
+
+  def f(x: Any): Tree[Null] = x match {
+    case y: Tree[_] => y
+  }
+}
diff --git a/tests/pending/pos/boundspropagation.scala b/tests/pending/pos/boundspropagation.scala
index 560d5416c17b..23f998a34454 100644
--- a/tests/pending/pos/boundspropagation.scala
+++ b/tests/pending/pos/boundspropagation.scala
@@ -1,5 +1,5 @@
 // scalac fails for test2/3
-// dotc fails for all three
+// dotc used to fail for all three
 object test1 {
   class Tree[-T >: Null]
 
@@ -8,7 +8,7 @@ object test1 {
     case y: Tree[_] => y
   }
 }
-object test2 {
+/*object test2 {
   class Tree[T >: Null]
 
 
@@ -22,5 +22,6 @@ object test3 {
 
   def f(x: Any): Tree[Null] = x match {
     case y: Tree[_] => y
-  }
+   }
 }
+*/