diff --git a/compiler/src/dotty/tools/dotc/tastyreflect/ReflectionCompilerInterface.scala b/compiler/src/dotty/tools/dotc/tastyreflect/ReflectionCompilerInterface.scala
index 17d8d8fef925..6e822a0592b2 100644
--- a/compiler/src/dotty/tools/dotc/tastyreflect/ReflectionCompilerInterface.scala
+++ b/compiler/src/dotty/tools/dotc/tastyreflect/ReflectionCompilerInterface.scala
@@ -2050,17 +2050,17 @@ class ReflectionCompilerInterface(val rootContext: core.Contexts.Context) extend
     }}
     val argVals = argVals0.reverse
     val argRefs = argRefs0.reverse
-    def rec(fn: Tree, topAscription: Option[TypeTree]): Tree = fn match {
+    val expectedSig = Signature.NotAMethod.prependTermParams(argRefs.map(_.tpe), false)
+    def rec(fn: Tree, topAscription: Option[TypeTree]): Option[Tree] = fn match {
       case Typed(expr, tpt) =>
-        // we need to retain any type ascriptions we see and:
-        // a) if we succeed, ascribe the result type of the ascription to the inlined body
-        // b) if we fail, re-ascribe the same type to whatever it was we couldn't inline
+        // we need to retain any type ascriptions we see and if we succeed,
+        // ascribe the result type of the ascription to the inlined body
         // note: if you see many nested ascriptions, keep the top one as that's what the enclosing expression expects
         rec(expr, topAscription.orElse(Some(tpt)))
       case Inlined(call, bindings, expansion) =>
         // this case must go before closureDef to avoid dropping the inline node
-        cpy.Inlined(fn)(call, bindings, rec(expansion, topAscription))
-      case closureDef(ddef) =>
+        rec(expansion, topAscription).map(cpy.Inlined(fn)(call, bindings, _))
+      case cl @ closureDef(ddef) if defn.isFunctionType(cl.tpe) =>
         val paramSyms = ddef.vparamss.head.map(param => param.symbol)
         val paramToVals = paramSyms.zip(argRefs).toMap
         val result = new TreeTypeMap(
@@ -2070,24 +2070,26 @@ class ReflectionCompilerInterface(val rootContext: core.Contexts.Context) extend
         ).transform(ddef.rhs)
         topAscription match {
           case Some(tpt) =>
-            // we assume the ascribed type has an apply that has a MethodType with a single param list (there should be no polys)
-            val methodType = tpt.tpe.member(nme.apply).info.asInstanceOf[MethodType]
+            // we checked that this is a plain Function closure, so there will be an apply method with a MethodType
+            // and the expected signature based on param types
+            val methodType = tpt.tpe.member(nme.apply).atSignature(expectedSig).info.asInstanceOf[MethodType]
             // result might contain paramrefs, so we substitute them with arg termrefs
             val resultTypeWithSubst = methodType.resultType.substParams(methodType, argRefs.map(_.tpe))
-            Typed(result, TypeTree(resultTypeWithSubst).withSpan(fn.span)).withSpan(fn.span)
+            Some(Typed(result, TypeTree(resultTypeWithSubst).withSpan(fn.span)).withSpan(fn.span))
           case None =>
-            result
+            Some(result)
         }
       case tpd.Block(stats, expr) =>
-        seq(stats, rec(expr, topAscription)).withSpan(fn.span)
+        rec(expr, topAscription).map(seq(stats, _).withSpan(fn.span))
       case _ =>
-        val maybeAscribed = topAscription match {
-          case Some(tpt) => Typed(fn, tpt).withSpan(fn.span)
-          case None => fn
-        }
-        maybeAscribed.select(nme.apply).appliedToArgs(argRefs).withSpan(fn.span)
+        None
+    }
+    rec(fn, None) match {
+      case Some(result) => seq(argVals, result)
+      case None =>
+        val expectedSig = Signature.NotAMethod.prependTermParams(args.map(_.tpe), false)
+        fn.selectWithSig(nme.apply, expectedSig).appliedToArgs(args).withSpan(fn.span)
     }
-    seq(argVals, rec(fn, None))
   }
 
   /////////////
diff --git a/tests/run-macros/beta-reduce-inline-result.check b/tests/run-macros/beta-reduce-inline-result.check
index 082514df02f7..3735f7520b82 100644
--- a/tests/run-macros/beta-reduce-inline-result.check
+++ b/tests/run-macros/beta-reduce-inline-result.check
@@ -3,3 +3,6 @@ run-time: 4
 compile-time: 1
 run-time: 1
 run-time: 5
+run-time: 7
+run-time: -1
+run-time: 9
diff --git a/tests/run-macros/beta-reduce-inline-result/Test_2.scala b/tests/run-macros/beta-reduce-inline-result/Test_2.scala
index 978b3e5d2f41..fed7f3dbb96b 100644
--- a/tests/run-macros/beta-reduce-inline-result/Test_2.scala
+++ b/tests/run-macros/beta-reduce-inline-result/Test_2.scala
@@ -14,6 +14,36 @@ object Test {
   inline def dummy4: Int => Int =
     ???
 
+  object I extends (Int => Int) {
+    def apply(i: Int): i.type = i
+  }
+
+  abstract class II extends (Int => Int) {
+    val apply = 123
+  }
+
+  inline def dummy5: II =
+    (i: Int) => i + 1
+
+  abstract class III extends (Int => Int) {
+    def impl(i: Int): Int
+    def apply(i: Int): Int = -1
+  }
+
+  inline def dummy6: III =
+    (i: Int) => i + 1
+
+  abstract class IV extends (Int => Int) {
+    def apply(s: String): String
+  }
+
+  abstract class V extends IV {
+    def apply(s: String): String = "gotcha"
+  }
+
+  inline def dummy7: IV =
+    { (i: Int) => i + 1 } : V
+
   def main(argv : Array[String]) : Unit = {
     println(code"compile-time: ${Macros.betaReduce(dummy1)(3)}")
     println(s"run-time: ${Macros.betaReduce(dummy1)(3)}")
@@ -27,7 +57,21 @@ object Test {
     def throwsNotImplemented2 = Macros.betaReduce(dummy4)(6)
 
     // make sure paramref types work when inlining is not possible
-    println(s"run-time: ${Macros.betaReduce(Predef.identity)(5)}")
+    println(s"run-time: ${Macros.betaReduce(I)(5)}")
+
+    // -- cases below are non-function types, which are currently not inlined for simplicity but may be in the future
+    // (also, this tests that we return something valid when we see a closure that we can't inline)
+
+    // A non-function type with an apply value that can be confused with the apply method.
+    println(s"run-time: ${Macros.betaReduce(dummy5)(6)}")
+
+    // should print -1 (without inlining), because the apparent apply method actually
+    // has nothing to do with the function literal
+    println(s"run-time: ${Macros.betaReduce(dummy6)(7)}")
+
+    // the literal does contain the implementation of the apply method, but there are two abstract apply methods
+    // in the outermost abstract type
+    println(s"run-time: ${Macros.betaReduce(dummy7)(8)}")
   }
 }
 
diff --git a/tests/run-macros/quote-inline-function.check b/tests/run-macros/quote-inline-function.check
index 958a2c455b9d..208b29543304 100644
--- a/tests/run-macros/quote-inline-function.check
+++ b/tests/run-macros/quote-inline-function.check
@@ -3,13 +3,11 @@ Normal function
   var i: scala.Int = 0
   val j: scala.Int = 5
   while (i.<(j)) {
-    val x$1: scala.Int = i
-    f.apply(x$1)
+    f.apply(i)
     i = i.+(1)
   }
   while ({
-    val x$2: scala.Int = i
-    f.apply(x$2)
+    f.apply(i)
     i = i.+(1)
     i.<(j)
   }) ()
@@ -20,13 +18,11 @@ By name function
   var i: scala.Int = 0
   val j: scala.Int = 5
   while (i.<(j)) {
-    val x$3: scala.Int = i
-    f.apply(x$3)
+    f.apply(i)
     i = i.+(1)
   }
   while ({
-    val x$4: scala.Int = i
-    f.apply(x$4)
+    f.apply(i)
     i = i.+(1)
     i.<(j)
   }) ()
diff --git a/tests/run-staging/i3876-c.check b/tests/run-staging/i3876-c.check
index dca23bcfdf11..38c85ed40818 100644
--- a/tests/run-staging/i3876-c.check
+++ b/tests/run-staging/i3876-c.check
@@ -6,5 +6,5 @@
 
   (f: scala.Function1[scala.Int, scala.Int] {
     def apply(x: scala.Int): scala.Int
-  }).apply(3)
-}
+  })
+}.apply(3)