diff --git a/compiler/testData/codegen/box/builderInference/issues/kt53639.kt b/compiler/testData/codegen/box/builderInference/issues/kt53639.kt
new file mode 100644
index 00000000000..9236053eb09
--- /dev/null
+++ b/compiler/testData/codegen/box/builderInference/issues/kt53639.kt
@@ -0,0 +1,41 @@
+// ISSUE: KT-53639
+
+// IGNORE_LIGHT_ANALYSIS
+// IGNORE_BACKEND: ANY
+// REASON: red code in K1 (see corresponding diagnostic test)
+// REASON: compile-time failure in K2/JVM (java.lang.IllegalStateException: Cannot serialize error type: ERROR CLASS: Cannot infer argument for type parameter PTV)
+// REASON: compile-time failure in K2/Native, K2/WASM, K2/JS (org.jetbrains.kotlin.backend.common.linkage.issues.IrDisallowedErrorNode: Class found but error nodes are not allowed)
+
+fun box(): String {
+    val buildee = initializeAndBuild(
+        { build { setTypeVariable(TargetType()) } },
+        { placeholderExtensionInvokeOnBuildee() },
+    )
+    consumeTargetTypeBuildee(buildee)
+    return "OK"
+}
+
+
+
+
+class TargetType
+
+fun consumeTargetTypeBuildee(value: Buildee<TargetType>) {}
+
+class Buildee<TV> {
+    fun setTypeVariable(value: TV) { storage = value }
+    private var storage: TV = TargetType() as TV
+}
+
+fun <ETV> Buildee<ETV>.placeholderExtensionInvokeOnBuildee() {}
+
+fun <PTV> build(instructions: Buildee<PTV>.() -> Unit): Buildee<PTV> {
+    return Buildee<PTV>().apply(instructions)
+}
+
+fun <PTV> initializeAndBuild(
+    initializer: () -> Buildee<PTV>,
+    instructions: Buildee<PTV>.() -> Unit
+): Buildee<PTV> {
+    return initializer().apply(instructions)
+}
diff --git a/compiler/testData/diagnostics/tests/builderInference/issues/kt53639.fir.kt b/compiler/testData/diagnostics/tests/builderInference/issues/kt53639.fir.kt
new file mode 100644
index 00000000000..d79f49cd6e3
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/builderInference/issues/kt53639.fir.kt
@@ -0,0 +1,35 @@
+// ISSUE: KT-53639
+// CHECK_TYPE_WITH_EXACT
+
+fun test() {
+    val buildee = initializeAndBuild(
+        { build { setTypeVariable(TargetType()) } },
+        { placeholderExtensionInvokeOnBuildee() },
+    )
+    // exact type equality check — turns unexpected compile-time behavior into red code
+    // considered to be non-user-reproducible code for the purposes of these tests
+    checkExactType<Buildee<TargetType>>(buildee)
+}
+
+
+
+
+class TargetType
+
+class Buildee<TV> {
+    fun setTypeVariable(value: TV) { storage = value }
+    private var storage: TV = null!!
+}
+
+fun <ETV> Buildee<ETV>.placeholderExtensionInvokeOnBuildee() {}
+
+fun <PTV> build(instructions: Buildee<PTV>.() -> Unit): Buildee<PTV> {
+    return Buildee<PTV>().apply(instructions)
+}
+
+fun <PTV> initializeAndBuild(
+    initializer: () -> Buildee<PTV>,
+    instructions: Buildee<PTV>.() -> Unit
+): Buildee<PTV> {
+    return initializer().apply(instructions)
+}
diff --git a/compiler/testData/diagnostics/tests/builderInference/issues/kt53639.kt b/compiler/testData/diagnostics/tests/builderInference/issues/kt53639.kt
new file mode 100644
index 00000000000..dc141e7c9f3
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/builderInference/issues/kt53639.kt
@@ -0,0 +1,35 @@
+// ISSUE: KT-53639
+// CHECK_TYPE_WITH_EXACT
+
+fun test() {
+    val buildee = <!INFERRED_INTO_DECLARED_UPPER_BOUNDS!>initializeAndBuild<!>(
+        { build <!BUILDER_INFERENCE_MULTI_LAMBDA_RESTRICTION!>{ setTypeVariable(TargetType()) }<!> },
+        <!BUILDER_INFERENCE_MULTI_LAMBDA_RESTRICTION!>{ placeholderExtensionInvokeOnBuildee() }<!>,
+    )
+    // exact type equality check — turns unexpected compile-time behavior into red code
+    // considered to be non-user-reproducible code for the purposes of these tests
+    checkExactType<Buildee<TargetType>>(<!TYPE_MISMATCH("Buildee<TargetType>; Buildee<Any?>"), TYPE_MISMATCH("Buildee<Any?>; Buildee<TargetType>")!>buildee<!>)
+}
+
+
+
+
+class TargetType
+
+class Buildee<TV> {
+    fun setTypeVariable(value: TV) { storage = value }
+    private var storage: TV = null!!
+}
+
+fun <ETV> Buildee<ETV>.placeholderExtensionInvokeOnBuildee() {}
+
+fun <PTV> build(instructions: Buildee<PTV>.() -> Unit): Buildee<PTV> {
+    return Buildee<PTV>().apply(instructions)
+}
+
+fun <PTV> initializeAndBuild(
+    initializer: () -> Buildee<PTV>,
+    instructions: Buildee<PTV>.() -> Unit
+): Buildee<PTV> {
+    return initializer().apply(instructions)
+}