diff --git a/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java b/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java
index e71df75af78..3719cd80c34 100644
--- a/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java
+++ b/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java
@@ -2382,6 +2382,11 @@ public class FirOldFrontendDiagnosticsTestGenerated extends AbstractFirOldFronte
                 runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt12286.kt");
             }
 
+            @TestMetadata("kt35896.kt")
+            public void testKt35896() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt35896.kt");
+            }
+
             @TestMetadata("kt7470.kt")
             public void testKt7470() throws Exception {
                 runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt7470.kt");
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/ResolvedAtomCompleter.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/ResolvedAtomCompleter.kt
index 7d10dfd76f2..18a56e90f77 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/ResolvedAtomCompleter.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/tower/ResolvedAtomCompleter.kt
@@ -23,6 +23,7 @@ import org.jetbrains.kotlin.resolve.calls.checkers.CallCheckerContext
 import org.jetbrains.kotlin.resolve.calls.context.BasicCallResolutionContext
 import org.jetbrains.kotlin.resolve.calls.context.ContextDependency
 import org.jetbrains.kotlin.resolve.calls.inference.components.NewTypeSubstitutor
+import org.jetbrains.kotlin.resolve.calls.inference.components.NewTypeSubstitutorByConstructorMap
 import org.jetbrains.kotlin.resolve.calls.model.*
 import org.jetbrains.kotlin.resolve.calls.smartcasts.DataFlowInfo
 import org.jetbrains.kotlin.resolve.calls.smartcasts.DataFlowValueFactory
@@ -255,6 +256,16 @@ class ResolvedAtomCompleter(
         }
     }
 
+    private fun NewTypeSubstitutor.toOldSubstitution(): TypeSubstitution = object : TypeSubstitution() {
+        override fun get(key: KotlinType): TypeProjection? {
+            return safeSubstitute(key.unwrap()).takeIf { it !== key }?.asTypeProjection()
+        }
+
+        override fun isEmpty(): Boolean {
+            return isEmpty
+        }
+    }
+
     private fun completeCallableReference(
         resolvedAtom: ResolvedCallableReferenceAtom
     ) {
@@ -264,20 +275,14 @@ class ResolvedAtomCompleter(
             return
         }
         val resultTypeParameters =
-            callableCandidate.freshSubstitutor!!.freshVariables.map { resultSubstitutor.safeSubstitute(it.defaultType).asTypeProjection() }
+            callableCandidate.freshSubstitutor!!.freshVariables.map { resultSubstitutor.safeSubstitute(it.defaultType) }
 
-        val firstSubstitutor = IndexedParametersSubstitution(callableCandidate.candidate.typeParameters, resultTypeParameters)
-        val secondSubstitution = object : TypeSubstitution() {
-            override fun get(key: KotlinType): TypeProjection? {
-                return resultSubstitutor.safeSubstitute(key.unwrap()).takeIf { it !== key }?.asTypeProjection()
-            }
+        val typeParametersSubstitutor = NewTypeSubstitutorByConstructorMap((callableCandidate.candidate.typeParameters.map { it.typeConstructor } zip resultTypeParameters).toMap())
 
-            override fun isEmpty(): Boolean {
-                return resultSubstitutor.isEmpty
-            }
-        }
+        val firstSubstitution = typeParametersSubstitutor.toOldSubstitution()
+        val secondSubstitution = resultSubstitutor.toOldSubstitution()
         val resultSubstitutor = TypeSubstitutor.createChainedSubstitutor(
-            firstSubstitutor,
+            firstSubstitution,
             secondSubstitution
         )
 
diff --git a/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.fir.kt b/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.fir.kt
new file mode 100644
index 00000000000..d726da863a1
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.fir.kt
@@ -0,0 +1,15 @@
+// !LANGUAGE: +NewInference
+// !DIAGNOSTICS: -UNUSED_PARAMETER
+// ISSUE: KT-35896
+
+interface B<E, SC>
+
+class Inv<T>
+
+class Foo<T>(x: Int): B<T, Inv<T>>
+
+fun <T1, T2, S> bar(list: T2, fn: (S) -> B<T1, T2>) {}
+
+fun <K> foo(list: Inv<K>) {
+    bar(list, ::Foo)
+}
diff --git a/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.kt b/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.kt
new file mode 100644
index 00000000000..d726da863a1
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.kt
@@ -0,0 +1,15 @@
+// !LANGUAGE: +NewInference
+// !DIAGNOSTICS: -UNUSED_PARAMETER
+// ISSUE: KT-35896
+
+interface B<E, SC>
+
+class Inv<T>
+
+class Foo<T>(x: Int): B<T, Inv<T>>
+
+fun <T1, T2, S> bar(list: T2, fn: (S) -> B<T1, T2>) {}
+
+fun <K> foo(list: Inv<K>) {
+    bar(list, ::Foo)
+}
diff --git a/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.txt b/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.txt
new file mode 100644
index 00000000000..b6c31ef482d
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/callableReference/generic/kt35896.txt
@@ -0,0 +1,24 @@
+package
+
+public fun </*0*/ T1, /*1*/ T2, /*2*/ S> bar(/*0*/ list: T2, /*1*/ fn: (S) -> B<T1, T2>): kotlin.Unit
+public fun </*0*/ K> foo(/*0*/ list: Inv<K>): kotlin.Unit
+
+public interface B</*0*/ E, /*1*/ SC> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class Foo</*0*/ T> : B<T, Inv<T>> {
+    public constructor Foo</*0*/ T>(/*0*/ x: kotlin.Int)
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class Inv</*0*/ T> {
+    public constructor Inv</*0*/ T>()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.ni.txt b/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.ni.txt
index 1765ae73d4d..9a8e2305c9a 100644
--- a/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.ni.txt
+++ b/compiler/testData/diagnostics/tests/typealias/noApproximationInTypeAliasArgumentSubstitution.ni.txt
@@ -1,7 +1,7 @@
 package
 
 public fun bar1(/*0*/ a: Array2D<kotlin.Int> /* = kotlin.Array<kotlin.Array<kotlin.Int>> */): Array2D<out kotlin.Number> /* = kotlin.Array<kotlin.Array<out kotlin.Number>> */
-public fun bar2(/*0*/ m: TMap<*> /* = kotlin.collections.Map<*, *> */): kotlin.collections.Map<out kotlin.Any?, kotlin.Any?>
+public fun bar2(/*0*/ m: TMap<*> /* = kotlin.collections.Map<*, *> */): kotlin.collections.Map<*, *>
 public fun foo1(/*0*/ a: Array2D<out kotlin.Number> /* = kotlin.Array<kotlin.Array<out kotlin.Number>> */): Array2D<out kotlin.Number> /* = kotlin.Array<kotlin.Array<out kotlin.Number>> */
 public fun </*0*/ T> foo2(/*0*/ m: TMap<T> /* = kotlin.collections.Map<T, T> */): TMap<T> /* = kotlin.collections.Map<T, T> */
 public typealias Array2D</*0*/ T> = kotlin.Array<kotlin.Array<T>>
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 7cc557bd6a7..c34dcdf0e64 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -2389,6 +2389,11 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                     runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt12286.kt");
                 }
 
+                @TestMetadata("kt35896.kt")
+                public void testKt35896() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt35896.kt");
+                }
+
                 @TestMetadata("kt7470.kt")
                 public void testKt7470() throws Exception {
                     runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt7470.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
index 3fc3d8e6e4e..f4b571afb54 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
@@ -2384,6 +2384,11 @@ public class DiagnosticsUsingJavacTestGenerated extends AbstractDiagnosticsUsing
                     runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt12286.kt");
                 }
 
+                @TestMetadata("kt35896.kt")
+                public void testKt35896() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt35896.kt");
+                }
+
                 @TestMetadata("kt7470.kt")
                 public void testKt7470() throws Exception {
                     runTest("compiler/testData/diagnostics/tests/callableReference/generic/kt7470.kt");