diff --git a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFE10TestdataTestGenerated.java b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFE10TestdataTestGenerated.java
index 79676debc98..0810318e0ea 100644
--- a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFE10TestdataTestGenerated.java
+++ b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosticCompilerTestFE10TestdataTestGenerated.java
@@ -36426,6 +36426,12 @@ public class DiagnosticCompilerTestFE10TestdataTestGenerated extends AbstractDia
                 runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/unsafeAssignment_noReport.kt");
             }
 
+            @Test
+            @TestMetadata("upperBoundViolation.kt")
+            public void testUpperBoundViolation() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt");
+            }
+
             @Test
             @TestMetadata("useInferenceInformationFromExtension.kt")
             public void testUseInferenceInformationFromExtension() throws Exception {
diff --git a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFE10TestDataTestGenerated.java b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFE10TestDataTestGenerated.java
index c407502148d..14c84f20a6c 100644
--- a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFE10TestDataTestGenerated.java
+++ b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/LLFirPreresolvedReversedDiagnosticCompilerFE10TestDataTestGenerated.java
@@ -36426,6 +36426,12 @@ public class LLFirPreresolvedReversedDiagnosticCompilerFE10TestDataTestGenerated
                 runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/unsafeAssignment_noReport.kt");
             }
 
+            @Test
+            @TestMetadata("upperBoundViolation.kt")
+            public void testUpperBoundViolation() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt");
+            }
+
             @Test
             @TestMetadata("useInferenceInformationFromExtension.kt")
             public void testUseInferenceInformationFromExtension() throws Exception {
diff --git a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeOldFrontendDiagnosticsTestGenerated.java b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeOldFrontendDiagnosticsTestGenerated.java
index 3bb8401886f..5b205cca8af 100644
--- a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeOldFrontendDiagnosticsTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirLightTreeOldFrontendDiagnosticsTestGenerated.java
@@ -36426,6 +36426,12 @@ public class FirLightTreeOldFrontendDiagnosticsTestGenerated extends AbstractFir
                 runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/unsafeAssignment_noReport.kt");
             }
 
+            @Test
+            @TestMetadata("upperBoundViolation.kt")
+            public void testUpperBoundViolation() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt");
+            }
+
             @Test
             @TestMetadata("useInferenceInformationFromExtension.kt")
             public void testUseInferenceInformationFromExtension() throws Exception {
diff --git a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiOldFrontendDiagnosticsTestGenerated.java b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiOldFrontendDiagnosticsTestGenerated.java
index f1946c5d459..919ed7c3999 100644
--- a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiOldFrontendDiagnosticsTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirPsiOldFrontendDiagnosticsTestGenerated.java
@@ -36522,6 +36522,12 @@ public class FirPsiOldFrontendDiagnosticsTestGenerated extends AbstractFirPsiDia
                 runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/unsafeAssignment_noReport.kt");
             }
 
+            @Test
+            @TestMetadata("upperBoundViolation.kt")
+            public void testUpperBoundViolation() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt");
+            }
+
             @Test
             @TestMetadata("useInferenceInformationFromExtension.kt")
             public void testUseInferenceInformationFromExtension() throws Exception {
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
index 606dd42b517..b220ed76324 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/Errors.java
@@ -884,6 +884,7 @@ public interface Errors {
     DiagnosticFactory4<PsiElement, KotlinType, String, String, BuilderLambdaLabelingInfo> STUB_TYPE_IN_RECEIVER_CAUSES_AMBIGUITY = DiagnosticFactory4.create(ERROR);
     DiagnosticFactory2<PsiElement, Name, Name> BUILDER_INFERENCE_MULTI_LAMBDA_RESTRICTION = DiagnosticFactory2.create(ERROR);
     DiagnosticFactory2<PsiElement, Name, Name> BUILDER_INFERENCE_STUB_RECEIVER = DiagnosticFactory2.create(ERROR);
+    DiagnosticFactory4<KtElement, Name, Name, KotlinType, KotlinType> UPPER_BOUND_VIOLATION_IN_CONSTRAINT = DiagnosticFactory4.create(ERROR);
 
     DiagnosticFactory1<PsiElement, Collection<? extends ResolvedCall<?>>> NONE_APPLICABLE = DiagnosticFactory1.create(ERROR);
     DiagnosticFactory1<PsiElement, Collection<? extends ResolvedCall<?>>> CANNOT_COMPLETE_RESOLVE = DiagnosticFactory1.create(ERROR);
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
index 47c87785a84..af52fae260c 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/diagnostics/rendering/DefaultErrorMessages.java
@@ -1006,6 +1006,7 @@ public class DefaultErrorMessages {
         MAP.put(STUB_TYPE_IN_RECEIVER_CAUSES_AMBIGUITY, "The type of a receiver hasn''t been inferred yet. To disambiguate this call, explicitly cast it to `{0}` if you want the builder''s type parameter(s) `{1}` to be inferred to `{2}`.", RENDER_TYPE, STRING, STRING, null);
         MAP.put(BUILDER_INFERENCE_MULTI_LAMBDA_RESTRICTION, "Unstable inference behaviour with multiple lambdas. Please either specify the type argument for generic parameter `{0}` of `{1}` explicitly", TO_STRING, TO_STRING);
         MAP.put(BUILDER_INFERENCE_STUB_RECEIVER, "The type of a receiver hasn''t been inferred yet. Please specify type argument for generic parameter `{0}` of `{1}` explicitly", TO_STRING, TO_STRING);
+        MAP.put(UPPER_BOUND_VIOLATION_IN_CONSTRAINT, "Upper bound violation for generic parameter `{0}` of `{1}`: {3} is not a subtype of {2}", TO_STRING, TO_STRING, RENDER_TYPE, RENDER_TYPE);
         MAP.put(NONE_APPLICABLE, "None of the following functions can be called with the arguments supplied: {0}", AMBIGUOUS_CALLS);
         MAP.put(CANNOT_COMPLETE_RESOLVE, "Cannot choose among the following candidates without completing type inference: {0}", AMBIGUOUS_CALLS);
         MAP.put(UNRESOLVED_REFERENCE_WRONG_RECEIVER, "Unresolved reference. None of the following candidates is applicable because of receiver type mismatch: {0}", AMBIGUOUS_CALLS);
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
index 420016dbe1a..bb8d109e5e7 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
@@ -513,7 +513,20 @@ class DiagnosticReporterByTrackingStrategy(
                 // some error reported later?
             }
             is CallableReferenceConstraintPosition<*> -> TODO()
-            is DeclaredUpperBoundConstraintPosition<*> -> TODO()
+            is DeclaredUpperBoundConstraintPosition<*> -> {
+                val originalCall = (position as DeclaredUpperBoundConstraintPositionImpl).kotlinCall
+                val typeParameterDescriptor = position.typeParameter
+                val ownerDescriptor = typeParameterDescriptor.containingDeclaration
+                trace.reportDiagnosticOnce(
+                    UPPER_BOUND_VIOLATION_IN_CONSTRAINT.on(
+                        (originalCall as PSIKotlinCall).psiCall.callElement,
+                        typeParameterDescriptor.name,
+                        ownerDescriptor.name,
+                        error.upperKotlinType,
+                        error.lowerKotlinType
+                    )
+                )
+            }
             is DelegatedPropertyConstraintPosition<*> -> {
                 // DELEGATE_SPECIAL_FUNCTION_NONE_APPLICABLE, reported later
             }
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CallableReferenceArgumentResolver.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CallableReferenceArgumentResolver.kt
index 891a7e912cd..fd13bdb66f4 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CallableReferenceArgumentResolver.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/CallableReferenceArgumentResolver.kt
@@ -39,6 +39,7 @@ class CallableReferenceArgumentResolver(val callableReferenceOverloadConflictRes
         if (chosenCandidate != null) {
             val toFreshSubstitutor = CreateFreshVariablesSubstitutor.createToFreshVariableSubstitutorAndAddInitialConstraints(
                 chosenCandidate.candidate,
+                resolvedAtom.atom.call,
                 csBuilder
             )
             chosenCandidate.addConstraints(csBuilder, toFreshSubstitutor, callableReference = argument)
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/ResolutionParts.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/ResolutionParts.kt
index 2a5a399e91c..f9511aaa3d0 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/ResolutionParts.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/ResolutionParts.kt
@@ -124,7 +124,7 @@ internal object CreateFreshVariablesSubstitutor : ResolutionPart() {
             if (candidateDescriptor.typeParameters.isEmpty())
                 FreshVariableNewTypeSubstitutor.Empty
             else
-                createToFreshVariableSubstitutorAndAddInitialConstraints(candidateDescriptor, csBuilder)
+                createToFreshVariableSubstitutorAndAddInitialConstraints(candidateDescriptor, resolvedCall.atom, csBuilder)
 
         val knownTypeParametersSubstitutor = knownTypeParametersResultingSubstitutor?.let {
             createKnownParametersFromFreshVariablesSubstitutor(toFreshVariables, it)
@@ -220,6 +220,7 @@ internal object CreateFreshVariablesSubstitutor : ResolutionPart() {
 
     fun createToFreshVariableSubstitutorAndAddInitialConstraints(
         candidateDescriptor: CallableDescriptor,
+        kotlinCall: KotlinCall,
         csBuilder: ConstraintSystemOperation
     ): FreshVariableNewTypeSubstitutor {
         val typeParameters = candidateDescriptor.typeParameters
@@ -242,7 +243,7 @@ internal object CreateFreshVariablesSubstitutor : ResolutionPart() {
         for (index in typeParameters.indices) {
             val typeParameter = typeParameters[index]
             val freshVariable = freshTypeVariables[index]
-            val position = DeclaredUpperBoundConstraintPositionImpl(typeParameter)
+            val position = DeclaredUpperBoundConstraintPositionImpl(typeParameter, kotlinCall)
 
             for (upperBound in typeParameter.upperBounds) {
                 freshVariable.addSubtypeConstraint(upperBound, position)
@@ -263,7 +264,7 @@ internal object CreateFreshVariablesSubstitutor : ResolutionPart() {
                     // there can be null in case we already captured type parameter in outer class (in case of inner classes)
                     // see test innerClassTypeAliasConstructor.kt
                     val originalTypeParameter = originalTypeParameters.getOrNull(originalIndex) ?: continue
-                    val position = DeclaredUpperBoundConstraintPositionImpl(originalTypeParameter)
+                    val position = DeclaredUpperBoundConstraintPositionImpl(originalTypeParameter, kotlinCall)
                     for (upperBound in originalTypeParameter.upperBounds) {
                         freshVariable.addSubtypeConstraint(upperBound, position)
                     }
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/model/ConstraintPositionAndErrorsImpl.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/model/ConstraintPositionAndErrorsImpl.kt
index 649f53576e3..9edb4b0478f 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/model/ConstraintPositionAndErrorsImpl.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/model/ConstraintPositionAndErrorsImpl.kt
@@ -28,7 +28,8 @@ class BuilderInferenceSubstitutionConstraintPositionImpl(
 class ExpectedTypeConstraintPositionImpl(topLevelCall: KotlinCall) : ExpectedTypeConstraintPosition<KotlinCall>(topLevelCall)
 
 class DeclaredUpperBoundConstraintPositionImpl(
-    typeParameter: TypeParameterDescriptor
+    typeParameter: TypeParameterDescriptor,
+    val kotlinCall: KotlinCall
 ) : DeclaredUpperBoundConstraintPosition<TypeParameterDescriptor>(typeParameter) {
     override fun toString() = "DeclaredUpperBound ${typeParameter.name} from ${typeParameter.containingDeclaration}"
 }
diff --git a/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.diag.txt b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.diag.txt
new file mode 100644
index 00000000000..377e0ac3601
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.diag.txt
@@ -0,0 +1,4 @@
+/upperBoundViolation.kt:9:9: error: upper bound violation for generic parameter `T` of `printGenericNumber`: String is not a subtype of Number
+        printGenericNumber(this[0])
+        ^
+
diff --git a/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.fir.kt b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.fir.kt
new file mode 100644
index 00000000000..d2aa03e2109
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.fir.kt
@@ -0,0 +1,11 @@
+// !RENDER_DIAGNOSTICS_FULL_TEXT
+// ISSUE: KT-55055
+// FIR_DUMP
+fun <T : Number> printGenericNumber(t: T) = println("Number is $t")
+
+fun main() {
+    buildList { // inferred into MutableList<String>
+        add("Boom")
+        printGenericNumber(this[0])
+    }
+}
diff --git a/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.fir.txt b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.fir.txt
new file mode 100644
index 00000000000..a1bd80e056d
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.fir.txt
@@ -0,0 +1,11 @@
+FILE: upperBoundViolation.fir.kt
+    public final fun <T : R|kotlin/Number|> printGenericNumber(t: R|T|): R|kotlin/Unit| {
+        ^printGenericNumber R|kotlin/io/println|(<strcat>(String(Number is ), R|<local>/t|))
+    }
+    public final fun main(): R|kotlin/Unit| {
+        R|kotlin/collections/buildList|<R|kotlin/String|>(<L> = buildList@fun R|kotlin/collections/MutableList<kotlin/String>|.<anonymous>(): R|kotlin/Unit| <inline=Inline, kind=EXACTLY_ONCE>  {
+            this@R|special/anonymous|.R|SubstitutionOverride<kotlin/collections/MutableList.add: R|kotlin/Boolean|>|(String(Boom))
+            R|/printGenericNumber|<R|kotlin/String|>(this@R|special/anonymous|.R|SubstitutionOverride<kotlin/collections/MutableList.get: R|Stub (chain inference): TypeVariable(E)|>|(Int(0)))
+        }
+        )
+    }
diff --git a/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt
new file mode 100644
index 00000000000..32817f8e72b
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt
@@ -0,0 +1,11 @@
+// !RENDER_DIAGNOSTICS_FULL_TEXT
+// ISSUE: KT-55055
+// FIR_DUMP
+fun <T : Number> printGenericNumber(t: T) = println("Number is $t")
+
+fun main() {
+    buildList { // inferred into MutableList<String>
+        add("Boom")
+        <!UPPER_BOUND_VIOLATION_IN_CONSTRAINT!>printGenericNumber(this[0])<!>
+    }
+}
diff --git a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java
index cb0445c422c..e83ad9480ac 100644
--- a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java
+++ b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java
@@ -37258,6 +37258,12 @@ public class DiagnosticTestGenerated extends AbstractDiagnosticTest {
                 runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/unsafeAssignment_noReport.kt");
             }
 
+            @Test
+            @TestMetadata("upperBoundViolation.kt")
+            public void testUpperBoundViolation() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/builderInference/upperBoundViolation.kt");
+            }
+
             @Test
             @TestMetadata("useInferenceInformationFromExtension.kt")
             public void testUseInferenceInformationFromExtension() throws Exception {