diff --git a/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.fir.txt b/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.fir.txt
index b472efdcd77..42f7b68fa54 100644
--- a/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.fir.txt
+++ b/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.fir.txt
@@ -85,3 +85,58 @@ FILE: upperBoundViolated.kt
         public get(): R|NumberPhile<kotlin/Int>|
     public final val np2: R|NumberPhile<ERROR CLASS: Cannot infer argument for type parameter T>| = <Inapplicable(INAPPLICABLE): /NumberPhile.NumberPhile>#<R|ERROR CLASS: Cannot infer argument for type parameter T|>(String(Test))
         public get(): R|NumberPhile<ERROR CLASS: Cannot infer argument for type parameter T>|
+    public final class Test1<S1 : R|Test1<S1, K>|, K : R|kotlin/Any|> : R|kotlin/Any| {
+        public constructor<S1 : R|Test1<S1, K>|, K : R|kotlin/Any|>(): R|Test1<S1, K>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test2<S2 : R|Test1<S2, *>|> : R|kotlin/Any| {
+        public constructor<S2 : R|Test1<S2, *>|>(): R|Test2<S2>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test3<S3 : R|Test3<S3, in K>|, K : R|kotlin/Any|> : R|kotlin/Any| {
+        public constructor<S3 : R|Test3<S3, in K>|, K : R|kotlin/Any|>(): R|Test3<S3, K>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test4<S4 : R|Test3<S4, out kotlin/Any>|> : R|kotlin/Any| {
+        public constructor<S4 : R|Test3<S4, out kotlin/Any>|>(): R|Test4<S4>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test5<S5 : R|Test5<S5, in K>|, K : R|kotlin/Any|> : R|kotlin/Any| {
+        public constructor<S5 : R|Test5<S5, in K>|, K : R|kotlin/Any|>(): R|Test5<S5, K>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test6<S6 : R|Test5<S6, in kotlin/Any>|> : R|kotlin/Any| {
+        public constructor<S6 : R|Test5<S6, in kotlin/Any>|>(): R|Test6<S6>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test7<S7 : R|Test7<S7, in K>|, K : R|kotlin/CharSequence|> : R|kotlin/Any| {
+        public constructor<S7 : R|Test7<S7, in K>|, K : R|kotlin/CharSequence|>(): R|Test7<S7, K>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Test8<S8 : R|Test7<S8, in kotlin/Any>|> : R|kotlin/Any| {
+        public constructor<S8 : R|Test7<S8, in kotlin/Any>|>(): R|Test8<S8>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final class Class<V : R|kotlin/Any|> : R|kotlin/Any| {
+        public constructor<V : R|kotlin/Any|>(): R|Class<V>| {
+            super<R|kotlin/Any|>()
+        }
+
+    }
+    public final typealias Alias<V1> = R|(Class<V1>) -> kotlin/Boolean|
diff --git a/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.kt b/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.kt
index d1904da748e..2266b07eb4b 100644
--- a/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.kt
+++ b/compiler/fir/analysis-tests/testData/resolve/diagnostics/upperBoundViolated.kt
@@ -50,3 +50,19 @@ val test8 = NL<<!UPPER_BOUND_VIOLATED!>String<!>>()
 class NumberPhile<T: Number>(x: T)
 val np1 = NumberPhile(10)
 val np2 = NumberPhile(<!ARGUMENT_TYPE_MISMATCH!>"Test"<!>)
+
+class Test1<S1 : Test1<S1, K>, K : Any>
+class Test2<S2 : Test1<S2, *>>
+
+class Test3<S3 : Test3<S3, in K>, K : Any>
+class Test4<S4 : Test3<<!UPPER_BOUND_VIOLATED!>S4<!>, out Any>>
+
+class Test5<S5 : Test5<S5, in K>, K : Any>
+class Test6<S6 : Test5<S6, in Any>>
+
+class Test7<S7 : Test7<S7, in K>, K : CharSequence>
+class Test8<S8 : Test7<S8, <!UPPER_BOUND_VIOLATED!>in Any<!>>>
+
+class Class<V : Any>
+typealias Alias <V1> = (Class<V1>) -> Boolean
+
diff --git a/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/expression/FirUpperBoundViolatedChecker.kt b/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/expression/FirUpperBoundViolatedChecker.kt
index 6b38ec805d4..7f92ee6e889 100644
--- a/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/expression/FirUpperBoundViolatedChecker.kt
+++ b/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/checkers/expression/FirUpperBoundViolatedChecker.kt
@@ -47,7 +47,10 @@ object FirUpperBoundViolatedClassChecker : FirBasicDeclarationChecker() {
             checkUpperBoundViolated(declaration.expandedTypeRef, context, reporter, isIgnoreTypeParameters = true)
         } else if (declaration is FirCallableDeclaration<*>) {
             if (declaration.returnTypeRef.source?.kind !is FirFakeSourceElementKind) {
-                checkUpperBoundViolated(declaration.returnTypeRef, context, reporter)
+                checkUpperBoundViolated(
+                    declaration.returnTypeRef, context, reporter,
+                    isIgnoreTypeParameters = context.containingDeclarations.lastOrNull() is FirTypeAlias
+                )
             }
         }
     }
@@ -163,6 +166,14 @@ private fun checkUpperBoundViolated(
             substitution[typeParameterSymbol] = typeArgument.typeRef.coneType
         } else if (typeArgument is ConeKotlinType) {
             substitution[typeParameterSymbol] = typeArgument.type
+        } else if (typeArgument is ConeTypeProjection) {
+            val typeArgumentType = typeArgument.type
+            if (typeArgumentType != null) {
+                substitution[typeParameterSymbol] = typeArgumentType
+            } else {
+                substitution[typeParameterSymbol] =
+                    ConeStubType(ConeTypeVariable("", typeParameterSymbol.toLookupTag()), ConeNullability.NOT_NULL)
+            }
         }
     }
 
@@ -186,7 +197,12 @@ private fun checkUpperBoundViolated(
                 typeArgumentSource = typeRef.source
             }
         } else {
-            typeArgument = type.typeArguments[index] as? ConeKotlinType
+            val localTypeArgument = type.typeArguments[index]
+            if (localTypeArgument is ConeKotlinType) {
+                typeArgument = localTypeArgument
+            } else if (localTypeArgument is ConeKotlinTypeProjection) {
+                typeArgument = localTypeArgument.type
+            }
             val typeArgumentRefAndSource = typeArgumentRefsAndSources?.elementAtOrNull(index)
             if (typeArgumentRefAndSource != null) {
                 typeArgumentTypeRef = typeArgumentRefAndSource.typeRef
@@ -202,10 +218,17 @@ private fun checkUpperBoundViolated(
 
         if (typeArgument != null && typeArgumentSource != null) {
             if (!isIgnoreTypeParameters || (typeArgument.typeArguments.isEmpty() && typeArgument !is ConeTypeParameterType)) {
-                val intersection = typeSystemContext.intersectTypes(typeParameterSymbols[index].fir.bounds.map { it.coneType }) as? ConeKotlinType
+                val intersection =
+                    typeSystemContext.intersectTypes(typeParameterSymbols[index].fir.bounds.map { it.coneType }) as? ConeKotlinType
                 if (intersection != null) {
                     val upperBound = substitutor.substituteOrSelf(intersection)
-                    if (!AbstractTypeChecker.isSubtypeOf(typeSystemContext, typeArgument.type, upperBound, stubTypesEqualToAnything = false)) {
+                    if (!AbstractTypeChecker.isSubtypeOf(
+                            typeSystemContext,
+                            typeArgument.type,
+                            upperBound,
+                            stubTypesEqualToAnything = true
+                        )
+                    ) {
                         val factory =
                             if (isTypeAlias) FirErrors.UPPER_BOUND_VIOLATED_IN_TYPEALIAS_EXPANSION else FirErrors.UPPER_BOUND_VIOLATED
                         reporter.reportOn(typeArgumentSource, factory, upperBound, typeArgument.type, context)