diff --git a/mypy/typeops.py b/mypy/typeops.py
index b26aa8b3ea73..eae6b0c39af5 100644
--- a/mypy/typeops.py
+++ b/mypy/typeops.py
@@ -5,7 +5,7 @@
       since these may assume that MROs are ready.
 """
 
-from typing import cast, Optional, List, Sequence, Set
+from typing import cast, Optional, List, Sequence, Set, Dict
 import sys
 
 from mypy.types import (
@@ -300,6 +300,11 @@ def make_simplified_union(items: Sequence[Type],
     * [int, int] -> int
     * [int, Any] -> Union[int, Any] (Any types are not simplified away!)
     * [Any, Any] -> Any
+    * [Literal[Foo.A], Literal[Foo.B]] -> Foo (assuming Foo is a enum with two variants A and B)
+
+    Note that we only collapse enum literals into the original enum when all literal variants
+    are present. Since enums are effectively final and there are a fixed number of possible
+    variants, it's safe to treat those two types as equivalent.
 
     Note: This must NOT be used during semantic analysis, since TypeInfos may not
           be fully initialized.
@@ -316,6 +321,8 @@ def make_simplified_union(items: Sequence[Type],
 
     from mypy.subtypes import is_proper_subtype
 
+    enums_found = {}  # type: Dict[str, int]
+    enum_max_members = {}  # type: Dict[str, int]
     removed = set()  # type: Set[int]
     for i, ti in enumerate(items):
         if i in removed: continue
@@ -327,13 +334,52 @@ def make_simplified_union(items: Sequence[Type],
                 removed.add(j)
                 cbt = cbt or tj.can_be_true
                 cbf = cbf or tj.can_be_false
+
         # if deleted subtypes had more general truthiness, use that
         if not ti.can_be_true and cbt:
-            items[i] = true_or_false(ti)
+            items[i] = ti = true_or_false(ti)
         elif not ti.can_be_false and cbf:
-            items[i] = true_or_false(ti)
+            items[i] = ti = true_or_false(ti)
+
+        # Keep track of all enum Literal types we encounter, in case
+        # we can coalesce them together
+        if isinstance(ti, LiteralType) and ti.is_enum_literal():
+            enum_name = ti.fallback.type.fullname()
+            if enum_name not in enum_max_members:
+                enum_max_members[enum_name] = len(get_enum_values(ti.fallback))
+            enums_found[enum_name] = enums_found.get(enum_name, 0) + 1
+        if isinstance(ti, Instance) and ti.type.is_enum:
+            enum_name = ti.type.fullname()
+            if enum_name not in enum_max_members:
+                enum_max_members[enum_name] = len(get_enum_values(ti))
+            enums_found[enum_name] = enum_max_members[enum_name]
+
+    enums_to_compress = {n for (n, c) in enums_found.items() if c >= enum_max_members[n]}
+    enums_encountered = set()  # type: Set[str]
+    simplified_set = []  # type: List[ProperType]
+    for i, item in enumerate(items):
+        if i in removed:
+            continue
+
+        # Try seeing if this is an enum or enum literal, and if it's
+        # one we should be collapsing away.
+        if isinstance(item, LiteralType):
+            instance = item.fallback  # type: Optional[Instance]
+        elif isinstance(item, Instance):
+            instance = item
+        else:
+            instance = None
+
+        if instance and instance.type.is_enum:
+            enum_name = instance.type.fullname()
+            if enum_name in enums_encountered:
+                continue
+            if enum_name in enums_to_compress:
+                simplified_set.append(instance)
+                enums_encountered.add(enum_name)
+                continue
+        simplified_set.append(item)
 
-    simplified_set = [items[i] for i in range(len(items)) if i not in removed]
     return UnionType.make_union(simplified_set, line, column)
 
 
@@ -551,7 +597,7 @@ class Status(Enum):
 
     if isinstance(typ, UnionType):
         items = [try_expanding_enum_to_union(item, target_fullname) for item in typ.items]
-        return make_simplified_union(items)
+        return UnionType.make_union(items)
     elif isinstance(typ, Instance) and typ.type.is_enum and typ.type.fullname() == target_fullname:
         new_items = []
         for name, symbol in typ.type.names.items():
@@ -566,7 +612,7 @@ class Status(Enum):
         # only using CPython, but we might as well for the sake of full correctness.
         if sys.version_info < (3, 7):
             new_items.sort(key=lambda lit: lit.value)
-        return make_simplified_union(new_items)
+        return UnionType.make_union(new_items)
     else:
         return typ
 
@@ -578,7 +624,7 @@ def coerce_to_literal(typ: Type) -> ProperType:
     typ = get_proper_type(typ)
     if isinstance(typ, UnionType):
         new_items = [coerce_to_literal(item) for item in typ.items]
-        return make_simplified_union(new_items)
+        return UnionType.make_union(new_items)
     elif isinstance(typ, Instance):
         if typ.last_known_value:
             return typ.last_known_value
diff --git a/test-data/unit/check-enum.test b/test-data/unit/check-enum.test
index 43355392098c..3ae8f59bf72c 100644
--- a/test-data/unit/check-enum.test
+++ b/test-data/unit/check-enum.test
@@ -629,6 +629,7 @@ elif x is Foo.C:
     reveal_type(x)  # N: Revealed type is 'Literal[__main__.Foo.C]'
 else:
     reveal_type(x)  # No output here: this branch is unreachable
+reveal_type(x)      # N: Revealed type is '__main__.Foo'
 
 if Foo.A is x:
     reveal_type(x)  # N: Revealed type is 'Literal[__main__.Foo.A]'
@@ -638,6 +639,7 @@ elif Foo.C is x:
     reveal_type(x)  # N: Revealed type is 'Literal[__main__.Foo.C]'
 else:
     reveal_type(x)  # No output here: this branch is unreachable
+reveal_type(x)      # N: Revealed type is '__main__.Foo'
 
 y: Foo
 if y is Foo.A:
@@ -648,6 +650,7 @@ elif y is Foo.C:
     reveal_type(y)  # N: Revealed type is 'Literal[__main__.Foo.C]'
 else:
     reveal_type(y)  # No output here: this branch is unreachable
+reveal_type(y)      # N: Revealed type is '__main__.Foo'
 
 if Foo.A is y:
     reveal_type(y)  # N: Revealed type is 'Literal[__main__.Foo.A]'
@@ -657,6 +660,7 @@ elif Foo.C is y:
     reveal_type(y)  # N: Revealed type is 'Literal[__main__.Foo.C]'
 else:
     reveal_type(y)  # No output here: this branch is unreachable
+reveal_type(y)      # N: Revealed type is '__main__.Foo'
 [builtins fixtures/bool.pyi]
 
 [case testEnumReachabilityChecksIndirect]
@@ -686,6 +690,8 @@ if y is x:
 else:
     reveal_type(x)  # N: Revealed type is 'Union[Literal[__main__.Foo.B], Literal[__main__.Foo.C]]'
     reveal_type(y)  # N: Revealed type is 'Literal[__main__.Foo.A]'
+reveal_type(x)      # N: Revealed type is '__main__.Foo'
+reveal_type(y)      # N: Revealed type is 'Literal[__main__.Foo.A]'
 
 if x is z:
     reveal_type(x)  # N: Revealed type is 'Literal[__main__.Foo.A]'
@@ -703,6 +709,8 @@ else:
     reveal_type(x)  # N: Revealed type is 'Union[Literal[__main__.Foo.B], Literal[__main__.Foo.C]]'
     reveal_type(z)  # N: Revealed type is '__main__.Foo*'
     accepts_foo_a(z)
+reveal_type(x)      # N: Revealed type is '__main__.Foo'
+reveal_type(z)      # N: Revealed type is '__main__.Foo*'
 
 if y is z:
     reveal_type(y)  # N: Revealed type is 'Literal[__main__.Foo.A]'
@@ -718,6 +726,8 @@ if z is y:
 else:
     reveal_type(y)  # No output: this branch is unreachable
     reveal_type(z)  # No output: this branch is unreachable
+reveal_type(y)      # N: Revealed type is 'Literal[__main__.Foo.A]'
+reveal_type(z)      # N: Revealed type is '__main__.Foo*'
 [builtins fixtures/bool.pyi]
 
 [case testEnumReachabilityNoNarrowingForUnionMessiness]
@@ -740,6 +750,8 @@ if x is y:
 else:
     reveal_type(x)  # N: Revealed type is '__main__.Foo'
     reveal_type(y)  # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Foo.B]]'
+reveal_type(x)      # N: Revealed type is '__main__.Foo'
+reveal_type(y)      # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Foo.B]]'
 
 if y is z:
     reveal_type(y)  # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Foo.B]]'
@@ -747,6 +759,8 @@ if y is z:
 else:
     reveal_type(y)  # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Foo.B]]'
     reveal_type(z)  # N: Revealed type is 'Union[Literal[__main__.Foo.B], Literal[__main__.Foo.C]]'
+reveal_type(y)      # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Foo.B]]'
+reveal_type(z)      # N: Revealed type is 'Union[Literal[__main__.Foo.B], Literal[__main__.Foo.C]]'
 [builtins fixtures/bool.pyi]
 
 [case testEnumReachabilityWithNone]
@@ -764,16 +778,19 @@ if x:
     reveal_type(x)  # N: Revealed type is '__main__.Foo'
 else:
     reveal_type(x)  # N: Revealed type is 'Union[__main__.Foo, None]'
+reveal_type(x)      # N: Revealed type is 'Union[__main__.Foo, None]'
 
 if x is not None:
     reveal_type(x)  # N: Revealed type is '__main__.Foo'
 else:
     reveal_type(x)  # N: Revealed type is 'None'
+reveal_type(x)      # N: Revealed type is 'Union[__main__.Foo, None]'
 
 if x is Foo.A:
     reveal_type(x)  # N: Revealed type is 'Literal[__main__.Foo.A]'
 else:
     reveal_type(x)  # N: Revealed type is 'Union[Literal[__main__.Foo.B], Literal[__main__.Foo.C], None]'
+reveal_type(x)      # N: Revealed type is 'Union[__main__.Foo, None]'
 [builtins fixtures/bool.pyi]
 
 [case testEnumReachabilityWithMultipleEnums]
@@ -793,18 +810,21 @@ if x1 is Foo.A:
     reveal_type(x1)  # N: Revealed type is 'Literal[__main__.Foo.A]'
 else:
     reveal_type(x1)  # N: Revealed type is 'Union[Literal[__main__.Foo.B], __main__.Bar]'
+reveal_type(x1)      # N: Revealed type is 'Union[__main__.Foo, __main__.Bar]'
 
 x2: Union[Foo, Bar]
 if x2 is Bar.A:
     reveal_type(x2)  # N: Revealed type is 'Literal[__main__.Bar.A]'
 else:
     reveal_type(x2)  # N: Revealed type is 'Union[__main__.Foo, Literal[__main__.Bar.B]]'
+reveal_type(x2)      # N: Revealed type is 'Union[__main__.Foo, __main__.Bar]'
 
 x3: Union[Foo, Bar]
 if x3 is Foo.A or x3 is Bar.A:
     reveal_type(x3)  # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Bar.A]]'
 else:
     reveal_type(x3)  # N: Revealed type is 'Union[Literal[__main__.Foo.B], Literal[__main__.Bar.B]]'
+reveal_type(x3)      # N: Revealed type is 'Union[__main__.Foo, __main__.Bar]'
 
 [builtins fixtures/bool.pyi]
 
@@ -823,7 +843,7 @@ def func(x: Union[int, None, Empty] = _empty) -> int:
                         # E: Unsupported left operand type for + ("Empty") \
                         # N: Left operand is of type "Union[int, None, Empty]"
     if x is _empty:
-        reveal_type(x)  # N: Revealed type is 'Literal[__main__.Empty.token]'
+        reveal_type(x)  # N: Revealed type is '__main__.Empty'
         return 0
     elif x is None:
         reveal_type(x)  # N: Revealed type is 'None'
@@ -870,7 +890,7 @@ def func(x: Union[int, None, Empty] = _empty) -> int:
                         # E: Unsupported left operand type for + ("Empty") \
                         # N: Left operand is of type "Union[int, None, Empty]"
     if x is _empty:
-        reveal_type(x)  # N: Revealed type is 'Literal[__main__.Empty.token]'
+        reveal_type(x)  # N: Revealed type is '__main__.Empty'
         return 0
     elif x is None:
         reveal_type(x)  # N: Revealed type is 'None'
@@ -899,7 +919,7 @@ def func(x: Union[int, None, Empty] = _empty) -> int:
                         # E: Unsupported left operand type for + ("Empty") \
                         # N: Left operand is of type "Union[int, None, Empty]"
     if x is _empty:
-        reveal_type(x)  # N: Revealed type is 'Literal[__main__.Empty.token]'
+        reveal_type(x)  # N: Revealed type is '__main__.Empty'
         return 0
     elif x is None:
         reveal_type(x)  # N: Revealed type is 'None'
@@ -908,3 +928,77 @@ def func(x: Union[int, None, Empty] = _empty) -> int:
         reveal_type(x)  # N: Revealed type is 'builtins.int'
         return x + 2
 [builtins fixtures/primitives.pyi]
+
+[case testEnumUnionCompression]
+from typing import Union
+from typing_extensions import Literal
+from enum import Enum
+
+class Foo(Enum):
+    A = 1
+    B = 2
+    C = 3
+
+class Bar(Enum):
+    X = 1
+    Y = 2
+
+x1: Literal[Foo.A, Foo.B, Foo.B, Foo.B, 1, None]
+assert x1 is not None
+reveal_type(x1)  # N: Revealed type is 'Union[Literal[__main__.Foo.A], Literal[__main__.Foo.B], Literal[1]]'
+
+x2: Literal[1, Foo.A, Foo.B, Foo.C, None]
+assert x2 is not None
+reveal_type(x2)  # N: Revealed type is 'Union[Literal[1], __main__.Foo]'
+
+x3: Literal[Foo.A, Foo.B, 1, Foo.C, Foo.C, Foo.C, None]
+assert x3 is not None
+reveal_type(x3)  # N: Revealed type is 'Union[__main__.Foo, Literal[1]]'
+
+x4: Literal[Foo.A, Foo.B, Foo.C, Foo.C, Foo.C, None]
+assert x4 is not None
+reveal_type(x4)  # N: Revealed type is '__main__.Foo'
+
+x5: Union[Literal[Foo.A], Foo, None]
+assert x5 is not None
+reveal_type(x5)  # N: Revealed type is '__main__.Foo'
+
+x6: Literal[Foo.A, Bar.X, Foo.B, Bar.Y, Foo.C, None]
+assert x6 is not None
+reveal_type(x6)  # N: Revealed type is 'Union[__main__.Foo, __main__.Bar]'
+
+# TODO: We should really simplify this down into just 'Bar' as well.
+no_forcing: Literal[Bar.X, Bar.X, Bar.Y]
+reveal_type(no_forcing)  # N: Revealed type is 'Union[Literal[__main__.Bar.X], Literal[__main__.Bar.X], Literal[__main__.Bar.Y]]'
+
+[case testEnumUnionCompressionAssignment]
+from typing_extensions import Literal
+from enum import Enum
+
+class Foo(Enum):
+    A = 1
+    B = 2
+
+class Wrapper1:
+    def __init__(self, x: object, y: Foo) -> None:
+        if x:
+            if y is Foo.A:
+                pass
+            else:
+                pass
+            self.y = y
+        else:
+            self.y = y
+        reveal_type(self.y)  # N: Revealed type is '__main__.Foo'
+
+class Wrapper2:
+    def __init__(self, x: object, y: Foo) -> None:
+        if x:
+            self.y = y
+        else:
+            if y is Foo.A:
+                pass
+            else:
+                pass
+            self.y = y
+        reveal_type(self.y)  # N: Revealed type is '__main__.Foo'