diff --git a/mypy/constraints.py b/mypy/constraints.py
index aa4ce24b65df..89b8e4527e24 100644
--- a/mypy/constraints.py
+++ b/mypy/constraints.py
@@ -486,12 +486,11 @@ def infer_against_overloaded(self, overloaded: Overloaded,
                                  template: CallableType) -> List[Constraint]:
         # Create constraints by matching an overloaded type against a template.
         # This is tricky to do in general. We cheat by only matching against
-        # the first overload item, and by only matching the return type. This
+        # the first overload item that is callable compatible. This
         # seems to work somewhat well, but we should really use a more
         # reliable technique.
         item = find_matching_overload_item(overloaded, template)
-        return infer_constraints(template.ret_type, item.ret_type,
-                                 self.direction)
+        return infer_constraints(template, item, self.direction)
 
     def visit_tuple_type(self, template: TupleType) -> List[Constraint]:
         actual = self.actual
diff --git a/test-data/unit/check-overloading.test b/test-data/unit/check-overloading.test
index dc9a94b4a28f..4b3fbfdda851 100644
--- a/test-data/unit/check-overloading.test
+++ b/test-data/unit/check-overloading.test
@@ -5099,3 +5099,28 @@ def foo(x: MyInt) -> int: ...
 def foo(x):
     ...
 [builtins fixtures/tuple.pyi]
+
+[case testOverloadedToGeneric]
+from typing import TypeVar, Callable, NewType, overload, Union
+
+# int in our stubs isn't overloaded
+class fakeint:
+    @overload
+    def __init__(self, x: Union[str, bytes] = ...) -> None: ...
+    @overload
+    def __init__(self, x: Union[str, bytes], base: int) -> None: ...
+    def __init__(self, *args) -> None: pass  # type: ignore
+
+
+U = TypeVar('U')
+V = TypeVar('V')
+W = TypeVar('W')
+def compose(f: Callable[[U], V], g: Callable[[W], U]) -> Callable[[W], V]:
+    return lambda x: f(g(x))
+
+ID = NewType("ID", fakeint)
+
+compose(ID, fakeint)("test")
+reveal_type(compose(ID, fakeint))  # N: Revealed type is 'def (Union[builtins.str, builtins.bytes]) -> __main__.ID*'
+
+[builtins fixtures/tuple.pyi]