diff --git a/compiler/src/dotty/tools/dotc/core/Definitions.scala b/compiler/src/dotty/tools/dotc/core/Definitions.scala
index 30f89c5c44d1..c215f382bcbe 100644
--- a/compiler/src/dotty/tools/dotc/core/Definitions.scala
+++ b/compiler/src/dotty/tools/dotc/core/Definitions.scala
@@ -1121,15 +1121,19 @@ class Definitions {
   /** Is `tp` (an alias) of either a scala.FunctionN or a scala.ImplicitFunctionN
    *  instance?
    */
-  def isNonDepFunctionType(tp: Type)(implicit ctx: Context): Boolean = {
+  def isNonRefinedFunction(tp: Type)(implicit ctx: Context): Boolean = {
     val arity = functionArity(tp)
     val sym = tp.dealias.typeSymbol
-    arity >= 0 && isFunctionClass(sym) && tp.isRef(FunctionType(arity, sym.name.isImplicitFunction, sym.name.isErasedFunction).typeSymbol)
+
+    arity >= 0 &&
+      isFunctionClass(sym) &&
+      tp.isRef(FunctionType(arity, sym.name.isImplicitFunction, sym.name.isErasedFunction).typeSymbol) &&
+      !tp.isInstanceOf[RefinedType]
   }
 
   /** Is `tp` a representation of a (possibly depenent) function type or an alias of such? */
   def isFunctionType(tp: Type)(implicit ctx: Context): Boolean =
-    isNonDepFunctionType(tp.dropDependentRefinement)
+    isNonRefinedFunction(tp.dropDependentRefinement)
 
   // Specialized type parameters defined for scala.Function{0,1,2}.
   lazy val Function1SpecializedParamTypes: collection.Set[TypeRef] =
@@ -1169,7 +1173,7 @@ class Definitions {
         false
     })
 
-  def functionArity(tp: Type)(implicit ctx: Context): Int = tp.dealias.argInfos.length - 1
+  def functionArity(tp: Type)(implicit ctx: Context): Int = tp.dropDependentRefinement.dealias.argInfos.length - 1
 
   /** Return underlying immplicit function type (i.e. instance of an ImplicitFunctionN class)
    *  or NoType if none exists. The following types are considered as underlying types:
diff --git a/compiler/src/dotty/tools/dotc/typer/Typer.scala b/compiler/src/dotty/tools/dotc/typer/Typer.scala
index 4fbeb406351d..6c371b629321 100644
--- a/compiler/src/dotty/tools/dotc/typer/Typer.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Typer.scala
@@ -756,7 +756,7 @@ class Typer extends Namer
       case _ => untpd.TypeTree(tp)
     }
     pt.stripTypeVar.dealias.followSyntheticOpaque match {
-      case pt1 if defn.isNonDepFunctionType(pt1) =>
+      case pt1 if defn.isNonRefinedFunction(pt1) =>
         // if expected parameter type(s) are wildcards, approximate from below.
         // if expected result type is a wildcard, approximate from above.
         // this can type the greatest set of admissible closures.
@@ -2528,7 +2528,7 @@ class Typer extends Namer
               ctx.warning(ex"${tree.symbol} is eta-expanded even though $pt does not have the @FunctionalInterface annotation.", tree.sourcePos)
             case _ =>
           }
-        simplify(typed(etaExpand(tree, wtp, arity), pt), pt, locked)
+          simplify(typed(etaExpand(tree, wtp, arity), pt), pt, locked)
       } else if (wtp.paramInfos.isEmpty && isAutoApplied(tree.symbol))
         readaptSimplified(tpd.Apply(tree, Nil))
       else if (wtp.isImplicitMethod)
diff --git a/tests/pos/i5794.scala b/tests/pos/i5794.scala
new file mode 100644
index 000000000000..24862c92b324
--- /dev/null
+++ b/tests/pos/i5794.scala
@@ -0,0 +1,5 @@
+object Test {
+  trait Entry { type Key; val key: Key }
+  def extractKey(e: Entry): e.Key = e.key
+  val extractor: (e: Entry) => e.Key = extractKey
+}