diff --git a/ets2panda/checker/ets/typeCheckingHelpers.cpp b/ets2panda/checker/ets/typeCheckingHelpers.cpp
index f4048ebd6fee8ee42d1095630f6b38831b14d672..84fbf811859576d20f61125f0b2e1b9bf1700192 100644
--- a/ets2panda/checker/ets/typeCheckingHelpers.cpp
+++ b/ets2panda/checker/ets/typeCheckingHelpers.cpp
@@ -805,6 +805,12 @@ bool ETSChecker::IsAllowedTypeAliasRecursion(const ir::TSTypeAliasDeclaration *t
         return true;
     };
 
+    if (typeAliasNode->TypeAnnotation()->IsETSFunctionType() &&
+        typeAliasNode->TypeAnnotation()->AsETSFunctionType()->ReturnType()->IsETSTypeReference()) {
+        isAllowedRerursiveType &= typeAliasDeclarationCheck(
+            typeAliasNode->TypeAnnotation()->AsETSFunctionType()->ReturnType()->AsETSTypeReference()->Part());
+    }
+
     if (typeAliasNode->TypeAnnotation()->IsETSTypeReference()) {
         isAllowedRerursiveType &=
             typeAliasDeclarationCheck(typeAliasNode->TypeAnnotation()->AsETSTypeReference()->Part());
diff --git a/ets2panda/test/ast/compiler/ets/type-alias-recursion.ets b/ets2panda/test/ast/compiler/ets/type-alias-recursion.ets
new file mode 100644
index 0000000000000000000000000000000000000000..5199a8d86f8bd56f501eca01f21e13507370712d
--- /dev/null
+++ b/ets2panda/test/ast/compiler/ets/type-alias-recursion.ets
@@ -0,0 +1,24 @@
+/*
+ * Copyright (c) 2025 Huawei Device Co., Ltd.
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+type foo = () => bar;
+type bar = () => foo;
+
+function baz() : bar {
+  return baz;
+}
+
+/* @@? 17:1 Error TypeError: Circular type alias reference */
+/* @@? 20:10 Error TypeError: Type '() => () => () => *ERROR_TYPE*' is not compatible with the enclosing method's return type '() => () => *ERROR_TYPE*' */
diff --git a/ets2panda/test/ast/compiler/ets/typealias_as_value.ets b/ets2panda/test/ast/compiler/ets/typealias_as_value.ets
index e6f3bb13a735fddfbc53d9b1ef91d04416d4b067..ee3c8bcf858cb5350db7f748d5a22b7ad198ea9a 100644
--- a/ets2panda/test/ast/compiler/ets/typealias_as_value.ets
+++ b/ets2panda/test/ast/compiler/ets/typealias_as_value.ets
@@ -13,7 +13,7 @@
  * limitations under the License.
  */
 
-type RF = (p:RF) => RF
+type RF = (p:string) => number
 
 function main(){
     let v1 = () => {return RF}