diff --git a/compiler/src/dotty/tools/dotc/ast/tpd.scala b/compiler/src/dotty/tools/dotc/ast/tpd.scala
index 13d70408d7db..0296ca8c11bf 100644
--- a/compiler/src/dotty/tools/dotc/ast/tpd.scala
+++ b/compiler/src/dotty/tools/dotc/ast/tpd.scala
@@ -1028,7 +1028,9 @@ object tpd extends Trees.Instance[Type] with TypedTreeInfo {
 
     /** The current tree applied to given type argument list: `tree[targs(0), ..., targs(targs.length - 1)]` */
     def appliedToTypeTrees(targs: List[Tree])(using Context): Tree =
-      if targs.isEmpty then tree else TypeApply(tree, targs)
+      if targs.isEmpty then tree else tree match
+        case Block(stmts, expr) if stmts.nonEmpty => Block(stmts, TypeApply(expr, targs))
+        case _ => TypeApply(tree, targs)
 
     /** Apply to `()` unless tree's widened type is parameterless */
     def ensureApplied(using Context): Tree =
diff --git a/tests/pos/26238-min.scala b/tests/pos/26238-min.scala
new file mode 100644
index 000000000000..65c65d1d9eb5
--- /dev/null
+++ b/tests/pos/26238-min.scala
@@ -0,0 +1,20 @@
+trait Thing[T]
+trait G
+
+object Outer:
+
+  def thing: Thing[Int] = ???
+
+  extension[T1](t: Thing[T1])(using g: G = new G { })
+    def map[T2](m: T1 => T2): Thing[T2] = ???
+    def flatMap[T2](m: T1 => Thing[T2]): Thing[T2] = ???
+
+  // `y` requires a `flatMap`, and that one requires getting the default value for the `g` argument,
+  // and getting that default value requires the `t` argument (since default values can depend on previous args),
+  // which means we end up with a block;
+  // and since the whole thing is generic, we must apply a generic type argument to that block
+  for
+    x <- thing
+    y <- thing
+  yield
+    1
diff --git a/tests/pos/26238.scala b/tests/pos/26238.scala
new file mode 100644
index 000000000000..136c27b3cbb7
--- /dev/null
+++ b/tests/pos/26238.scala
@@ -0,0 +1,65 @@
+object toplevel {
+
+@deprecated("pls work this out")
+def ??? = scala.Predef.`???`
+
+import util.ChainingOps.{*, given}
+
+object S {
+
+trait AllocatedNodeTypeFamily:
+  type Node
+
+trait Parser[+A] private[S] () :
+  type SpcNd
+
+type OutliningParser[+A, +Node]
+= Parser[A] { type SpcNd <: Node }
+
+extension [R1] (g1: Parser[R1] )
+              (using pfmoIspcndi: ParserFlatMapOp.ISpcNdInvariant = new ParserFlatMapOp.ISpcNdInvariant {}.asInstanceOf[ParserFlatMapOp.ISpcNdInvariant { type SpcNdObj = g1.SpcNd } ] )
+
+            def     map[R2] (m: R1 => (       R2  ) ): OutliningParser[R2, g1.SpcNd] = new Parser[Any] {}.asInstanceOf
+            def flatMap[R2] (m: R1 => (Parser[R2] ) ): OutliningParser[R2, g1.SpcNd] = new Parser[Any] {}.asInstanceOf
+
+object ParserFlatMapOp {
+
+  given given_ISpcNdInvariant_PModAllocatedNodeTypeFamily
+  : (x: AllocatedNodeTypeFamily ) => (ISpcNdInvariant { type SpcNdObj = x.Node })
+  = new ISpcNdInvariant {}.asInstanceOf
+
+  trait ISpcNdInvariant :
+    type SpcNdObj
+
+} // ParserFlatMapOp.
+
+def defaultIntParser
+  : Parser[Int]
+= new Parser[Any] {}.asInstanceOf
+
+} // S.
+
+System.err.println(Math.random() )
+
+System.err.println(Math.random() )
+
+locally :
+  System.err.println(Math.random() )
+
+  // given S.ParserFlatMapOp.ISpcNdInvariant
+  // = (new S.ParserFlatMapOp.ISpcNdInvariant {}).asInstanceOf
+
+  /* run locally you might see something like say "unexpected tree for type application" or the like.. 😒 */
+  /* commented out, the whole code would compile and run like it should.. */
+  locally :
+    for
+      r1 <- S.defaultIntParser
+      r2 <- S.defaultIntParser
+    yield { 5 }
+  .toString()
+
+System.err.println(s"done.")
+
+System.err.println(Math.random() )
+
+}