diff --git a/flang/include/flang/Semantics/type.h b/flang/include/flang/Semantics/type.h
index 6840f5b035170..eb506d1661e91 100644
--- a/flang/include/flang/Semantics/type.h
+++ b/flang/include/flang/Semantics/type.h
@@ -279,10 +279,9 @@ class DerivedTypeSpec {
       return nullptr;
     }
   }
+  bool MightBeAssignmentCompatibleWith(const DerivedTypeSpec &) const;
   bool operator==(const DerivedTypeSpec &that) const {
-    return &typeSymbol_ == &that.typeSymbol_ && cooked_ == that.cooked_ &&
-        parameters_ == that.parameters_ &&
-        rawParameters_ == that.rawParameters_;
+    return RawEquals(that) && parameters_ == that.parameters_;
   }
   std::string AsFortran() const;
 
@@ -295,6 +294,10 @@ class DerivedTypeSpec {
   bool instantiated_{false};
   RawParameters rawParameters_;
   ParameterMapType parameters_;
+  bool RawEquals(const DerivedTypeSpec &that) const {
+    return &typeSymbol_ == &that.typeSymbol_ && cooked_ == that.cooked_ &&
+        rawParameters_ == that.rawParameters_;
+  }
   friend llvm::raw_ostream &operator<<(
       llvm::raw_ostream &, const DerivedTypeSpec &);
 };
diff --git a/flang/lib/Semantics/tools.cpp b/flang/lib/Semantics/tools.cpp
index 68db3e186a99c..a633ecbe1898d 100644
--- a/flang/lib/Semantics/tools.cpp
+++ b/flang/lib/Semantics/tools.cpp
@@ -84,6 +84,18 @@ const Scope *FindPureProcedureContaining(const Scope &start) {
   return IsPureProcedure(scope) ? &scope : nullptr;
 }
 
+static bool MightHaveCompatibleDerivedtypes(
+    const std::optional<evaluate::DynamicType> &lhsType,
+    const std::optional<evaluate::DynamicType> &rhsType) {
+  const DerivedTypeSpec *lhsDerived{evaluate::GetDerivedTypeSpec(lhsType)};
+  const DerivedTypeSpec *rhsDerived{evaluate::GetDerivedTypeSpec(rhsType)};
+  if (!lhsDerived || !rhsDerived) {
+    return false;
+  }
+  return *lhsDerived == *rhsDerived ||
+      lhsDerived->MightBeAssignmentCompatibleWith(*rhsDerived);
+}
+
 Tristate IsDefinedAssignment(
     const std::optional<evaluate::DynamicType> &lhsType, int lhsRank,
     const std::optional<evaluate::DynamicType> &rhsType, int rhsRank) {
@@ -97,15 +109,10 @@ Tristate IsDefinedAssignment(
   } else if (lhsCat != TypeCategory::Derived) {
     return ToTristate(lhsCat != rhsCat &&
         (!IsNumericTypeCategory(lhsCat) || !IsNumericTypeCategory(rhsCat)));
+  } else if (MightHaveCompatibleDerivedtypes(lhsType, rhsType)) {
+    return Tristate::Maybe; // TYPE(t) = TYPE(t) can be defined or intrinsic
   } else {
-    const auto *lhsDerived{evaluate::GetDerivedTypeSpec(lhsType)};
-    const auto *rhsDerived{evaluate::GetDerivedTypeSpec(rhsType)};
-    if (lhsDerived && rhsDerived && *lhsDerived == *rhsDerived) {
-      return Tristate::Maybe; // TYPE(t) = TYPE(t) can be defined or
-                              // intrinsic
-    } else {
-      return Tristate::Yes;
-    }
+    return Tristate::Yes;
   }
 }
 
diff --git a/flang/lib/Semantics/type.cpp b/flang/lib/Semantics/type.cpp
index 99c48b36d3376..16625c04bcc6f 100644
--- a/flang/lib/Semantics/type.cpp
+++ b/flang/lib/Semantics/type.cpp
@@ -189,6 +189,36 @@ ParamValue *DerivedTypeSpec::FindParameter(SourceName target) {
       const_cast<const DerivedTypeSpec *>(this)->FindParameter(target));
 }
 
+// Objects of derived types might be assignment compatible if they are equal
+// with respect to everything other than their instantiated type parameters
+// and their constant instantiated type parameters have the same values.
+bool DerivedTypeSpec::MightBeAssignmentCompatibleWith(
+    const DerivedTypeSpec &that) const {
+  if (!RawEquals(that)) {
+    return false;
+  }
+  const std::map<SourceName, ParamValue> &theseParams{this->parameters()};
+  const std::map<SourceName, ParamValue> &thoseParams{that.parameters()};
+  auto thatIter{thoseParams.begin()};
+  for (const auto &[thisName, thisValue] : theseParams) {
+    CHECK(thatIter != thoseParams.end());
+    const ParamValue &thatValue{thatIter->second};
+    if (MaybeIntExpr thisExpr{thisValue.GetExplicit()}) {
+      if (evaluate::IsConstantExpr(*thisExpr)) {
+        if (MaybeIntExpr thatExpr{thatValue.GetExplicit()}) {
+          if (evaluate::IsConstantExpr(*thatExpr)) {
+            if (evaluate::ToInt64(*thisExpr) != evaluate::ToInt64(*thatExpr)) {
+              return false;
+            }
+          }
+        }
+      }
+    }
+    thatIter++;
+  }
+  return true;
+}
+
 class InstantiateHelper {
 public:
   InstantiateHelper(Scope &scope) : scope_{scope} {}
diff --git a/flang/test/Semantics/assign04.f90 b/flang/test/Semantics/assign04.f90
index 8887b4d2dc37c..806256f9b9bcf 100644
--- a/flang/test/Semantics/assign04.f90
+++ b/flang/test/Semantics/assign04.f90
@@ -141,3 +141,34 @@ subroutine s11
   !ERROR: Subroutine name is not allowed here
   a = s11
 end
+
+subroutine s12()
+  type dType(l1, k1, l2, k2)
+    integer, len :: l1
+    integer, kind :: k1
+    integer, len :: l2
+    integer, kind :: k2
+  end type
+
+  contains
+    subroutine sub(arg1, arg2, arg3)
+      integer :: arg1
+      type(dType(arg1, 2, *, 4)) :: arg2
+      type(dType(*, 2, arg1, 4)) :: arg3
+      type(dType(1, 2, 3, 4)) :: local1
+      type(dType(1, 2, 3, 4)) :: local2
+      type(dType(1, 2, arg1, 4)) :: local3
+      type(dType(9, 2, 3, 4)) :: local4
+      type(dType(1, 9, 3, 4)) :: local5
+
+      arg2 = arg3
+      arg2 = local1
+      arg3 = local1
+      local1 = local2
+      local2 = local3
+      !ERROR: No intrinsic or user-defined ASSIGNMENT(=) matches operand types TYPE(dtype(k1=2_4,k2=4_4,l1=1_4,l2=3_4)) and TYPE(dtype(k1=2_4,k2=4_4,l1=9_4,l2=3_4))
+      local1 = local4 ! mismatched constant KIND type parameter
+      !ERROR: No intrinsic or user-defined ASSIGNMENT(=) matches operand types TYPE(dtype(k1=2_4,k2=4_4,l1=1_4,l2=3_4)) and TYPE(dtype(k1=9_4,k2=4_4,l1=1_4,l2=3_4))
+      local1 = local5 ! mismatched constant LEN type parameter
+    end subroutine sub
+end subroutine s12