diff --git a/mypy/meet.py b/mypy/meet.py
index 63305c2bb236..1cb291ff90d5 100644
--- a/mypy/meet.py
+++ b/mypy/meet.py
@@ -346,7 +346,7 @@ def is_overlapping_types(
         seen_types = set()
     elif (left, right) in seen_types:
         return True
-    if isinstance(left, TypeAliasType) and isinstance(right, TypeAliasType):
+    if is_recursive_pair(left, right):
         seen_types.add((left, right))
 
     left, right = get_proper_types((left, right))
diff --git a/test-data/unit/check-recursive-types.test b/test-data/unit/check-recursive-types.test
index c82111322fe1..c09f1e6b90c0 100644
--- a/test-data/unit/check-recursive-types.test
+++ b/test-data/unit/check-recursive-types.test
@@ -1024,3 +1024,19 @@ L = list[T]
 
 A = L[A]
 a: A = 1  # E: Incompatible types in assignment (expression has type "int", variable has type "A")
+
+[case testRecursiveAliasInstanceOverlapCheck]
+# flags: --warn-unreachable
+from typing_extensions import TypeAlias
+
+OneClass: TypeAlias = 'list[OneClass]'
+
+class TwoClass(list['TwoClass']):
+    pass
+
+def f(obj: OneClass) -> None:
+    if isinstance(obj, TwoClass):
+        reveal_type(obj)  # N: Revealed type is "__main__.TwoClass"
+    else:
+        reveal_type(obj)  # N: Revealed type is "builtins.list[...]"
+[builtins fixtures/isinstancelist.pyi]