diff --git a/src/cmd/compile/internal/types2/subst.go b/src/cmd/compile/internal/types2/subst.go
index 09dc58527a11f1..1ad73c41ce1f08 100644
--- a/src/cmd/compile/internal/types2/subst.go
+++ b/src/cmd/compile/internal/types2/subst.go
@@ -95,6 +95,18 @@ func (subst *subster) typ(typ Type) Type {
 	case *Basic:
 		// nothing to do
 
+	case *Alias:
+		rhs := subst.typ(t.fromRHS)
+		if rhs != t.fromRHS {
+			// This branch cannot be reached because the RHS of an alias
+			// may only contain type parameters of an enclosing function.
+			// Such function bodies are never "instantiated" and thus
+			// substitution is not called on locally declared alias types.
+			// TODO(gri) adjust once parameterized aliases are supported
+			panic("unreachable for unparameterized aliases")
+			// return subst.check.newAlias(t.obj, rhs)
+		}
+
 	case *Array:
 		elem := subst.typOrNil(t.elem)
 		if elem != t.elem {
diff --git a/src/go/types/subst.go b/src/go/types/subst.go
index 1934ebab2b1a4f..178f7172835894 100644
--- a/src/go/types/subst.go
+++ b/src/go/types/subst.go
@@ -97,6 +97,18 @@ func (subst *subster) typ(typ Type) Type {
 	case *Basic:
 		// nothing to do
 
+	case *Alias:
+		rhs := subst.typ(t.fromRHS)
+		if rhs != t.fromRHS {
+			// This branch cannot be reached because the RHS of an alias
+			// may only contain type parameters of an enclosing function.
+			// Such function bodies are never "instantiated" and thus
+			// substitution is not called on locally declared alias types.
+			// TODO(gri) adjust once parameterized aliases are supported
+			panic("unreachable for unparameterized aliases")
+			// return subst.check.newAlias(t.obj, rhs)
+		}
+
 	case *Array:
 		elem := subst.typOrNil(t.elem)
 		if elem != t.elem {
diff --git a/src/internal/types/testdata/fixedbugs/issue65854.go b/src/internal/types/testdata/fixedbugs/issue65854.go
new file mode 100644
index 00000000000000..744777a94f8457
--- /dev/null
+++ b/src/internal/types/testdata/fixedbugs/issue65854.go
@@ -0,0 +1,13 @@
+// -gotypesalias=1
+
+// Copyright 2024 The Go Authors. All rights reserved.
+// Use of this source code is governed by a BSD-style
+// license that can be found in the LICENSE file.
+
+package p
+
+type A = int
+
+type T[P any] *A
+
+var _ T[int]