diff --git a/base-test/org.eclipse.jdt.groovy.core.tests.compiler/src/org/eclipse/jdt/groovy/core/tests/xform/TypeCheckedTests.java b/base-test/org.eclipse.jdt.groovy.core.tests.compiler/src/org/eclipse/jdt/groovy/core/tests/xform/TypeCheckedTests.java
index 4cdb2af58f..a55f115f29 100644
--- a/base-test/org.eclipse.jdt.groovy.core.tests.compiler/src/org/eclipse/jdt/groovy/core/tests/xform/TypeCheckedTests.java
+++ b/base-test/org.eclipse.jdt.groovy.core.tests.compiler/src/org/eclipse/jdt/groovy/core/tests/xform/TypeCheckedTests.java
@@ -776,4 +776,24 @@ public void testTypeChecked9903() {
             "that you either use an explicit class or @DelegatesTo.Target with a correct id\n" +
             "----------\n");
     }
+
+    @Test
+    public void testTypeChecked9907() {
+        //@formatter:off
+        String[] sources = {
+            "Main.groovy",
+            "@groovy.transform.TypeChecked\n" +
+            "Integer foo(x) {\n" +
+            "  if (x instanceof Integer) {\n" +
+            "    def bar = { -> return x }\n" +
+            "    return bar.call()\n" +
+            "  }\n" +
+            "  return 0\n" +
+            "}\n" +
+            "println(foo(1))\n",
+        };
+        //@formatter:on
+
+        runConformTest(sources, "1");
+    }
 }
diff --git a/base/org.codehaus.groovy25/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java b/base/org.codehaus.groovy25/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
index 8a2769e103..4e0e11482b 100644
--- a/base/org.codehaus.groovy25/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
+++ b/base/org.codehaus.groovy25/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
@@ -322,9 +322,15 @@ public class StaticTypeCheckingVisitor extends ClassCodeVisitorSupport {
     protected final ReturnAdder.ReturnStatementListener returnListener = new ReturnAdder.ReturnStatementListener() {
         public void returnStatementAdded(final ReturnStatement returnStatement) {
             if (isNullConstant(returnStatement.getExpression())) return;
+            /* GRECLIPSE edit -- GROOVY-9907
             checkReturnType(returnStatement);
             if (typeCheckingContext.getEnclosingClosure() != null) {
                 addClosureReturnType(getType(returnStatement.getExpression()));
+			*/
+            ClassNode returnType = checkReturnType(returnStatement);
+            if (typeCheckingContext.getEnclosingClosure() != null) {
+                addClosureReturnType(returnType);
+            // GRECLIPSE end
             } else if (typeCheckingContext.getEnclosingMethod() != null) {
             } else {
                 throw new GroovyBugError("Unexpected return statement at "
@@ -692,7 +698,11 @@ public void visitVariableExpression(VariableExpression vexp) {
         */
 
         if (!(accessedVariable instanceof DynamicVariable)) {
+            /* GRECLIPSE edit -- GROOVY-9907
             if (typeCheckingContext.getEnclosingClosure() == null) {
+            */
+            {
+            // GRECLIPSE end
                 VariableExpression variable = null;
                 if (accessedVariable instanceof Parameter) {
                     variable = new ParameterVariableExpression((Parameter) accessedVariable);
@@ -2332,6 +2342,7 @@ private ClassNode infer(ClassNode target, ClassNode source) {
 
     protected ClassNode checkReturnType(final ReturnStatement statement) {
         Expression expression = statement.getExpression();
+        /* GRECLIPSE edit -- GROOVY-9907
         ClassNode type = getType(expression);
 
         if (typeCheckingContext.getEnclosingClosure() != null) {
@@ -2341,8 +2352,19 @@ protected ClassNode checkReturnType(final ReturnStatement statement) {
         if ((expression instanceof VariableExpression) && hasInferredReturnType(expression)) {
             type = expression.getNodeMetaData(StaticTypesMarker.INFERRED_RETURN_TYPE);
         }
+        */
+        ClassNode type;
+        if (expression instanceof VariableExpression && hasInferredReturnType(expression)) {
+            type = expression.getNodeMetaData(StaticTypesMarker.INFERRED_RETURN_TYPE);
+        } else {
+            type = getType(expression);
+        }
+        if (typeCheckingContext.getEnclosingClosure() != null) {
+            return type;
+        }
+        // GRECLIPSE end
         MethodNode enclosingMethod = typeCheckingContext.getEnclosingMethod();
-        if (enclosingMethod != null && typeCheckingContext.getEnclosingClosure() == null) {
+        if (enclosingMethod != null) {
             if (!enclosingMethod.isVoidMethod()
                     && !type.equals(void_WRAPPER_TYPE)
                     && !type.equals(VOID_TYPE)
diff --git a/base/org.codehaus.groovy30/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java b/base/org.codehaus.groovy30/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
index ab401d03eb..8fab7ad859 100644
--- a/base/org.codehaus.groovy30/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
+++ b/base/org.codehaus.groovy30/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
@@ -334,9 +334,15 @@ public class StaticTypeCheckingVisitor extends ClassCodeVisitorSupport {
         @Override
         public void returnStatementAdded(final ReturnStatement returnStatement) {
             if (isNullConstant(returnStatement.getExpression())) return;
+            /* GRECLIPSE edit -- GROOVY-9907
             checkReturnType(returnStatement);
             if (typeCheckingContext.getEnclosingClosure() != null) {
                 addClosureReturnType(getType(returnStatement.getExpression()));
+            */
+            ClassNode returnType = checkReturnType(returnStatement);
+            if (typeCheckingContext.getEnclosingClosure() != null) {
+                addClosureReturnType(returnType);
+            // GRECLIPSE end
             } else if (typeCheckingContext.getEnclosingMethod() == null) {
                 throw new GroovyBugError("Unexpected return statement at " + returnStatement.getLineNumber() + ":" + returnStatement.getColumnNumber() + " " + returnStatement.getText());
             }
@@ -630,7 +636,11 @@ public void visitVariableExpression(final VariableExpression vexp) {
                     }
                 }
             }
+        /* GRECLIPSE edit -- GROOVY-9907
         } else if (enclosingClosure == null) {
+        */
+        } else {
+        // GRECLIPSE end
             VariableExpression localVariable;
             if (accessedVariable instanceof Parameter) {
                 Parameter parameter = (Parameter) accessedVariable;
@@ -2161,6 +2171,7 @@ private ClassNode infer(final ClassNode target, final ClassNode source) {
 
     protected ClassNode checkReturnType(final ReturnStatement statement) {
         Expression expression = statement.getExpression();
+        /* GRECLIPSE edit -- GROOVY-9907
         ClassNode type = getType(expression);
 
         if (typeCheckingContext.getEnclosingClosure() != null) {
@@ -2170,8 +2181,19 @@ protected ClassNode checkReturnType(final ReturnStatement statement) {
         if ((expression instanceof VariableExpression) && hasInferredReturnType(expression)) {
             type = expression.getNodeMetaData(INFERRED_RETURN_TYPE);
         }
+        */
+        ClassNode type;
+        if (expression instanceof VariableExpression && hasInferredReturnType(expression)) {
+            type = expression.getNodeMetaData(StaticTypesMarker.INFERRED_RETURN_TYPE);
+        } else {
+            type = getType(expression);
+        }
+        if (typeCheckingContext.getEnclosingClosure() != null) {
+            return type;
+        }
+        // GRECLIPSE end
         MethodNode enclosingMethod = typeCheckingContext.getEnclosingMethod();
-        if (enclosingMethod != null && typeCheckingContext.getEnclosingClosure() == null) {
+        if (enclosingMethod != null) {
             if (!enclosingMethod.isVoidMethod()
                     && !type.equals(void_WRAPPER_TYPE)
                     && !type.equals(VOID_TYPE)
diff --git a/base/org.codehaus.groovy40/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java b/base/org.codehaus.groovy40/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
index 80e95e5fd4..38edaea7a6 100644
--- a/base/org.codehaus.groovy40/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
+++ b/base/org.codehaus.groovy40/src/org/codehaus/groovy/transform/stc/StaticTypeCheckingVisitor.java
@@ -334,9 +334,15 @@ public class StaticTypeCheckingVisitor extends ClassCodeVisitorSupport {
         @Override
         public void returnStatementAdded(final ReturnStatement returnStatement) {
             if (isNullConstant(returnStatement.getExpression())) return;
+            /* GRECLIPSE edit -- GROOVY-9907
             checkReturnType(returnStatement);
             if (typeCheckingContext.getEnclosingClosure() != null) {
                 addClosureReturnType(getType(returnStatement.getExpression()));
+            */
+            ClassNode returnType = checkReturnType(returnStatement);
+            if (typeCheckingContext.getEnclosingClosure() != null) {
+                addClosureReturnType(returnType);
+            // GRECLIPSE end
             } else if (typeCheckingContext.getEnclosingMethod() == null) {
                 throw new GroovyBugError("Unexpected return statement at " + returnStatement.getLineNumber() + ":" + returnStatement.getColumnNumber() + " " + returnStatement.getText());
             }
@@ -630,7 +636,11 @@ public void visitVariableExpression(final VariableExpression vexp) {
                     }
                 }
             }
+        /* GRECLIPSE edit -- GROOVY-9907
         } else if (enclosingClosure == null) {
+        */
+        } else {
+        // GRECLIPSE end
             VariableExpression localVariable;
             if (accessedVariable instanceof Parameter) {
                 Parameter parameter = (Parameter) accessedVariable;
@@ -2148,6 +2158,7 @@ private ClassNode infer(final ClassNode target, final ClassNode source) {
 
     protected ClassNode checkReturnType(final ReturnStatement statement) {
         Expression expression = statement.getExpression();
+        /* GRECLIPSE edit -- GROOVY-9907
         ClassNode type = getType(expression);
 
         if (typeCheckingContext.getEnclosingClosure() != null) {
@@ -2157,8 +2168,19 @@ protected ClassNode checkReturnType(final ReturnStatement statement) {
         if ((expression instanceof VariableExpression) && hasInferredReturnType(expression)) {
             type = expression.getNodeMetaData(INFERRED_RETURN_TYPE);
         }
+        */
+        ClassNode type;
+        if (expression instanceof VariableExpression && hasInferredReturnType(expression)) {
+            type = expression.getNodeMetaData(StaticTypesMarker.INFERRED_RETURN_TYPE);
+        } else {
+            type = getType(expression);
+        }
+        if (typeCheckingContext.getEnclosingClosure() != null) {
+            return type;
+        }
+        // GRECLIPSE end
         MethodNode enclosingMethod = typeCheckingContext.getEnclosingMethod();
-        if (enclosingMethod != null && typeCheckingContext.getEnclosingClosure() == null) {
+        if (enclosingMethod != null) {
             if (!enclosingMethod.isVoidMethod()
                     && !type.equals(void_WRAPPER_TYPE)
                     && !type.equals(VOID_TYPE)