diff --git a/crates/ty_python_semantic/resources/mdtest/annotations/new_types.md b/crates/ty_python_semantic/resources/mdtest/annotations/new_types.md
index a7b354688f..253344dd3c 100644
--- a/crates/ty_python_semantic/resources/mdtest/annotations/new_types.md
+++ b/crates/ty_python_semantic/resources/mdtest/annotations/new_types.md
@@ -541,7 +541,7 @@ class Foo(TypedDict):
 Bar = NewType("Bar", Foo)  # error: [invalid-newtype]
 ```
 
-## TODO: A `NewType` cannot be generic
+## A `NewType` cannot be generic
 
 ```py
 from typing import Any, NewType, TypeVar
@@ -553,7 +553,14 @@ B = NewType("B", list[Any])
 
 # But a free typevar is not allowed.
 T = TypeVar("T")
-C = NewType("C", list[T])  # TODO: should be "error: [invalid-newtype]"
+C = NewType("C", list[T])  # error: [invalid-newtype]
+
+D = dict[str, T]
+E = NewType("E", D[T])  # error: [invalid-newtype]
+
+# this is fine: omitting the type argument means that this is equivalent
+# to `F = NewType("F", dict[str, Any])
+F = NewType("F", D)
 ```
 
 ## Forward references in stub files
diff --git a/crates/ty_python_semantic/src/types/infer/builder.rs b/crates/ty_python_semantic/src/types/infer/builder.rs
index 19f9ba5f7b..8aa106a6ee 100644
--- a/crates/ty_python_semantic/src/types/infer/builder.rs
+++ b/crates/ty_python_semantic/src/types/infer/builder.rs
@@ -6093,7 +6093,7 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
             return error(
                 &self.context,
                 format!(
-                    "Wrong number of arguments in `NewType` creation, expected 2, found {}",
+                    "Wrong number of arguments in `NewType` creation: expected 2, found {}",
                     arguments.args.len()
                 ),
                 call_expr,
@@ -6183,7 +6183,26 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
     fn infer_newtype_assignment_deferred(&mut self, arguments: &ast::Arguments) {
         let inferred = self.infer_type_expression(&arguments.args[1]);
         match inferred {
-            Type::NominalInstance(_) | Type::NewTypeInstance(_) => return,
+            Type::NewTypeInstance(_) => return,
+            Type::NominalInstance(instance) => {
+                match instance.class(self.db()) {
+                    ClassType::NonGeneric(_) => {}
+                    ClassType::Generic(alias) => {
+                        let spec = alias.specialization(self.db());
+                        if spec.types(self.db()).iter().any(|t| {
+                            matches!(t, Type::KnownInstance(KnownInstanceType::TypeVar(_)))
+                        }) && let Some(builder) = self
+                            .context
+                            .report_lint(&INVALID_NEWTYPE, &arguments.args[1])
+                        {
+                            let mut diag =
+                                builder.into_diagnostic("invalid base for `typing.NewType`");
+                            diag.set_primary_message("A `NewType` base cannot be generic");
+                        }
+                    }
+                }
+                return;
+            }
             // There are exactly two union types allowed as bases for NewType: `int | float` and
             // `int | float | complex`. These are allowed because that's what `float` and `complex`
             // expand into in type position. We don't currently ask whether the union was implicit