diff --git a/crates/ty_python_semantic/src/types/infer/builder.rs b/crates/ty_python_semantic/src/types/infer/builder.rs
index 06cb805c15..b585e3b5df 100644
--- a/crates/ty_python_semantic/src/types/infer/builder.rs
+++ b/crates/ty_python_semantic/src/types/infer/builder.rs
@@ -2241,7 +2241,7 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
             name,
             type_params,
             parameters,
-            returns,
+            returns: _,
             body: _,
             decorator_list,
         } = function;
@@ -2288,21 +2288,13 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
             self.infer_expression(default, TypeContext::default());
         }
 
-        // If there are type params, parameters and returns are evaluated in that scope, that is, in
-        // `infer_function_type_params`, rather than here.
+        // If there are type params, parameters and returns are evaluated in that scope. Otherwise,
+        // we always defer the inference of the parameters and returns. That ensures that we do not
+        // add any spurious salsa cycles when applying decorators below. (Applying a decorator
+        // requires getting the signature of this function definition, which in turn requires
+        // (lazily) inferring the parameter and return types.)
         if type_params.is_none() {
-            if self.defer_annotations() {
-                self.deferred.insert(definition, self.multi_inference_state);
-            } else {
-                let previous_typevar_binding_context =
-                    self.typevar_binding_context.replace(definition);
-                self.infer_return_type_annotation(
-                    returns.as_deref(),
-                    DeferredExpressionState::None,
-                );
-                self.infer_parameters(parameters);
-                self.typevar_binding_context = previous_typevar_binding_context;
-            }
+            self.deferred.insert(definition, self.multi_inference_state);
         }
 
         let known_function =
diff --git a/crates/ty_python_semantic/src/types/signatures.rs b/crates/ty_python_semantic/src/types/signatures.rs
index 520cdc9e10..0a9dd56268 100644
--- a/crates/ty_python_semantic/src/types/signatures.rs
+++ b/crates/ty_python_semantic/src/types/signatures.rs
@@ -17,8 +17,10 @@ use smallvec::{SmallVec, smallvec_inline};
 
 use super::{DynamicType, Type, TypeVarVariance, definition_expression_type};
 use crate::semantic_index::definition::Definition;
+use crate::semantic_index::semantic_index;
 use crate::types::constraints::{ConstraintSet, IteratorConstraintsExtension};
 use crate::types::generics::{GenericContext, InferableTypeVars, walk_generic_context};
+use crate::types::infer::{infer_deferred_types, infer_scope_types};
 use crate::types::{
     ApplyTypeMappingVisitor, BindingContext, BoundTypeVarInstance, CallableTypeKind,
     FindLegacyTypeVarsVisitor, HasRelationToVisitor, IsDisjointVisitor, IsEquivalentVisitor,
@@ -28,6 +30,33 @@ use crate::types::{
 use crate::{Db, FxOrderSet};
 use ruff_python_ast::{self as ast, name::Name};
 
+/// Infer the type of a parameter or return annotation in a function signature.
+///
+/// This is very similar to
+/// [`definition_expression_type`][crate::types::definition_expression_type], but knows that
+/// `TypeInferenceBuilder` will always infer the parameters and return of a function in its PEP-695
+/// typevar scope, if there is one; otherwise they will be inferred in the function definition
+/// scope, but will always be deferred. (This prevents spurious salsa cycles when we need the
+/// signature of the function while in the middle of inferring its definition scope — for instance,
+/// when applying decorators.)
+fn function_signature_expression_type<'db>(
+    db: &'db dyn Db,
+    definition: Definition<'db>,
+    expression: &ast::Expr,
+) -> Type<'db> {
+    let file = definition.file(db);
+    let index = semantic_index(db, file);
+    let file_scope = index.expression_scope_id(expression);
+    let scope = file_scope.to_scope_id(db, file);
+    if scope == definition.scope(db) {
+        // expression is in the function definition scope, but always deferred
+        infer_deferred_types(db, definition).expression_type(expression)
+    } else {
+        // expression is in the PEP-695 type params sub-scope
+        infer_scope_types(db, scope).expression_type(expression)
+    }
+}
+
 /// The signature of a single callable. If the callable is overloaded, there is a separate
 /// [`Signature`] for each overload.
 #[derive(Clone, Debug, PartialEq, Eq, Hash, salsa::Update, get_size2::GetSize)]
@@ -527,7 +556,7 @@ impl<'db> Signature<'db> {
         let return_ty = function_node
             .returns
             .as_ref()
-            .map(|returns| definition_expression_type(db, definition, returns.as_ref()));
+            .map(|returns| function_signature_expression_type(db, definition, returns.as_ref()));
         let legacy_generic_context =
             GenericContext::from_function_params(db, definition, &parameters, return_ty);
         let full_generic_context = GenericContext::merge_pep695_and_legacy(
@@ -2089,7 +2118,7 @@ impl<'db> Parameter<'db> {
         Self {
             annotated_type: parameter
                 .annotation()
-                .map(|annotation| definition_expression_type(db, definition, annotation)),
+                .map(|annotation| function_signature_expression_type(db, definition, annotation)),
             kind,
             form: ParameterForm::Value,
             inferred_annotation: false,