diff --git a/crates/ty_python_semantic/resources/mdtest/annotations/annotated.md b/crates/ty_python_semantic/resources/mdtest/annotations/annotated.md
index 7c0ba50f1a..1bc97ad4c4 100644
--- a/crates/ty_python_semantic/resources/mdtest/annotations/annotated.md
+++ b/crates/ty_python_semantic/resources/mdtest/annotations/annotated.md
@@ -76,7 +76,18 @@ from ty_extensions import reveal_mro
 
 class C(Annotated[int, "foo"]): ...
 
-reveal_mro(C)  # revealed: (<class 'C'>, <class 'int'>, <class 'object'>)
+# revealed: (<class 'C'>, <class 'int'>, <class 'object'>)
+reveal_mro(C)
+
+class D(Annotated[list[str], "foo"]): ...
+
+# revealed: (<class 'D'>, <class 'list[str]'>, <class 'MutableSequence[str]'>, <class 'Sequence[str]'>, <class 'Reversible[str]'>, <class 'Collection[str]'>, <class 'Iterable[str]'>, <class 'Container[str]'>, typing.Protocol, typing.Generic, <class 'object'>)
+reveal_mro(D)
+
+class E(Annotated[list["E"], "metadata"]): ...
+
+# error: [revealed-type] "Revealed MRO: (<class 'E'>, <class 'list[E]'>, <class 'MutableSequence[E]'>, <class 'Sequence[E]'>, <class 'Reversible[E]'>, <class 'Collection[E]'>, <class 'Iterable[E]'>, <class 'Container[E]'>, typing.Protocol, typing.Generic, <class 'object'>)"
+reveal_mro(E)
 ```
 
 ### Not parameterized
diff --git a/crates/ty_python_semantic/resources/mdtest/implicit_type_aliases.md b/crates/ty_python_semantic/resources/mdtest/implicit_type_aliases.md
index a06b3c65f0..2c52e46a4c 100644
--- a/crates/ty_python_semantic/resources/mdtest/implicit_type_aliases.md
+++ b/crates/ty_python_semantic/resources/mdtest/implicit_type_aliases.md
@@ -974,13 +974,14 @@ We *do* support stringified annotations if they appear in a position where a typ
 syntactically expected:
 
 ```py
-from typing import Union, List, Dict
+from typing import Union, List, Dict, Annotated
 
 ListOfInts1 = list["int"]
 ListOfInts2 = List["int"]
 StrOrStyle = Union[str, "Style"]
 SubclassOfStyle = type["Style"]
 DictStrToStyle = Dict[str, "Style"]
+AnnotatedStyle = Annotated["Style", "metadata"]
 
 class Style: ...
 
@@ -990,12 +991,14 @@ def _(
     str_or_style: StrOrStyle,
     subclass_of_style: SubclassOfStyle,
     dict_str_to_style: DictStrToStyle,
+    annotated_style: AnnotatedStyle,
 ):
     reveal_type(list_of_ints1)  # revealed: list[int]
     reveal_type(list_of_ints2)  # revealed: list[int]
     reveal_type(str_or_style)  # revealed: str | Style
     reveal_type(subclass_of_style)  # revealed: type[Style]
     reveal_type(dict_str_to_style)  # revealed: dict[str, Style]
+    reveal_type(annotated_style)  # revealed: Style
 ```
 
 ## Recursive
diff --git a/crates/ty_python_semantic/src/types.rs b/crates/ty_python_semantic/src/types.rs
index 952609b3cd..e913a445ae 100644
--- a/crates/ty_python_semantic/src/types.rs
+++ b/crates/ty_python_semantic/src/types.rs
@@ -6599,11 +6599,7 @@ impl<'db> Type<'db> {
                     Ok(builder.build())
                 }
                 KnownInstanceType::Literal(ty) => Ok(ty.inner(db)),
-                KnownInstanceType::Annotated(ty) => {
-                    Ok(ty
-                        .inner(db)
-                        .in_type_expression(db, scope_id, typevar_binding_context)?)
-                }
+                KnownInstanceType::Annotated(ty) => Ok(ty.inner(db)),
                 KnownInstanceType::TypeGenericAlias(ty) => {
                     // When `type[…]` appears in a value position (e.g. in an implicit type alias),
                     // we infer its argument as a type expression. This ensures that we can emit
diff --git a/crates/ty_python_semantic/src/types/class_base.rs b/crates/ty_python_semantic/src/types/class_base.rs
index 83f7cf423c..8015dfcf00 100644
--- a/crates/ty_python_semantic/src/types/class_base.rs
+++ b/crates/ty_python_semantic/src/types/class_base.rs
@@ -183,7 +183,16 @@ impl<'db> ClassBase<'db> {
                 KnownInstanceType::TypeGenericAlias(_) => {
                     Self::try_from_type(db, KnownClass::Type.to_class_literal(db), subclass)
                 }
-                KnownInstanceType::Annotated(ty) => Self::try_from_type(db, ty.inner(db), subclass),
+                KnownInstanceType::Annotated(ty) => {
+                    // Unions are not supported in this position, so we only need to support
+                    // something like `class C(Annotated[Base, "metadata"]): ...`, which we
+                    // can do by turning the instance type (`Base` in this example) back into
+                    // a class.
+                    let annotated_ty = ty.inner(db);
+                    let instance_ty = annotated_ty.as_nominal_instance()?;
+
+                    Some(Self::Class(instance_ty.class(db)))
+                }
             },
 
             Type::SpecialForm(special_form) => match special_form {
diff --git a/crates/ty_python_semantic/src/types/infer/builder.rs b/crates/ty_python_semantic/src/types/infer/builder.rs
index 3d573fa27a..ddd6a33edb 100644
--- a/crates/ty_python_semantic/src/types/infer/builder.rs
+++ b/crates/ty_python_semantic/src/types/infer/builder.rs
@@ -10726,7 +10726,7 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
                     self.infer_expression(element, TypeContext::default());
                 }
 
-                let ty = self.infer_expression(type_expr, TypeContext::default());
+                let ty = self.infer_type_expression(type_expr);
 
                 return Type::KnownInstance(KnownInstanceType::Annotated(InternedType::new(
                     self.db(),