diff --git a/mypy/semanal_namedtuple.py b/mypy/semanal_namedtuple.py
index 07863dea2efb..109ec17cbc89 100644
--- a/mypy/semanal_namedtuple.py
+++ b/mypy/semanal_namedtuple.py
@@ -186,11 +186,16 @@ def check_namedtuple(self,
             # Error. Construct dummy return value.
             if var_name:
                 name = var_name
+                if is_func_scope:
+                    name += '@' + str(call.line)
             else:
-                name = 'namedtuple@' + str(call.line)
+                name = var_name = 'namedtuple@' + str(call.line)
             info = self.build_namedtuple_typeinfo(name, [], [], {}, node.line)
-            self.store_namedtuple_info(info, name, call, is_typed)
-            return name, info
+            self.store_namedtuple_info(info, var_name, call, is_typed)
+            if name != var_name or is_func_scope:
+                # NOTE: we skip local namespaces since they are not serialized.
+                self.api.add_symbol_skip_local(name, info)
+            return var_name, info
         if not ok:
             # This is a valid named tuple but some types are not ready.
             return typename, None
diff --git a/test-data/unit/check-incremental.test b/test-data/unit/check-incremental.test
index c604b386691b..79fa1c92c52e 100644
--- a/test-data/unit/check-incremental.test
+++ b/test-data/unit/check-incremental.test
@@ -5711,3 +5711,32 @@ class C:
 [builtins fixtures/dict.pyi]
 [out2]
 tmp/a.py:2: error: "object" has no attribute "xyz"
+
+[case testIncrementalInvalidNamedTupleInUnannotatedFunction]
+import a
+
+[file a.py]
+import b
+
+[file a.py.2]
+import b # f
+
+[file b.py]
+from typing import NamedTuple
+
+def toplevel(fields):
+    TupleType = NamedTuple("TupleType", fields)
+    class InheritFromTuple(TupleType):
+        pass
+    NT2 = NamedTuple("bad", [('x', int)])
+    nt2: NT2 = NT2(x=1)
+
+class C:
+    def method(self, fields):
+        TupleType = NamedTuple("TupleType", fields)
+        class InheritFromTuple(TupleType):
+            pass
+        NT2 = NamedTuple("bad", [('x', int)])
+        nt2: NT2 = NT2(x=1)
+
+[builtins fixtures/tuple.pyi]
diff --git a/test-data/unit/check-namedtuple.test b/test-data/unit/check-namedtuple.test
index b95cc96f8115..c6f1fe3b1d04 100644
--- a/test-data/unit/check-namedtuple.test
+++ b/test-data/unit/check-namedtuple.test
@@ -1120,3 +1120,17 @@ def bar1(c: C1) -> None:
         reveal_type(c)  # N: Revealed type is "Tuple[builtins.int, fallback=__main__.C1]"
 [builtins fixtures/tuple.pyi]
 [typing fixtures/typing-namedtuple.pyi]
+
+[case testInvalidNamedTupleWithinFunction]
+from collections import namedtuple
+
+def f(fields) -> None:
+    TupleType = namedtuple("TupleType", fields) \
+        # E: List or tuple literal expected as the second argument to "namedtuple()"
+    class InheritFromTuple(TupleType):
+        pass
+    t: TupleType
+    it: InheritFromTuple
+    NT2 = namedtuple("bad", "x") # E: First argument to namedtuple() should be "NT2", not "bad"
+    nt2: NT2 = NT2(x=1)
+[builtins fixtures/tuple.pyi]