diff --git a/mypy/subtypes.py b/mypy/subtypes.py
index bc35b1a4d683..d721b6d9be2a 100644
--- a/mypy/subtypes.py
+++ b/mypy/subtypes.py
@@ -893,6 +893,10 @@ def visit_type_type(self, left: TypeType) -> bool:
         if isinstance(right, TypeType):
             return self._is_subtype(left.item, right.item)
         if isinstance(right, CallableType):
+            if self.proper_subtype and not right.is_type_obj():
+                # We can't accept `Type[X]` as a *proper* subtype of Callable[P, X]
+                # since this will break transitivity of subtyping.
+                return False
             # This is unsound, we don't check the __init__ signature.
             return self._is_subtype(left.item, right.ret_type)
         if isinstance(right, Instance):
diff --git a/test-data/unit/check-inference.test b/test-data/unit/check-inference.test
index 9ee8b3989de8..6767f1c7995c 100644
--- a/test-data/unit/check-inference.test
+++ b/test-data/unit/check-inference.test
@@ -3372,3 +3372,13 @@ class B:
 [out]
 tmp/b.py:2: note: Revealed type is "builtins.int"
 tmp/a.py:2: note: Revealed type is "builtins.int"
+
+[case testUnionTypeCallableInference]
+from typing import Callable, Type, TypeVar, Union
+
+class A:
+    def __init__(self, x: str) -> None: ...
+
+T = TypeVar("T")
+def type_or_callable(value: T, tp: Union[Type[T], Callable[[int], T]]) -> T: ...
+reveal_type(type_or_callable(A("test"), A))  # N: Revealed type is "__main__.A"