diff --git a/crates/ty_python_semantic/resources/mdtest/annotations/callable.md b/crates/ty_python_semantic/resources/mdtest/annotations/callable.md
index 688dcb321ad151..91c561749f1dc3 100644
--- a/crates/ty_python_semantic/resources/mdtest/annotations/callable.md
+++ b/crates/ty_python_semantic/resources/mdtest/annotations/callable.md
@@ -42,6 +42,7 @@ Or, when it's a literal type:
 
 ```py
 # error: [invalid-type-form] "The first argument to `Callable` must be either a list of types, ParamSpec, Concatenate, or `...`"
+# error: [invalid-type-form] "Int literals are not allowed in this context in a type expression"
 def _(c: Callable[42, str]):
     reveal_type(c)  # revealed: (...) -> Unknown
 ```
@@ -58,8 +59,6 @@ def _(c: Callable[[int, 42, str, False], None]):
 
 ### Missing return type
 
-<!-- pull-types:skip -->
-
 Using a parameter list:
 
 ```py
@@ -84,12 +83,25 @@ Or something else that's invalid in a type expression generally:
 # fmt: off
 
 def _(c: Callable[  # error: [invalid-type-form] "Special form `typing.Callable` expected exactly two arguments (parameter types and return type)"
+                    # error: [invalid-type-form] "Set literals are not allowed in type expressions"
             {1, 2}  # error: [invalid-type-form] "The first argument to `Callable` must be either a list of types, ParamSpec, Concatenate, or `...`"
         ]
     ):
     reveal_type(c)  # revealed: (...) -> Unknown
 ```
 
+```py
+# fmt: off
+
+def _(c: Callable[
+            # error: [invalid-type-form] "Set literals are not allowed in type expressions"
+            # error: [invalid-type-form] "Int literals are not allowed in this context in a type expression"
+            {1, 2}, 2  # error: [invalid-type-form] "The first argument to `Callable` must be either a list of types, ParamSpec, Concatenate, or `...`"
+        ]
+    ):
+    reveal_type(c)  # revealed: (...) -> Unknown
+```
+
 ### More than two arguments
 
 We can't reliably infer the callable type if there are more then 2 arguments because we don't know
diff --git a/crates/ty_python_semantic/resources/mdtest/call/annotation.md b/crates/ty_python_semantic/resources/mdtest/call/annotation.md
index 937d4226fc4a93..8deb6ae2dae688 100644
--- a/crates/ty_python_semantic/resources/mdtest/call/annotation.md
+++ b/crates/ty_python_semantic/resources/mdtest/call/annotation.md
@@ -38,6 +38,7 @@ An invalid `Callable` form can accept any parameters and will return `Unknown`.
 
 ```py
 # error: [invalid-type-form]
+# error: [invalid-type-form] "Int literals are not allowed in this context in a type expression"
 def _(c: Callable[42, str]):
     reveal_type(c())  # revealed: Unknown
 ```
diff --git a/crates/ty_python_semantic/src/types/infer.rs b/crates/ty_python_semantic/src/types/infer.rs
index 9b6aa19becef47..029335b237f1eb 100644
--- a/crates/ty_python_semantic/src/types/infer.rs
+++ b/crates/ty_python_semantic/src/types/infer.rs
@@ -9601,18 +9601,37 @@ impl<'db> TypeInferenceBuilder<'db, '_> {
             SpecialFormType::Callable => {
                 let mut arguments = match arguments_slice {
                     ast::Expr::Tuple(tuple) => Either::Left(tuple.iter()),
-                    _ => {
-                        self.infer_callable_parameter_types(arguments_slice);
-                        Either::Right(std::iter::empty::<&ast::Expr>())
-                    }
+                    _ => Either::Right(std::iter::once(arguments_slice)),
                 };
 
                 let first_argument = arguments.next();
 
-                let parameters =
-                    first_argument.and_then(|arg| self.infer_callable_parameter_types(arg));
+                // infer_callable_parameter_types(..) does not store the type, but in the case it is not a valid argument
+                // we infer and store it. `storing_parameters_type_needed` avoids storing the `parameters` type multiple times.
+                let parameters = first_argument.and_then(|arg| {
+                    let ty = self.infer_callable_parameter_types(arg);
+                    if ty.is_none() {
+                        self.infer_type_expression(arg);
+                    }
+                    ty
+                });
+                let storing_parameters_type_needed = parameters.is_some();
 
-                let return_type = arguments.next().map(|arg| self.infer_type_expression(arg));
+                let return_type = match arguments.next() {
+                    Some(expr) => Some(self.infer_type_expression(expr)),
+                    None => {
+                        // In case we have a single argument, we return early since the type annotation is not valid.
+                        // We also make sure to store the `CallableType` to the `parameters` if `parameters` is valid.
+                        let ty = CallableType::unknown(db);
+                        if let Some(first_argument) = first_argument {
+                            if storing_parameters_type_needed {
+                                self.store_expression_type(first_argument, ty);
+                            }
+                        }
+                        report_invalid_arguments_to_callable(&self.context, subscript);
+                        return ty;
+                    }
+                };
 
                 let correct_argument_number = if let Some(third_argument) = arguments.next() {
                     self.infer_type_expression(third_argument);
@@ -9637,10 +9656,13 @@ impl<'db> TypeInferenceBuilder<'db, '_> {
                 };
 
                 // `Signature` / `Parameters` are not a `Type` variant, so we're storing
-                // the outer callable type on these expressions instead.
+                // the outer callable type on these expressions instead, unless `first_argument` was invalid
+                // for `Callable`, in which case a type is already stored.
                 self.store_expression_type(arguments_slice, callable_type);
                 if let Some(first_argument) = first_argument {
-                    self.store_expression_type(first_argument, callable_type);
+                    if storing_parameters_type_needed {
+                        self.store_expression_type(first_argument, callable_type);
+                    }
                 }
 
                 callable_type