diff --git a/pyrefly/lib/solver/solver.rs b/pyrefly/lib/solver/solver.rs
index 5654db0d25..8d902236db 100644
--- a/pyrefly/lib/solver/solver.rs
+++ b/pyrefly/lib/solver/solver.rs
@@ -2645,6 +2645,9 @@ pub enum SubsetError {
     /// A function without **kwargs is not assignable to a function with Unpack-ed TypedDict **kwargs
     /// unless the TypedDict is closed.
     OpenTypedDictKwargs(Name),
+    /// A bound method cannot be converted to a callable because there is no
+    /// receiver parameter to bind.
+    BoundMethodMissingSelf(Name),
     // TODO(rechen): replace this with specific reasons
     Other,
 }
@@ -2683,6 +2686,9 @@ impl SubsetError {
             SubsetError::OpenTypedDictKwargs(td) => Some(format!(
                 "Callable without `**kwargs` cannot be assigned to callable with `**kwargs: Unpack[{td}]`, because `{td}` is not closed and may have additional unknown keys"
             )),
+            SubsetError::BoundMethodMissingSelf(function) => Some(format!(
+                "Function `{function}` is treated as a method when accessed from an instance, but its signature does not accept a bound `self` argument"
+            )),
             SubsetError::Other => None,
         }
     }
diff --git a/pyrefly/lib/solver/subset.rs b/pyrefly/lib/solver/subset.rs
index d9a9b73866..bc8c0b6b14 100644
--- a/pyrefly/lib/solver/subset.rs
+++ b/pyrefly/lib/solver/subset.rs
@@ -1843,21 +1843,31 @@ impl<'a, Ans: LookupAnswer> Subset<'a, Ans> {
                 Ok(())
             }
             (Type::Overload(overload), want) => self.is_subset_overload(overload, want),
-            (Type::BoundMethod(method), Type::Callable(_) | Type::Function(_))
+            (Type::BoundMethod(method), Type::Callable(_) | Type::Function(_)) => {
                 if let Some(l_no_self) =
                     self.type_order.bind_boundmethod(method, &mut |got, want| {
                         self.is_subset_eq(got, want).is_ok()
-                    }) =>
-            {
-                self.is_subset_eq(&l_no_self, want)
+                    })
+                {
+                    self.is_subset_eq(&l_no_self, want)
+                } else {
+                    Err(SubsetError::BoundMethodMissingSelf(
+                        method.func.metadata().kind.function_name().into_owned(),
+                    ))
+                }
             }
-            (Type::Callable(_) | Type::Function(_), Type::BoundMethod(method))
+            (Type::Callable(_) | Type::Function(_), Type::BoundMethod(method)) => {
                 if let Some(u_no_self) =
                     self.type_order.bind_boundmethod(method, &mut |got, want| {
                         self.is_subset_eq(got, want).is_ok()
-                    }) =>
-            {
-                self.is_subset_eq(got, &u_no_self)
+                    })
+                {
+                    self.is_subset_eq(got, &u_no_self)
+                } else {
+                    Err(SubsetError::BoundMethodMissingSelf(
+                        method.func.metadata().kind.function_name().into_owned(),
+                    ))
+                }
             }
             (Type::BoundMethod(l), Type::BoundMethod(u))
                 if let Some(l_no_self) = self
diff --git a/pyrefly/lib/test/attributes.rs b/pyrefly/lib/test/attributes.rs
index a346991eaa..1c0ec0b768 100644
--- a/pyrefly/lib/test/attributes.rs
+++ b/pyrefly/lib/test/attributes.rs
@@ -319,6 +319,23 @@ def foo(x: Callable[[int], str], c: C, c2: C2, c3: C3):
     "#,
 );
 
+testcase!(
+    test_classvar_callable_return_bound_method_error,
+    r#"
+from typing import Callable, ClassVar
+
+def integer_factory() -> int:
+    return 1
+
+class A:
+    _factory: ClassVar[Callable[[], int]] = integer_factory
+
+    @property
+    def factory(self) -> Callable[[], int]:
+        return self._factory  # E: Function `_factory` is treated as a method when accessed from an instance, but its signature does not accept a bound `self` argument
+    "#,
+);
+
 testcase!(
     test_bound_classmethod_explicit_targs,
     r#"