diff --git a/internal/checker/checker.go b/internal/checker/checker.go
index 5bf47a1049..b2fb6879ed 100644
--- a/internal/checker/checker.go
+++ b/internal/checker/checker.go
@@ -21508,6 +21508,9 @@ func (c *Checker) instantiateTypeWithAlias(t *Type, m *TypeMapper, alias *TypeAl
 		// or expression. There is a very high likelihood we're dealing with a combination of infinite generic types
 		// that perpetually generate new type identities, so we stop the recursion here by yielding the error type.
 		c.error(c.currentNode, diagnostics.Type_instantiation_is_excessively_deep_and_possibly_infinite)
+		// Set this to a max value to "propagate" the error through any further instantiations within the currently checked node.
+		// This can skip a bunch of redundant work in the case of hitting the depth limit.
+		c.instantiationCount = 5_000_000
 		return c.errorType
 	}
 	index := c.findActiveMapper(m)
diff --git a/testdata/baselines/reference/compiler/recursiveConditionalCrash5.errors.txt b/testdata/baselines/reference/compiler/recursiveConditionalCrash5.errors.txt
new file mode 100644
index 0000000000..3ffc0188f5
--- /dev/null
+++ b/testdata/baselines/reference/compiler/recursiveConditionalCrash5.errors.txt
@@ -0,0 +1,21 @@
+recursiveConditionalCrash5.ts(13,6): error TS2589: Type instantiation is excessively deep and possibly infinite.
+
+
+==== recursiveConditionalCrash5.ts (1 errors) ====
+    // https://github.com/microsoft/TypeScript/issues/63269
+    
+    type Prepend<Elm, T extends unknown[]> = T extends unknown
+      ? ((arg: Elm, ...rest: T) => void) extends (...args: infer T2) => void
+        ? T2
+        : never
+      : never;
+    
+    type ExactExtract<T, U> = (T extends U ? U extends T ? T : never : never) & string;
+    
+    type Conv<T, U = T> = {
+      0: [T];
+      1: Prepend<T, Conv<ExactExtract<U, T>>>;
+         ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
+!!! error TS2589: Type instantiation is excessively deep and possibly infinite.
+    }[U extends T ? 0 : 1];
+    
\ No newline at end of file
diff --git a/testdata/baselines/reference/compiler/recursiveConditionalCrash5.symbols b/testdata/baselines/reference/compiler/recursiveConditionalCrash5.symbols
new file mode 100644
index 0000000000..f069549903
--- /dev/null
+++ b/testdata/baselines/reference/compiler/recursiveConditionalCrash5.symbols
@@ -0,0 +1,58 @@
+//// [tests/cases/compiler/recursiveConditionalCrash5.ts] ////
+
+=== recursiveConditionalCrash5.ts ===
+// https://github.com/microsoft/TypeScript/issues/63269
+
+type Prepend<Elm, T extends unknown[]> = T extends unknown
+>Prepend : Symbol(Prepend, Decl(recursiveConditionalCrash5.ts, 0, 0))
+>Elm : Symbol(Elm, Decl(recursiveConditionalCrash5.ts, 2, 13))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 2, 17))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 2, 17))
+
+  ? ((arg: Elm, ...rest: T) => void) extends (...args: infer T2) => void
+>arg : Symbol(arg, Decl(recursiveConditionalCrash5.ts, 3, 6))
+>Elm : Symbol(Elm, Decl(recursiveConditionalCrash5.ts, 2, 13))
+>rest : Symbol(rest, Decl(recursiveConditionalCrash5.ts, 3, 15))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 2, 17))
+>args : Symbol(args, Decl(recursiveConditionalCrash5.ts, 3, 46))
+>T2 : Symbol(T2, Decl(recursiveConditionalCrash5.ts, 3, 60))
+
+    ? T2
+>T2 : Symbol(T2, Decl(recursiveConditionalCrash5.ts, 3, 60))
+
+    : never
+  : never;
+
+type ExactExtract<T, U> = (T extends U ? U extends T ? T : never : never) & string;
+>ExactExtract : Symbol(ExactExtract, Decl(recursiveConditionalCrash5.ts, 6, 10))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 8, 18))
+>U : Symbol(U, Decl(recursiveConditionalCrash5.ts, 8, 20))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 8, 18))
+>U : Symbol(U, Decl(recursiveConditionalCrash5.ts, 8, 20))
+>U : Symbol(U, Decl(recursiveConditionalCrash5.ts, 8, 20))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 8, 18))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 8, 18))
+
+type Conv<T, U = T> = {
+>Conv : Symbol(Conv, Decl(recursiveConditionalCrash5.ts, 8, 83))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 10, 10))
+>U : Symbol(U, Decl(recursiveConditionalCrash5.ts, 10, 12))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 10, 10))
+
+  0: [T];
+>0 : Symbol(0, Decl(recursiveConditionalCrash5.ts, 10, 23))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 10, 10))
+
+  1: Prepend<T, Conv<ExactExtract<U, T>>>;
+>1 : Symbol(1, Decl(recursiveConditionalCrash5.ts, 11, 9))
+>Prepend : Symbol(Prepend, Decl(recursiveConditionalCrash5.ts, 0, 0))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 10, 10))
+>Conv : Symbol(Conv, Decl(recursiveConditionalCrash5.ts, 8, 83))
+>ExactExtract : Symbol(ExactExtract, Decl(recursiveConditionalCrash5.ts, 6, 10))
+>U : Symbol(U, Decl(recursiveConditionalCrash5.ts, 10, 12))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 10, 10))
+
+}[U extends T ? 0 : 1];
+>U : Symbol(U, Decl(recursiveConditionalCrash5.ts, 10, 12))
+>T : Symbol(T, Decl(recursiveConditionalCrash5.ts, 10, 10))
+
diff --git a/testdata/baselines/reference/compiler/recursiveConditionalCrash5.types b/testdata/baselines/reference/compiler/recursiveConditionalCrash5.types
new file mode 100644
index 0000000000..7c34e4e493
--- /dev/null
+++ b/testdata/baselines/reference/compiler/recursiveConditionalCrash5.types
@@ -0,0 +1,31 @@
+//// [tests/cases/compiler/recursiveConditionalCrash5.ts] ////
+
+=== recursiveConditionalCrash5.ts ===
+// https://github.com/microsoft/TypeScript/issues/63269
+
+type Prepend<Elm, T extends unknown[]> = T extends unknown
+>Prepend : Prepend<Elm, T>
+
+  ? ((arg: Elm, ...rest: T) => void) extends (...args: infer T2) => void
+>arg : Elm
+>rest : T
+>args : T2
+
+    ? T2
+    : never
+  : never;
+
+type ExactExtract<T, U> = (T extends U ? U extends T ? T : never : never) & string;
+>ExactExtract : ExactExtract<T, U>
+
+type Conv<T, U = T> = {
+>Conv : Conv<T, U>
+
+  0: [T];
+>0 : [T]
+
+  1: Prepend<T, Conv<ExactExtract<U, T>>>;
+>1 : Prepend<T, Conv<ExactExtract<U, T>, ExactExtract<U, T>>>
+
+}[U extends T ? 0 : 1];
+
diff --git a/testdata/tests/cases/compiler/recursiveConditionalCrash5.ts b/testdata/tests/cases/compiler/recursiveConditionalCrash5.ts
new file mode 100644
index 0000000000..2303058f23
--- /dev/null
+++ b/testdata/tests/cases/compiler/recursiveConditionalCrash5.ts
@@ -0,0 +1,17 @@
+// @strict: true
+// @noEmit: true
+
+// https://github.com/microsoft/TypeScript/issues/63269
+
+type Prepend<Elm, T extends unknown[]> = T extends unknown
+  ? ((arg: Elm, ...rest: T) => void) extends (...args: infer T2) => void
+    ? T2
+    : never
+  : never;
+
+type ExactExtract<T, U> = (T extends U ? U extends T ? T : never : never) & string;
+
+type Conv<T, U = T> = {
+  0: [T];
+  1: Prepend<T, Conv<ExactExtract<U, T>>>;
+}[U extends T ? 0 : 1];