diff --git a/cl/_testgo/tpycombinator/expect.txt b/cl/_testgo/tpycombinator/expect.txt
new file mode 100644
index 0000000000..c116b4f11f
--- /dev/null
+++ b/cl/_testgo/tpycombinator/expect.txt
@@ -0,0 +1,2 @@
+3628800
+xxx
diff --git a/cl/_testgo/tpycombinator/in.go b/cl/_testgo/tpycombinator/in.go
new file mode 100644
index 0000000000..b8180c0a66
--- /dev/null
+++ b/cl/_testgo/tpycombinator/in.go
@@ -0,0 +1,37 @@
+// LITTEST
+package main
+
+// CHECK-DAG: %"{{.*}}tpycombinator.internal[{{.*}},int,int;{{.*}},int,int]" = type { ptr, ptr }
+// CHECK-DAG: %"{{.*}}tpycombinator.internal[{{.*}},string,string;{{.*}},string,string]" = type { ptr, ptr }
+
+func Y[Endo ~func(RecFct) RecFct, RecFct ~func(T) R, T, R any](f Endo) RecFct {
+	type internal[RecFct ~func(T) R, T, R any] func(internal[RecFct, T, R]) RecFct
+
+	g := func(h internal[RecFct, T, R]) RecFct {
+		return func(t T) R {
+			return f(h(h))(t)
+		}
+	}
+	return g(g)
+}
+
+func main() {
+	factorial := Y(func(recur func(int) int) func(int) int {
+		return func(n int) int {
+			if n == 0 {
+				return 1
+			}
+			return n * recur(n-1)
+		}
+	})
+	repeat := Y(func(recur func(string) string) func(string) string {
+		return func(s string) string {
+			if len(s) == 3 {
+				return s
+			}
+			return recur(s + "x")
+		}
+	})
+	println(factorial(10))
+	println(repeat(""))
+}
diff --git a/cl/compile.go b/cl/compile.go
index 8f99b9a0f5..9dfc1d6851 100644
--- a/cl/compile.go
+++ b/cl/compile.go
@@ -415,7 +415,13 @@ func (p *context) compileGlobal(pkg llssa.Package, gbl *ssa.Global) {
 	}
 }
 
-func makeClosureCtx(pkg *types.Package, vars []*ssa.FreeVar) *types.Var {
+func (p *context) makeClosureCtx(fn *ssa.Function, pkg *types.Package, vars []*ssa.FreeVar) *types.Var {
+	oldGoFn := p.goFn
+	p.goFn = fn
+	defer func() {
+		p.goFn = oldGoFn
+	}()
+
 	n := len(vars)
 	flds := make([]*types.Var, n)
 	for i, v := range vars {
@@ -423,7 +429,7 @@ func makeClosureCtx(pkg *types.Package, vars []*ssa.FreeVar) *types.Var {
 		if name == "" {
 			name = "_"
 		}
-		flds[i] = types.NewField(token.NoPos, pkg, name, v.Type(), false)
+		flds[i] = types.NewField(token.NoPos, pkg, name, p.patchType(v.Type()), false)
 	}
 	t := types.NewPointer(types.NewStruct(flds, nil))
 	return types.NewParam(token.NoPos, pkg, "__llgo_ctx", t)
@@ -552,7 +558,7 @@ func (p *context) compileFuncDecl(pkg llssa.Package, f *ssa.Function) (llssa.Fun
 	var hasCtx = len(f.FreeVars) > 0
 	if hasCtx {
 		dbgInstrln("==> NewClosure", name, "type:", sig)
-		ctx := makeClosureCtx(pkgTypes, f.FreeVars)
+		ctx := p.makeClosureCtx(f, pkgTypes, f.FreeVars)
 		sig = llssa.FuncAddCtx(ctx, sig)
 	} else {
 		dbgInstrln("==> NewFunc", name, "type:", sig.Recv(), sig, "ftype:", ftype)
@@ -2513,19 +2519,16 @@ func (p *context) localTypeOrdinal(obj types.Object) int {
 }
 
 func (p *context) inCurrentFunction(pos token.Pos) bool {
-	if !pos.IsValid() {
-		return false
-	}
-	syntax := p.currentFunctionSyntax()
-	return syntax != nil && syntax.Pos() <= pos && pos <= syntax.End()
+	return p.enclosingFunctionSyntax(pos) != nil
 }
 
 func (p *context) localTypeOrdinalBySyntax(pos token.Pos) int {
-	if !p.inCurrentFunction(pos) {
+	syntax := p.enclosingFunctionSyntax(pos)
+	if syntax == nil {
 		return 0
 	}
 	n := 0
-	ast.Inspect(p.currentFunctionSyntax(), func(node ast.Node) bool {
+	ast.Inspect(syntax, func(node ast.Node) bool {
 		spec, ok := node.(*ast.TypeSpec)
 		if !ok {
 			return true
@@ -2538,15 +2541,22 @@ func (p *context) localTypeOrdinalBySyntax(pos token.Pos) int {
 	return n
 }
 
-func (p *context) currentFunctionSyntax() ast.Node {
-	if p.goFn == nil {
+func (p *context) enclosingFunctionSyntax(pos token.Pos) ast.Node {
+	if !pos.IsValid() {
 		return nil
 	}
-	fn := p.goFn
-	if origin := fn.Origin(); origin != nil {
-		fn = origin
+	// Instantiated local types may lose their scope parent while a nested
+	// closure still refers to a declaration in its enclosing generic function.
+	for fn := p.goFn; fn != nil; fn = fn.Parent() {
+		syntaxFn := fn
+		if origin := fn.Origin(); origin != nil {
+			syntaxFn = origin
+		}
+		if syntax := syntaxFn.Syntax(); syntax != nil && syntax.Pos() <= pos && pos <= syntax.End() {
+			return syntax
+		}
 	}
-	return fn.Syntax()
+	return nil
 }
 
 func isTypeParamObject(obj types.Object) bool {
diff --git a/cl/funcname_nested_closure_test.go b/cl/funcname_nested_closure_test.go
index 6f9034ea6c..e1df6b9a14 100644
--- a/cl/funcname_nested_closure_test.go
+++ b/cl/funcname_nested_closure_test.go
@@ -136,6 +136,102 @@ func localType[T any]() any {
 	}
 }
 
+func TestGenericLocalRecursiveClosureContextTypePatch(t *testing.T) {
+	ssapkg := buildSSAPackage(t, `package foo
+
+func Y[Endo ~func(RecFct) RecFct, RecFct ~func(T) R, T, R any](f Endo) RecFct {
+	type internal[RecFct ~func(T) R, T, R any] func(internal[RecFct, T, R]) RecFct
+	g := func(h internal[RecFct, T, R]) RecFct {
+		return func(t T) R { return f(h(h))(t) }
+	}
+	return g(g)
+}
+
+func use() {
+	intFn := Y(func(recur func(int) int) func(int) int { return recur })
+	stringFn := Y(func(recur func(string) string) func(string) string { return recur })
+	_ = intFn(1)
+	_ = stringFn("")
+}
+`)
+
+	y := ssapkg.Func("Y")
+	if y == nil {
+		t.Fatal("generic Y function not found")
+	}
+	names := make(map[types.BasicKind]string)
+	for instance := range ssautil.AllFunctions(ssapkg.Prog) {
+		if instance == nil || instance.Origin() != y {
+			continue
+		}
+		args := instance.TypeArgs()
+		if len(args) < 3 {
+			t.Fatalf("Y instance type arguments = %v, want T argument", args)
+		}
+		basic, ok := args[2].(*types.Basic)
+		if !ok || basic.Kind() != types.Int && basic.Kind() != types.String {
+			t.Fatalf("Y instance T = %v, want int or string", args[2])
+		}
+
+		if len(instance.AnonFuncs) == 0 {
+			t.Fatal("Y instance outer closure not found")
+		}
+		outer := instance.AnonFuncs[0]
+		if len(outer.AnonFuncs) == 0 {
+			t.Fatal("Y instance inner closure not found")
+		}
+		inner := outer.AnonFuncs[0]
+
+		ctx := &context{goFn: outer}
+		patched := ctx.patchType(outer.Signature).(*types.Signature)
+		param := findLocalNamed(patched.Params().At(0).Type(), ssapkg.Pkg)
+		if param == nil {
+			t.Fatalf("patched Y outer closure parameter = %v, want local named function type", patched.Params().At(0).Type())
+		}
+
+		hIndex := -1
+		for i, freeVar := range inner.FreeVars {
+			if freeVar.Name() == "h" {
+				hIndex = i
+				break
+			}
+		}
+		if hIndex < 0 {
+			t.Fatalf("Y inner closure free variables = %v, want h", inner.FreeVars)
+		}
+		closureCtx := ctx.makeClosureCtx(inner, ssapkg.Pkg, inner.FreeVars)
+		ptr, ok := closureCtx.Type().(*types.Pointer)
+		if !ok {
+			t.Fatalf("closure context type = %T, want pointer", closureCtx.Type())
+		}
+		fields, ok := ptr.Elem().(*types.Struct)
+		if !ok {
+			t.Fatalf("closure context element = %T, want struct", ptr.Elem())
+		}
+		hType := findLocalNamed(fields.Field(hIndex).Type(), ssapkg.Pkg)
+		if hType == nil {
+			t.Fatalf("closure context h field = %v, want local named function type", fields.Field(hIndex).Type())
+		}
+
+		name := param.Obj().Name()
+		if !strings.Contains(name, ";") {
+			t.Fatalf("patched outer parameter name = %q, want outer and own type arguments", name)
+		}
+		if hName := hType.Obj().Name(); hName != name {
+			t.Fatalf("patched h field name = %q, want outer parameter name %q", hName, name)
+		}
+		names[basic.Kind()] = name
+	}
+	intName, hasInt := names[types.Int]
+	stringName, hasString := names[types.String]
+	if !hasInt || !hasString {
+		t.Fatalf("patched local type names = %v, want int and string instances", names)
+	}
+	if intName == stringName {
+		t.Fatalf("int and string instances share patched local type name %q", intName)
+	}
+}
+
 func TestGenericLocalTypePatchHelperBranches(t *testing.T) {
 	ssapkg := buildSSAPackage(t, `package foo
 
@@ -306,9 +402,6 @@ func use() {
 	if ctx.inCurrentFunction(token.NoPos) {
 		t.Fatal("invalid position should not be inside current function")
 	}
-	if (&context{}).currentFunctionSyntax() != nil {
-		t.Fatal("currentFunctionSyntax without goFn should be nil")
-	}
 	if (&context{}).localTypeOrdinalBySyntax(token.Pos(1)) != 0 {
 		t.Fatal("localTypeOrdinalBySyntax without current function should be zero")
 	}
diff --git a/test/goroot/xfail.yaml b/test/goroot/xfail.yaml
index 8183574996..125c11cdae 100644
--- a/test/goroot/xfail.yaml
+++ b/test/goroot/xfail.yaml
@@ -2412,10 +2412,6 @@ xfails:
     directive: run
     case: fixedbugs/issue31546.go
     reason: reflection exposes the initializer value of a blank struct field instead of zero on darwin/arm64
-  - platform: darwin/arm64
-    directive: run
-    case: fixedbugs/issue72063.go
-    reason: generic Y-combinator build exits successfully without producing a binary on darwin/arm64
   - platform: darwin/arm64
     directive: run
     case: fixedbugs/issue72844.go