diff --git a/pyrefly/lib/alt/unwrap.rs b/pyrefly/lib/alt/unwrap.rs
index a65f6fe395..5d90496993 100644
--- a/pyrefly/lib/alt/unwrap.rs
+++ b/pyrefly/lib/alt/unwrap.rs
@@ -299,7 +299,19 @@ impl<'a, Ans: LookupAnswer> AnswersSolver<'a, Ans> {
             .heap
             .mk_class_type(self.stdlib.list(elem.to_type(self.heap)));
         if self.is_subset_eq(&list_type, hint) {
-            self.resolve_var_opt(hint, elem)
+            let elem = self.resolve_var_opt(hint, elem);
+            // A bounded call type variable may only decompose to the `Any` in its bound. In that
+            // case the unhinted list type provides the useful constraint for solving the call.
+            if elem.as_ref().is_some_and(Type::is_any)
+                && hint
+                    .collect_maybe_placeholder_vars()
+                    .into_iter()
+                    .any(|var| self.solver().var_is_quantified(var))
+            {
+                None
+            } else {
+                elem
+            }
         } else {
             None
         }
diff --git a/pyrefly/lib/test/calls.rs b/pyrefly/lib/test/calls.rs
index c1dbec79c9..b87d448475 100644
--- a/pyrefly/lib/test/calls.rs
+++ b/pyrefly/lib/test/calls.rs
@@ -324,6 +324,15 @@ reduce(max, [1,2])
     "#,
 );
 
+testcase!(
+    test_iter_list_literal,
+    r#"
+from typing import Iterator, assert_type
+
+assert_type(iter([0]), Iterator[int])
+    "#,
+);
+
 testcase!(
     test_call_arg_lambda_contextual_typing,
     r#"