diff --git a/docs/type-concepts-advanced.md b/docs/type-concepts-advanced.md
index 19c3097aa..ba7bd8963 100644
--- a/docs/type-concepts-advanced.md
+++ b/docs/type-concepts-advanced.md
@@ -155,6 +155,7 @@ def func4(x: str | None):
 ```
 
 ### Narrowing for Implied Else
+
 When an “if” or “elif” clause is used without a corresponding “else”, Pyright will generally assume that the code can “fall through” without executing the “if” or “elif” block. However, there are cases where the analyzer can determine that a fall-through is not possible because the “if” or “elif” is guaranteed to be executed based on type analysis.
 
 ```python
@@ -222,6 +223,24 @@ b = c
 reveal_type(b) # list[Any]
 ```
 
+### Narrowing for Captured Variables
+
+If a variable’s type is narrowed in an outer scope and the variable is subsequently captured by an inner-scoped function or lambda, Pyright retains the narrowed type if it can determine that the value of the captured variable is not modified on any code path after the inner-scope function or lambda is defined and is not modified in another scope via a `nonlocal` or `global` binding.
+
+```python
+def func(val: int | None):
+    if val is not None:
+
+        def inner_1() -> None:
+            reveal_type(val)  # int
+            print(val + 1)
+
+        inner_2 = lambda: reveal_type(val) + 1  # int
+
+        inner_1()
+        inner_2()
+```
+
 ### Constrained Type Variables
 
 When a TypeVar is defined, it can be constrained to two or more types.
diff --git a/packages/pyright-internal/src/analyzer/typeEvaluator.ts b/packages/pyright-internal/src/analyzer/typeEvaluator.ts
index 33bb231c5..3a3b701b3 100644
--- a/packages/pyright-internal/src/analyzer/typeEvaluator.ts
+++ b/packages/pyright-internal/src/analyzer/typeEvaluator.ts
@@ -4329,15 +4329,27 @@ export function createTypeEvaluator(importLookup: ImportLookup, evaluatorOptions
     ): FlowNodeTypeResult | undefined {
         // This function applies only to variables, parameters, and imports, not to other
         // types of symbols.
+        const decls = symbolWithScope.symbol.getDeclarations();
         if (
-            !symbolWithScope.symbol
-                .getDeclarations()
-                .every(
-                    (decl) =>
-                        decl.type === DeclarationType.Variable ||
-                        decl.type === DeclarationType.Parameter ||
-                        decl.type === DeclarationType.Alias
-                )
+            !decls.every(
+                (decl) =>
+                    decl.type === DeclarationType.Variable ||
+                    decl.type === DeclarationType.Parameter ||
+                    decl.type === DeclarationType.Alias
+            )
+        ) {
+            return undefined;
+        }
+
+        // If the symbol is modified in scopes other than the one in which it is
+        // declared (e.g. through a nonlocal or global binding), it is not eligible
+        // for code flow analysis.
+        if (
+            !decls.every(
+                (decl) =>
+                    decl.type === DeclarationType.Parameter ||
+                    ScopeUtils.getScopeForNode(decl.node) === symbolWithScope.scope
+            )
         ) {
             return undefined;
         }
@@ -4390,7 +4402,12 @@ export function createTypeEvaluator(importLookup: ImportLookup, evaluatorOptions
                             );
                         })
                     ) {
-                        return getFlowTypeOfReference(node, symbolWithScope.symbol.id, effectiveType, innerScopeNode);
+                        let typeAtStart = effectiveType;
+                        if (symbolWithScope.symbol.isInitiallyUnbound()) {
+                            typeAtStart = UnboundType.create();
+                        }
+
+                        return getFlowTypeOfReference(node, symbolWithScope.symbol.id, typeAtStart, innerScopeNode);
                     }
                 }
             }
diff --git a/packages/pyright-internal/src/tests/samples/capturedVariable1.py b/packages/pyright-internal/src/tests/samples/capturedVariable1.py
index 1f025f3a5..768a31c45 100644
--- a/packages/pyright-internal/src/tests/samples/capturedVariable1.py
+++ b/packages/pyright-internal/src/tests/samples/capturedVariable1.py
@@ -104,3 +104,18 @@ def func9(x: str | None):
         return x.upper()
 
     return x.upper()
+
+
+def func10(cond: bool, val: str):
+    x: str | None = val if cond else None
+    y: str | None = val if cond else None
+
+    def inner1():
+        nonlocal x
+        x = None
+
+    if x is not None and y is not None:
+
+        def inner2():
+            reveal_type(x, expected_text="str | None")
+            reveal_type(y, expected_text="str")
diff --git a/packages/pyright-internal/src/tests/samples/unbound5.py b/packages/pyright-internal/src/tests/samples/unbound5.py
new file mode 100644
index 000000000..0a9c245a5
--- /dev/null
+++ b/packages/pyright-internal/src/tests/samples/unbound5.py
@@ -0,0 +1,31 @@
+# This sample tests the interplay between unbound symbol detection and
+# the code that handles conditional narrowing of captured variables.
+
+from random import random
+
+
+if random() > 0.5:
+    from datetime import datetime
+    from math import cos
+
+# The following should generate an error because datetime
+# is "narrowed" across execution scopes.
+test0 = lambda: datetime
+
+
+def test1():
+    # The following should generate an error because datetime
+    # is "narrowed" across execution scopes.
+    return datetime
+
+
+test2 = lambda: cos
+
+
+def test2():
+    return cos
+
+
+# This modification means that cos will not be narrowed
+# across execution scopes.
+cos = None
diff --git a/packages/pyright-internal/src/tests/typeEvaluator2.test.ts b/packages/pyright-internal/src/tests/typeEvaluator2.test.ts
index 7aebf6319..4f74c992f 100644
--- a/packages/pyright-internal/src/tests/typeEvaluator2.test.ts
+++ b/packages/pyright-internal/src/tests/typeEvaluator2.test.ts
@@ -322,6 +322,12 @@ test('Unbound4', () => {
     TestUtils.validateResults(analysisResults, 2);
 });
 
+test('Unbound5', () => {
+    const analysisResults = TestUtils.typeAnalyzeSampleFiles(['unbound5.py']);
+
+    TestUtils.validateResults(analysisResults, 2);
+});
+
 test('Assert1', () => {
     const configOptions = new ConfigOptions('.');