diff --git a/docs/release-notes/.FSharp.Compiler.Service/10.0.100.md b/docs/release-notes/.FSharp.Compiler.Service/10.0.100.md
index a3949c5b823..3f356fcc03a 100644
--- a/docs/release-notes/.FSharp.Compiler.Service/10.0.100.md
+++ b/docs/release-notes/.FSharp.Compiler.Service/10.0.100.md
@@ -11,6 +11,7 @@
 * Fix find all references for F# exceptions ([PR #18565](https://github.com/dotnet/fsharp/pull/18565))
 * Shorthand lambda: fix completion for chained calls and analysis for unfinished expression ([PR #18560](https://github.com/dotnet/fsharp/pull/18560))
 * Completion: fix previous namespace considered opened [PR #18609](https://github.com/dotnet/fsharp/pull/18609)
+* Fix active pattern typechecking regression. ([Issue #18638](https://github.com/dotnet/fsharp/issues/18638), [PR #18642](https://github.com/dotnet/fsharp/pull/18642))
 
 ### Added
 
diff --git a/src/Compiler/Checking/Expressions/CheckExpressions.fs b/src/Compiler/Checking/Expressions/CheckExpressions.fs
index 4ce2fb1700b..e1410e8c595 100644
--- a/src/Compiler/Checking/Expressions/CheckExpressions.fs
+++ b/src/Compiler/Checking/Expressions/CheckExpressions.fs
@@ -5259,6 +5259,8 @@ and TcPatLongIdentActivePatternCase warnOnUpper (cenv: cenv) (env: TcEnv) vFlags
                 | _, _ -> FSComp.SR.tcActivePatternArgsCountNotMatchArgsAndPat(paramCount, caseName, fmtExprArgs paramCount)
             error(Error(msg, m))
 
+        let isUnsolvedTyparTy g ty = tryDestTyparTy g ty |> ValueOption.exists (fun typar -> not typar.IsSolved)
+
         // partial active pattern (returning bool) doesn't have output arg
         if (not apinfo.IsTotal && isBoolTy g retTy) then
             checkLanguageFeatureError g.langVersion LanguageFeature.BooleanReturningAndReturnTypeDirectedPartialActivePattern m
@@ -5281,7 +5283,8 @@ and TcPatLongIdentActivePatternCase warnOnUpper (cenv: cenv) (env: TcEnv) vFlags
                  showErrMsg 1
 
         // active pattern in function param (e.g. let f (|P|_|) = ...)
-        elif tryDestTyparTy g vExprTy |> ValueOption.exists (fun typar -> not typar.IsSolved) then
+        // or in mutual recursion with a lambda: `and (|P|) x = fun y -> …`
+        elif isUnsolvedTyparTy g vExprTy || tryDestFunTy g vExprTy |> ValueOption.exists (fun (_, rangeTy) -> isUnsolvedTyparTy g rangeTy) then
             List.frontAndBack args
 
         // args count should equal to AP function params count
diff --git a/tests/FSharp.Compiler.ComponentTests/ErrorMessages/ActivePatternArgCountMismatchTest.fs b/tests/FSharp.Compiler.ComponentTests/ErrorMessages/ActivePatternArgCountMismatchTest.fs
index 8c2133721d2..09de043f4fd 100644
--- a/tests/FSharp.Compiler.ComponentTests/ErrorMessages/ActivePatternArgCountMismatchTest.fs
+++ b/tests/FSharp.Compiler.ComponentTests/ErrorMessages/ActivePatternArgCountMismatchTest.fs
@@ -761,6 +761,26 @@ match 1 with P expr2 pat -> ()
             |> typecheck
             |> shouldSucceed
 
+    module ``Recursive active pattern definition with and`` =
+        /// See https://github.com/dotnet/fsharp/issues/18638
+        [<Fact>]
+        let ``match expr1 with P expr2 pat -> …`` () =
+            FSharp """
+let rec parse p =
+    function
+    | IsSomething p v -> Some v
+    | _ -> None
+
+and (|IsSomething|_|) p =
+    function
+    | "nested" -> parse p "42"
+    | "42" -> Some 42
+    | _ -> None
+            """
+            |> withNoWarn IncompletePatternMatches
+            |> typecheck
+            |> shouldSucceed
+
     module ``int → int → int voption`` =
         // Normal usage; pat is int.
         [<Fact>]