diff --git a/compiler/src/dotty/tools/dotc/typer/Typer.scala b/compiler/src/dotty/tools/dotc/typer/Typer.scala
index 5dfbf153903f..59b151e604e2 100644
--- a/compiler/src/dotty/tools/dotc/typer/Typer.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Typer.scala
@@ -2348,7 +2348,7 @@ class Typer extends Namer
       def dummyArg(tp: Type) = untpd.Ident(nme.???).withTypeUnchecked(tp)
 
       def addImplicitArgs(implicit ctx: Context) = {
-        def implicitArgs(formals: List[Type]): List[Tree] = formals match {
+        def implicitArgs(formals: List[Type], argIndex: Int): List[Tree] = formals match {
           case Nil => Nil
           case formal :: formals1 =>
             val arg = inferImplicitArg(formal, tree.pos.endPos)
@@ -2361,10 +2361,17 @@ class Typer extends Namer
                 // If there are none, we have to propagate the ambiguity to the caller.
                 arg :: formals1.map(dummyArg)
               case _ =>
-                arg :: implicitArgs(formals1)
+                // If the implicit parameter list is dependent we must propagate inferred
+                // types through the remainder of the parameter list similarly to how it's
+                // done for non-implicit parameter lists in Applications#matchArgs#addTyped.
+                val formals2 =
+                  if (wtp.isParamDependent && arg.tpe.exists)
+                    formals1.mapconserve(f1 => safeSubstParam(f1, wtp.paramRefs(argIndex), arg.tpe))
+                  else formals1
+                arg :: implicitArgs(formals2, argIndex + 1)
             }
         }
-        val args = implicitArgs(wtp.paramInfos)
+        val args = implicitArgs(wtp.paramInfos, 0)
 
         def propagatedFailure(args: List[Tree]): Type = args match {
           case arg :: args1 =>
diff --git a/tests/neg/i5427.scala b/tests/neg/i5427.scala
new file mode 100644
index 000000000000..807b6898fde9
--- /dev/null
+++ b/tests/neg/i5427.scala
@@ -0,0 +1,26 @@
+trait Foo[In] { type Out }
+
+object Test {
+  def fooInt: Foo[Int] { type Out = String } = ???
+  implicit def str: String = ???
+
+  def test1[A](f1: Foo[A])(implicit f2: f1.Out) = ???
+  def test2[A](implicit f1: Foo[A], f2: f1.Out) = ???
+
+  test1(fooInt)   // OK
+  test2           // error
+}
+
+object Test2 {
+  implicit def fooInt: Foo[Int] { type Out = String } = ???
+  implicit def fooString: Foo[String] { type Out = Boolean } = ???
+  implicit def fooBoolean: Foo[Boolean] { type Out = Double } = ???
+
+  def test3[A](f1: Foo[A], f2: Foo[f1.Out])(implicit f3: Foo[f2.Out]): f3.Out = ???
+  def test4[A](implicit f1: Foo[A], f2: Foo[f1.Out], f3: Foo[f2.Out]): f3.Out = ???
+
+  val t3 = test3(fooInt, fooString)
+  t3: Double
+  val t4 = test4  // error
+  t4: Double
+}
diff --git a/tests/pos/i5427.scala b/tests/pos/i5427.scala
new file mode 100644
index 000000000000..b73f1eee9d3a
--- /dev/null
+++ b/tests/pos/i5427.scala
@@ -0,0 +1,46 @@
+trait Foo[In] { type Out }
+
+object Test {
+  implicit def fooInt: Foo[Int] { type Out = String } = ???
+  implicit def str: String = ???
+
+  def test1[A](f1: Foo[A])(implicit f2: f1.Out) = ???
+  def test2[A](implicit f1: Foo[A], f2: f1.Out) = ???
+
+  test1(fooInt) // OK
+  test2         // OK
+}
+
+object Test2 {
+  implicit def fooInt: Foo[Int] { type Out = String } = ???
+  implicit def fooString: Foo[String] { type Out = Boolean } = ???
+  implicit def fooBoolean: Foo[Boolean] { type Out = Double } = ???
+
+  def test3[A](f1: Foo[A], f2: Foo[f1.Out])(implicit f3: Foo[f2.Out]): f3.Out = ???
+  def test4[A](implicit f1: Foo[A], f2: Foo[f1.Out], f3: Foo[f2.Out]): f3.Out = ???
+
+  val t3 = test3(fooInt, fooString)
+  t3: Double
+  val t4 = test4[Int]
+  t4: Double
+}
+
+object Test3 {
+  def fooInt: Foo[Int] { type Out = String } = ???
+  implicit def str: String = ???
+
+  def test5[A](implicit f1: Foo[A] = fooInt, f2: f1.Out) = f2
+
+  val t5 = test5
+  t5: String
+}
+
+object Test4 {
+  implicit def fooInt: Foo[Int] { type Out = String } = ???
+  def str: String = ???
+
+  def test6[A](implicit f1: Foo[A], f2: f1.Out = str) = f2
+
+  val t6 = test6
+  t6: String
+}