diff --git a/compiler/semtempl.nim b/compiler/semtempl.nim
index a72143bdd7..85411f7c46 100644
--- a/compiler/semtempl.nim
+++ b/compiler/semtempl.nim
@@ -674,6 +674,9 @@ proc semTemplateDef(c: PContext, n: PNode): PNode =
     # a template's parameters are not gensym'ed even if that was originally the
     # case as we determine whether it's a template parameter in the template
     # body by the absence of the sfGenSym flag:
+    let retType = s.typ[0]
+    if retType != nil and retType.kind != tyUntyped:
+      allUntyped = false
     for i in 1..<s.typ.n.len:
       let param = s.typ.n[i].sym
       if param.name.id != ord(wUnderscore):
diff --git a/tests/template/t21532.nim b/tests/template/t21532.nim
new file mode 100644
index 0000000000..3193b0dc35
--- /dev/null
+++ b/tests/template/t21532.nim
@@ -0,0 +1,8 @@
+
+template elementType(a: untyped): typedesc =
+  typeof(block: (for ai in a: ai))
+
+func fn[T](a: T) =
+  doAssert elementType(a) is int
+
+@[1,2,3].fn
\ No newline at end of file