diff --git a/pkgs/racket-pkgs/racket-doc/scribblings/reference/stx-trans.scrbl b/pkgs/racket-pkgs/racket-doc/scribblings/reference/stx-trans.scrbl
index ab0122e652..e20862a2d7 100644
--- a/pkgs/racket-pkgs/racket-doc/scribblings/reference/stx-trans.scrbl
+++ b/pkgs/racket-pkgs/racket-doc/scribblings/reference/stx-trans.scrbl
@@ -313,13 +313,14 @@ avoids quadratic expansion times when local expansions are nested.
 
 
 @defproc[(local-transformer-expand [stx syntax?]
-                       [context-v (or/c 'expression 'top-level 'module 'module-begin list?)]
+                       [context-v (or/c 'expression 'top-level list?)]
                        [stop-ids (or/c (listof identifier?) #f)]
                        [intdef-ctx (or/c internal-definition-context? #f) #f])
          syntax?]{
 
 Like @racket[local-expand], but @racket[stx] is expanded as a
-transformer expression instead of a run-time expression, and any
+transformer expression instead of a run-time expression.
+For @racket['expression] expansion, any
 lifted expressions---from calls to
 @racket[syntax-local-lift-expression] during the expansion of
 @racket[stx]---are captured into a @racket[let-values] form in the
@@ -345,7 +346,7 @@ expressions are not expanded, but instead left as provided in the
 
 
 @defproc[(local-transformer-expand/capture-lifts [stx syntax?]
-                       [context-v (or/c 'expression 'top-level 'module 'module-begin list?)]
+                       [context-v (or/c 'expression 'top-level list?)]
                        [stop-ids (or/c (listof identifier?) #f)]
                        [intdef-ctx (or/c internal-definition-context? #f) #f]
                        [lift-ctx any/c (gensym 'lifts)])
diff --git a/pkgs/racket-pkgs/racket-test/tests/racket/macro.rktl b/pkgs/racket-pkgs/racket-test/tests/racket/macro.rktl
index 6b4c5a6b88..2795305a2d 100644
--- a/pkgs/racket-pkgs/racket-test/tests/racket/macro.rktl
+++ b/pkgs/racket-pkgs/racket-test/tests/racket/macro.rktl
@@ -591,6 +591,53 @@
       (syntax-local-bind-syntaxes (list 'q) #'1 context)))
   (test 'ok 'ok (foo)))
 
+;; ----------------------------------------
+
+(test '(+ 1 2)
+      'local-transformer-expand/expr
+      (let-syntax ([m (lambda (stx)
+                        (define e (local-transformer-expand #'(+ 1 2) 'expression (list #'#%app)))
+                        #`(quote #,e))])
+        (m)))
+
+(test '(define-values (x) '3)
+      'local-transformer-expand/top-level
+      (let-syntax ([m (lambda (stx)
+                        (define e (local-transformer-expand #'(define x 3) 'top-level null))
+                        #`(quote #,e))])
+        (m)))
+
+(module check-transformer-lift racket/base
+  (require (for-syntax racket/base
+                       (for-syntax racket/base)))
+  (provide e d)
+  (begin-for-syntax
+   (define-syntax (n stx)
+     (syntax-local-lift-expression #'5)
+     #'ok))
+  (define e
+    (let-syntax ([m (lambda (stx)
+                      (define e (local-transformer-expand #'(n) 'expression (list #'#%app)))
+                      #`(quote #,e))])
+      (m)))
+  (define d
+    (let-syntax ([m (lambda (stx)
+                      (define e (local-transformer-expand/capture-lifts #'(n) 'top-level (list #'#%app)))
+                      #`(quote #,e))])
+      (m))))
+
+(require syntax/datum)
+(test #t
+      'local-transformer-expand/lift
+      (datum-case (dynamic-require ''check-transformer-lift 'e) (let-values ok)
+        [(let-values (((lifted) 5)) ok) #t]
+        [x (datum x)]))
+(test #t
+      'local-transformer-expand/lift
+      (datum-case (dynamic-require ''check-transformer-lift 'd) (begin define-values ok)
+        [(begin (define-values (lifted) 5) ok) #t]
+        [x (datum x)]))
+
 ;; ----------------------------------------
 ;; Check `#%variable-reference' expansion to make sure
 ;;  a lexically bound identifier is made consistent with
diff --git a/racket/src/racket/src/eval.c b/racket/src/racket/src/eval.c
index 0eadce761f..653d601f30 100644
--- a/racket/src/racket/src/eval.c
+++ b/racket/src/racket/src/eval.c
@@ -4799,19 +4799,22 @@ do_local_expand(const char *name, int for_stx, int catch_lifts, int for_expr, in
 
   if (for_expr)
     kind = 0; /* expression */
-  else if (SAME_OBJ(argv[1], module_symbol))
+  else if (!for_stx && SAME_OBJ(argv[1], module_symbol))
     kind = SCHEME_MODULE_BEGIN_FRAME; /* name is backwards compared to symbol! */
-  else if (SAME_OBJ(argv[1], module_begin_symbol))
+  else if (!for_stx && SAME_OBJ(argv[1], module_begin_symbol))
     kind = SCHEME_MODULE_FRAME; /* name is backwards compared to symbol! */
-  else if (SAME_OBJ(argv[1], top_level_symbol))
+  else if (SAME_OBJ(argv[1], top_level_symbol)) {
     kind = SCHEME_TOPLEVEL_FRAME;
-  else if (SAME_OBJ(argv[1], expression_symbol))
+    if (catch_lifts < 0) catch_lifts = 0;
+  } else if (SAME_OBJ(argv[1], expression_symbol))
     kind = 0;
   else if (scheme_proper_list_length(argv[1]) > 0)
     kind = SCHEME_INTDEF_FRAME;
   else  {
     scheme_wrong_contract(name,
-                          "(or/c 'expression 'module 'module-begin 'top-level (and/c pair? list?))",
+                          (for_stx
+                           ? "(or/c 'expression 'top-level (and/c pair? list?))"
+                           : "(or/c 'expression 'module 'module-begin 'top-level (and/c pair? list?))"),
                           1, argc, argv);
     return NULL;
   }