diff --git a/typed-racket-lib/typed-racket/base-env/base-special-env.rkt b/typed-racket-lib/typed-racket/base-env/base-special-env.rkt
index fbcfffc3..8f0d94a0 100644
--- a/typed-racket-lib/typed-racket/base-env/base-special-env.rkt
+++ b/typed-racket-lib/typed-racket/base-env/base-special-env.rkt
@@ -144,7 +144,7 @@
    (->opt [-Input-Port -Symbol] (-seq -Bytes))]
   ;; in-directory
   [(make-template-identifier '*in-directory 'racket/private/for)
-   (->opt [(Un (-val #f) -Pathlike)] (-seq -Path))]
+   (->opt [(Un (-val #f) -Pathlike) (-> -Path Univ)] (-seq -Path))]
   ;; in-producer
   [(make-template-identifier 'in-producer 'racket/private/for)
    (-polydots (a b)
diff --git a/typed-racket-test/unit-tests/special-env-typecheck-tests.rkt b/typed-racket-test/unit-tests/special-env-typecheck-tests.rkt
index 5de1ce79..7c3b7b55 100644
--- a/typed-racket-test/unit-tests/special-env-typecheck-tests.rkt
+++ b/typed-racket-test/unit-tests/special-env-typecheck-tests.rkt
@@ -128,6 +128,7 @@
 
    ;; more sequences
    [tc-e (sequence-ref (in-directory) 0) -Path]
+   [tc-e (sequence-ref (in-directory "foo" (λ (p) #t)) 0) -Path]
    [tc-e (in-mlist (ann (mcons 'a null) (MListof 'a))) (-seq (-val 'a))]
    [tc-e (in-producer (λ () 'hi)) (-seq (-val 'hi))]
    [tc-e (in-producer (λ: ([x : String]) 'hi) symbol? "foo")