diff --git a/pkgs/typed-racket-pkgs/typed-racket-lib/typed-racket/private/with-types.rkt b/pkgs/typed-racket-pkgs/typed-racket-lib/typed-racket/private/with-types.rkt
index 05d54308..9b94bec6 100644
--- a/pkgs/typed-racket-pkgs/typed-racket-lib/typed-racket/private/with-types.rkt
+++ b/pkgs/typed-racket-pkgs/typed-racket-lib/typed-racket/private/with-types.rkt
@@ -1,6 +1,9 @@
 #lang racket/base
 
-(require racket/require racket/promise
+(require "../utils/utils.rkt"
+         (utils lift)
+         (typecheck tc-toplevel)
+         racket/require racket/promise
          (for-template
           (except-in racket/base for for* with-handlers lambda λ define
                      let let* letrec letrec-values let-values
@@ -68,15 +71,14 @@
   (for ([i (in-syntax fvids)]
         [ty (in-list fv-types)])
     (register-type i ty))
-  (define expanded-body
-    (disarm*
-      (if expr?
-          (with-syntax ([body body])
-            (local-expand #'(let () . body) ctx null))
-          (with-syntax ([(body ...) body]
-                        [(id ...) exids]
-                        [(ty ...) extys])
-            (local-expand #'(let () (begin (: id ty) ... body ... (values id ...))) ctx null)))))
+  (define-values (lifted-definitions expanded-body)
+    (if expr?
+        (with-syntax ([body body])
+          (wt-expand #'(let () . body) ctx))
+        (with-syntax ([(body ...) body]
+                      [(id ...) exids]
+                      [(ty ...) extys])
+          (wt-expand #'(let () (begin (: id ty) ... body ... (values id ...))) ctx))))
   (parameterize (;; do we report multiple errors
                  [delay-errors? #t]
                  ;; this parameter is just for printing types
@@ -94,6 +96,10 @@
                  ;; for error reporting
                  [orig-module-stx stx]
                  [expanded-module-stx expanded-body])
+    ;; we can treat the lifted definitions as top-level forms because they
+    ;; are only definitions and not forms that have special top-level meaning
+    ;; to TR
+    (tc-toplevel-form lifted-definitions)
     (tc-expr/check expanded-body (if expr? region-tc-result (ret ex-types))))
   (report-all-errors)
   (set-box! typed-context? old-context)
@@ -118,14 +124,25 @@
                    (c:with-contract typed-region
                                     #:results (region-cnt ...)
                                     #:freevars ([fv.id cnt] ...)
+                                    #,lifted-definitions
                                     body)))
-          (syntax/loc stx
+          (quasisyntax/loc stx
             (begin
               (define-values () (begin check-syntax-help (values)))
               (c:with-contract typed-region
                                ([ex-id ex-cnt] ...)
+                               #,lifted-definitions
                                (define-values (ex-id ...) body))))))))
 
+;; Syntax (U Symbol List) -> (values Syntax Syntax)
+;; local expansion for with-type expressions
+(define (wt-expand stx ctx)
+  (syntax-parse (local-expand/capture* stx ctx null)
+    #:literal-sets (kernel-literals)
+    [(begin (define-values (x ...) e ...) ... (let-values () . body))
+     (values (disarm* #'(begin (define-values (x ...) e ...) ...))
+             (disarm* (local-expand/capture* #'(let-values () . body) ctx null)))]))
+
 (define (wt-core stx)
   (define-syntax-class typed-id
     #:description "[id type]"
diff --git a/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/succeed/with-type-lift.rkt b/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/succeed/with-type-lift.rkt
new file mode 100644
index 00000000..8f2d2c3a
--- /dev/null
+++ b/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/succeed/with-type-lift.rkt
@@ -0,0 +1,18 @@
+#lang racket/base
+
+;; Test syntax lifting in `with-type`
+
+(require rackunit typed/racket)
+
+(with-type #:result Number
+  (define-syntax (m stx)
+    (syntax-local-lift-expression #'(+ 1 2)))
+  (m))
+
+(define-syntax (m2 stx)
+  (syntax-local-lift-expression #'(+ 1 2)))
+
+(with-type #:result Number (m2))
+
+(with-type ([val Number]) (define val (m2)))
+(check-equal? val 3)