diff --git a/typed-racket-lib/typed-racket/optimizer/unboxed-let.rkt b/typed-racket-lib/typed-racket/optimizer/unboxed-let.rkt
index 88f2775d..3663cd74 100644
--- a/typed-racket-lib/typed-racket/optimizer/unboxed-let.rkt
+++ b/typed-racket-lib/typed-racket/optimizer/unboxed-let.rkt
@@ -188,6 +188,9 @@
 
   (define (rec exp)
     (syntax-parse exp
+      ;; if there are unreachable expressions in the body, we can't check
+      ;; if it's worth unboxing, so just give up
+      [_:ignore-table^ #f]
       ;; can be used in a complex arithmetic expr, can be a direct child
       [(~and (~not :id) exp:float-complex-arith-expr)
        (or (direct-child-of? v #'exp)
diff --git a/typed-racket-lib/typed-racket/typecheck/tc-let-unit.rkt b/typed-racket-lib/typed-racket/typecheck/tc-let-unit.rkt
index 801e96ee..aebf1754 100644
--- a/typed-racket-lib/typed-racket/typecheck/tc-let-unit.rkt
+++ b/typed-racket-lib/typed-racket/typecheck/tc-let-unit.rkt
@@ -1,7 +1,8 @@
 #lang racket/unit
 
 (require "../utils/utils.rkt"
-         (except-in (types utils abbrev filter-ops remove-intersect) -> ->* one-of/c)
+         (except-in (types utils abbrev filter-ops remove-intersect type-table)
+                    -> ->* one-of/c)
          (only-in (types abbrev) (-> t:->) [->* t:->*])
          (private type-annotation parse-type syntax-properties)
          (env lexical-env type-alias-helper mvar-env
@@ -85,6 +86,9 @@
       (get-names+objects namess expected-results)
       (with-lexical-env/extend-props
         (apply append props)
+        ;; if a let rhs does not return, the body isn't checked
+        #:unreachable (for ([form (in-list (syntax->list body))])
+                        (register-ignored! form))
         ;; type-check the rhs exprs
         (for ([expr (in-list exprs)] [results (in-list expected-results)])
           (match results
diff --git a/typed-racket-test/fail/gh-issue-165.rkt b/typed-racket-test/fail/gh-issue-165.rkt
new file mode 100644
index 00000000..f2223860
--- /dev/null
+++ b/typed-racket-test/fail/gh-issue-165.rkt
@@ -0,0 +1,17 @@
+#;
+(exn-pred #rx"match-define")
+#lang typed/racket
+
+(struct a ([x : Integer]))
+(struct b ([y : Integer]))
+
+;; test for original report
+(: f (-> a Integer))
+(define (f arg)
+  (match-define (a (b y)) arg)
+  (+ 1 y))
+
+;; simple test case
+(let ()
+  (match-define (? string? x) 3)
+  (+ 1 2))