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 8d898d2e..33ada5de 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
@@ -89,11 +89,13 @@
     ;; 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)
   ;; then clear the new entries from the env ht
   (for ([i (in-syntax fvids)])
     (unregister-type i))
+  ;; report errors after setting the typed-context? flag and unregistering
+  ;; types to ensure that the state is cleaned up properly in the REPL
+  (report-all-errors)
   (with-syntax ([(fv.id ...) fvids]
                 [(cnt ...) fv-ctc-ids]
                 [(ex-id ...) exids]
diff --git a/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/fail/with-type-unregister.rkt b/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/fail/with-type-unregister.rkt
new file mode 100644
index 00000000..a65a7077
--- /dev/null
+++ b/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/fail/with-type-unregister.rkt
@@ -0,0 +1,18 @@
+#;
+(exn-pred #rx"missing a type annotation")
+#lang racket/load
+
+(require (only-in typed/racket with-type String)
+         unstable/macro-testing)
+
+;; Ensure that types are unregistered in the type environment for free
+;; variables for a `with-type` at the top-level
+
+(define x "foo")
+
+(with-handlers ([exn:fail:syntax? void])
+  (convert-compile-time-error
+   (with-type #:result String #:freevars ([x String]) (string-append x 3))))
+
+;; should error because `x` shouldn't have a type
+(with-type #:result String (string-append x "bar"))
diff --git a/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/succeed/with-type-typed-context-flag.rkt b/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/succeed/with-type-typed-context-flag.rkt
new file mode 100644
index 00000000..1c3d3e48
--- /dev/null
+++ b/pkgs/typed-racket-pkgs/typed-racket-test/tests/typed-racket/succeed/with-type-typed-context-flag.rkt
@@ -0,0 +1,14 @@
+#lang racket/load
+
+(require (only-in typed/racket with-type)
+         unstable/macro-testing)
+
+;; Test that the typed-context? flag is properly reset
+
+(with-handlers ([exn:fail:syntax? void])
+  (convert-compile-time-error
+   (with-type [] (+ 1 "foo"))))
+
+;; this should succeed instead of an error due to the typed-context?
+;; flag being set to #t
+(with-type [] (+ 1 3))