diff --git a/spec-dtslint/observables/defer-spec.ts b/spec-dtslint/observables/defer-spec.ts
index cc0c2f1092..42aa3a672b 100644
--- a/spec-dtslint/observables/defer-spec.ts
+++ b/spec-dtslint/observables/defer-spec.ts
@@ -18,4 +18,12 @@ it('should support union type returns', () => {
 
 it('should infer correctly with void functions', () => {
   const a = defer(() => {}); // $ExpectType Observable<never>
-});
\ No newline at end of file
+});
+
+it('should error if an ObservableInput is not returned', () => {
+  const a = defer(() => 42); // $ExpectError
+});
+
+it('should infer correctly with functions that sometimes do not return an ObservableInput', () => {
+  const a = defer(() => { if (Math.random() < 0.5) { return of(42); } }); // $ExpectType Observable<number>
+});
diff --git a/src/internal/observable/defer.ts b/src/internal/observable/defer.ts
index e592536935..df6c7aa604 100644
--- a/src/internal/observable/defer.ts
+++ b/src/internal/observable/defer.ts
@@ -52,18 +52,16 @@ import { empty } from './empty';
  * @name defer
  * @owner Observable
  */
-export function defer<O extends ObservableInput<any>>(observableFactory: () => O): Observable<ObservedValueOf<O>>;
-export function defer(observableFactory: () => void): Observable<never>;
-export function defer<O extends ObservableInput<any>>(observableFactory: () => O | void): Observable<ObservedValueOf<O>> {
-  return new Observable<ObservedValueOf<O>>(subscriber => {
-    let input: O | void;
+export function defer<R extends ObservableInput<any> | void>(observableFactory: () => R): Observable<ObservedValueOf<R>> {
+  return new Observable<ObservedValueOf<R>>(subscriber => {
+    let input: R | void;
     try {
       input = observableFactory();
     } catch (err) {
       subscriber.error(err);
       return undefined;
     }
-    const source = input ? from(input) : empty();
+    const source = input ? from(input as ObservableInput<ObservedValueOf<R>>) : empty();
     return source.subscribe(subscriber);
   });
 }