diff --git a/Analysis/include/Luau/TypeInfer.h b/Analysis/include/Luau/TypeInfer.h
index 90dc9f42..f61ecbf5 100644
--- a/Analysis/include/Luau/TypeInfer.h
+++ b/Analysis/include/Luau/TypeInfer.h
@@ -346,7 +346,8 @@ private:
 
     // Note: `scope` must be a fresh scope.
     GenericTypeDefinitions createGenericTypes(const ScopePtr& scope, std::optional<TypeLevel> levelOpt, const AstNode& node,
-        const AstArray<AstGenericType>& genericNames, const AstArray<AstGenericTypePack>& genericPackNames);
+        const AstArray<AstGenericType>& genericNames, const AstArray<AstGenericTypePack>& genericPackNames,
+        bool useCache = false);
 
 public:
     ErrorVec resolve(const PredicateVec& predicates, const ScopePtr& scope, bool sense);
diff --git a/Analysis/src/TypeInfer.cpp b/Analysis/src/TypeInfer.cpp
index b9096d2e..99398f74 100644
--- a/Analysis/src/TypeInfer.cpp
+++ b/Analysis/src/TypeInfer.cpp
@@ -29,6 +29,7 @@ LUAU_FASTFLAGVARIABLE(LuauWeakEqConstraint, false) // Eventually removed as fals
 LUAU_FASTFLAG(LuauUseCommittingTxnLog)
 LUAU_FASTFLAGVARIABLE(DebugLuauFreezeDuringUnification, false)
 LUAU_FASTFLAGVARIABLE(LuauRecursiveTypeParameterRestriction, false)
+LUAU_FASTFLAGVARIABLE(LuauGenericFunctionsDontCacheTypeParams, false)
 LUAU_FASTFLAGVARIABLE(LuauIfElseBranchTypeUnion, false)
 LUAU_FASTFLAGVARIABLE(LuauIfElseExpectedType2, false)
 LUAU_FASTFLAGVARIABLE(LuauLengthOnCompositeType, false)
@@ -1199,7 +1200,7 @@ void TypeChecker::check(const ScopePtr& scope, const AstStatTypeAlias& typealias
             if (FFlag::LuauProperTypeLevels)
                 aliasScope->level.subLevel = subLevel;
 
-            auto [generics, genericPacks] = createGenericTypes(aliasScope, scope->level, typealias, typealias.generics, typealias.genericPacks);
+            auto [generics, genericPacks] = createGenericTypes(aliasScope, scope->level, typealias, typealias.generics, typealias.genericPacks, /* useCache = */ true);
 
             TypeId ty = freshType(aliasScope);
             FreeTypeVar* ftv = getMutable<FreeTypeVar>(ty);
@@ -5362,7 +5363,7 @@ TypeId TypeChecker::instantiateTypeFun(const ScopePtr& scope, const TypeFun& tf,
 }
 
 GenericTypeDefinitions TypeChecker::createGenericTypes(const ScopePtr& scope, std::optional<TypeLevel> levelOpt, const AstNode& node,
-    const AstArray<AstGenericType>& genericNames, const AstArray<AstGenericTypePack>& genericPackNames)
+    const AstArray<AstGenericType>& genericNames, const AstArray<AstGenericTypePack>& genericPackNames, bool useCache)
 {
     LUAU_ASSERT(scope->parent);
 
@@ -5388,7 +5389,7 @@ GenericTypeDefinitions TypeChecker::createGenericTypes(const ScopePtr& scope, st
         }
 
         TypeId g;
-        if (FFlag::LuauRecursiveTypeParameterRestriction)
+        if (FFlag::LuauRecursiveTypeParameterRestriction && (!FFlag::LuauGenericFunctionsDontCacheTypeParams || useCache))
         {
             TypeId& cached = scope->parent->typeAliasTypeParameters[n];
             if (!cached)
diff --git a/tests/TypeInfer.generics.test.cpp b/tests/TypeInfer.generics.test.cpp
index a7f27551..8a2c6f27 100644
--- a/tests/TypeInfer.generics.test.cpp
+++ b/tests/TypeInfer.generics.test.cpp
@@ -673,4 +673,29 @@ local d: D = c
         R"(Type '() -> ()' could not be converted into '<T...>() -> ()'; different number of generic type pack parameters)");
 }
 
+TEST_CASE_FIXTURE(Fixture, "generic_functions_dont_cache_type_parameters")
+{
+    ScopedFastFlag sff{"LuauGenericFunctionsDontCacheTypeParams", true};
+
+    CheckResult result = check(R"(
+-- See https://github.com/Roblox/luau/issues/332
+-- This function has a type parameter with the same name as clones,
+-- so if we cache type parameter names for functions these get confused.
+-- function id<Z>(x : Z) : Z
+function id<X>(x : X) : X
+  return x
+end
+
+function clone<X, Y>(dict: {[X]:Y}): {[X]:Y}
+  local copy = {}
+  for k, v in pairs(dict) do
+    copy[k] = v
+  end
+  return copy
+end
+    )");
+
+    LUAU_REQUIRE_NO_ERRORS(result);
+}
+
 TEST_SUITE_END();