diff --git a/docs/source/conf.py b/docs/source/conf.py
index fa76734054ac..5934c7474536 100644
--- a/docs/source/conf.py
+++ b/docs/source/conf.py
@@ -92,7 +92,7 @@
 # show_authors = False
 
 # The name of the Pygments (syntax highlighting) style to use.
-pygments_style = "sphinx"
+# pygments_style = "sphinx"
 
 # A list of ignored prefixes for module index sorting.
 # modindex_common_prefix = []
diff --git a/mypy/checker.py b/mypy/checker.py
index 0ae499916ec6..59de599006a8 100644
--- a/mypy/checker.py
+++ b/mypy/checker.py
@@ -6011,11 +6011,16 @@ def has_no_custom_eq_checks(t: Type) -> bool:
                     if_map, else_map = {}, {}
 
                     if left_index in narrowable_operand_index_to_hash:
-                        # We only try and narrow away 'None' for now
-                        if is_overlapping_none(item_type):
-                            collection_item_type = get_proper_type(
-                                builtin_item_type(iterable_type)
-                            )
+                        collection_item_type = get_proper_type(builtin_item_type(iterable_type))
+                        # Narrow if the collection is a subtype
+                        if (
+                            collection_item_type is not None
+                            and collection_item_type != item_type
+                            and is_subtype(collection_item_type, item_type)
+                        ):
+                            if_map[operands[left_index]] = collection_item_type
+                        # Try and narrow away 'None'
+                        elif is_overlapping_none(item_type):
                             if (
                                 collection_item_type is not None
                                 and not is_overlapping_none(collection_item_type)
diff --git a/mypy/fastparse.py b/mypy/fastparse.py
index 75c4bd46550c..363fc8375259 100644
--- a/mypy/fastparse.py
+++ b/mypy/fastparse.py
@@ -181,10 +181,12 @@ def ast3_parse(
 if sys.version_info >= (3, 12):
     ast_TypeAlias = ast3.TypeAlias
     ast_ParamSpec = ast3.ParamSpec
+    ast_TypeVar = ast3.TypeVar
     ast_TypeVarTuple = ast3.TypeVarTuple
 else:
     ast_TypeAlias = Any
     ast_ParamSpec = Any
+    ast_TypeVar = Any
     ast_TypeVarTuple = Any
 
 N = TypeVar("N", bound=Node)
@@ -345,6 +347,15 @@ def is_no_type_check_decorator(expr: ast3.expr) -> bool:
     return False
 
 
+def find_disallowed_expression_in_annotation_scope(expr: ast3.expr | None) -> ast3.expr | None:
+    if expr is None:
+        return None
+    for node in ast3.walk(expr):
+        if isinstance(node, (ast3.Yield, ast3.YieldFrom, ast3.NamedExpr, ast3.Await)):
+            return node
+    return None
+
+
 class ASTConverter:
     def __init__(
         self,
@@ -1180,6 +1191,29 @@ def visit_ClassDef(self, n: ast3.ClassDef) -> ClassDef:
         self.class_and_function_stack.pop()
         return cdef
 
+    def validate_type_param(self, type_param: ast_TypeVar) -> None:
+        incorrect_expr = find_disallowed_expression_in_annotation_scope(type_param.bound)
+        if incorrect_expr is None:
+            return
+        if isinstance(incorrect_expr, (ast3.Yield, ast3.YieldFrom)):
+            self.fail(
+                message_registry.TYPE_VAR_YIELD_EXPRESSION_IN_BOUND,
+                type_param.lineno,
+                type_param.col_offset,
+            )
+        if isinstance(incorrect_expr, ast3.NamedExpr):
+            self.fail(
+                message_registry.TYPE_VAR_NAMED_EXPRESSION_IN_BOUND,
+                type_param.lineno,
+                type_param.col_offset,
+            )
+        if isinstance(incorrect_expr, ast3.Await):
+            self.fail(
+                message_registry.TYPE_VAR_AWAIT_EXPRESSION_IN_BOUND,
+                type_param.lineno,
+                type_param.col_offset,
+            )
+
     def translate_type_params(self, type_params: list[Any]) -> list[TypeParam]:
         explicit_type_params = []
         for p in type_params:
@@ -1202,6 +1236,7 @@ def translate_type_params(self, type_params: list[Any]) -> list[TypeParam]:
                         conv = TypeConverter(self.errors, line=p.lineno)
                         values = [conv.visit(t) for t in p.bound.elts]
                 elif p.bound is not None:
+                    self.validate_type_param(p)
                     bound = TypeConverter(self.errors, line=p.lineno).visit(p.bound)
                 explicit_type_params.append(TypeParam(p.name, TYPE_VAR_KIND, bound, values))
         return explicit_type_params
@@ -1791,11 +1826,23 @@ def visit_MatchOr(self, n: MatchOr) -> OrPattern:
         node = OrPattern([self.visit(pattern) for pattern in n.patterns])
         return self.set_line(node, n)
 
+    def validate_type_alias(self, n: ast_TypeAlias) -> None:
+        incorrect_expr = find_disallowed_expression_in_annotation_scope(n.value)
+        if incorrect_expr is None:
+            return
+        if isinstance(incorrect_expr, (ast3.Yield, ast3.YieldFrom)):
+            self.fail(message_registry.TYPE_ALIAS_WITH_YIELD_EXPRESSION, n.lineno, n.col_offset)
+        if isinstance(incorrect_expr, ast3.NamedExpr):
+            self.fail(message_registry.TYPE_ALIAS_WITH_NAMED_EXPRESSION, n.lineno, n.col_offset)
+        if isinstance(incorrect_expr, ast3.Await):
+            self.fail(message_registry.TYPE_ALIAS_WITH_AWAIT_EXPRESSION, n.lineno, n.col_offset)
+
     # TypeAlias(identifier name, type_param* type_params, expr value)
     def visit_TypeAlias(self, n: ast_TypeAlias) -> TypeAliasStmt | AssignmentStmt:
         node: TypeAliasStmt | AssignmentStmt
         if NEW_GENERIC_SYNTAX in self.options.enable_incomplete_feature:
             type_params = self.translate_type_params(n.type_params)
+            self.validate_type_alias(n)
             value = self.visit(n.value)
             # Since the value is evaluated lazily, wrap the value inside a lambda.
             # This helps mypyc.
diff --git a/mypy/message_registry.py b/mypy/message_registry.py
index 06199e70d6b4..29d539faaed6 100644
--- a/mypy/message_registry.py
+++ b/mypy/message_registry.py
@@ -338,3 +338,27 @@ def with_additional_msg(self, info: str) -> ErrorMessage:
 TYPE_VAR_TOO_FEW_CONSTRAINED_TYPES: Final = ErrorMessage(
     "Type variable must have at least two constrained types", codes.MISC
 )
+
+TYPE_VAR_YIELD_EXPRESSION_IN_BOUND: Final = ErrorMessage(
+    "Yield expression cannot be used as a type variable bound", codes.SYNTAX
+)
+
+TYPE_VAR_NAMED_EXPRESSION_IN_BOUND: Final = ErrorMessage(
+    "Named expression cannot be used as a type variable bound", codes.SYNTAX
+)
+
+TYPE_VAR_AWAIT_EXPRESSION_IN_BOUND: Final = ErrorMessage(
+    "Await expression cannot be used as a type variable bound", codes.SYNTAX
+)
+
+TYPE_ALIAS_WITH_YIELD_EXPRESSION: Final = ErrorMessage(
+    "Yield expression cannot be used within a type alias", codes.SYNTAX
+)
+
+TYPE_ALIAS_WITH_NAMED_EXPRESSION: Final = ErrorMessage(
+    "Named expression cannot be used within a type alias", codes.SYNTAX
+)
+
+TYPE_ALIAS_WITH_AWAIT_EXPRESSION: Final = ErrorMessage(
+    "Await expression cannot be used within a type alias", codes.SYNTAX
+)
diff --git a/mypy/plugin.py b/mypy/plugin.py
index 858795addb7f..a1af7fa76350 100644
--- a/mypy/plugin.py
+++ b/mypy/plugin.py
@@ -240,7 +240,7 @@ def type_context(self) -> list[Type | None]:
 
     @abstractmethod
     def fail(
-        self, msg: str | ErrorMessage, ctx: Context, *, code: ErrorCode | None = None
+        self, msg: str | ErrorMessage, ctx: Context, /, *, code: ErrorCode | None = None
     ) -> None:
         """Emit an error message at given location."""
         raise NotImplementedError
diff --git a/mypy/types.py b/mypy/types.py
index 91b40536f1cf..52b3121f9fb3 100644
--- a/mypy/types.py
+++ b/mypy/types.py
@@ -2900,12 +2900,19 @@ def relevant_items(self) -> list[Type]:
             return [i for i in self.items if not isinstance(get_proper_type(i), NoneType)]
 
     def serialize(self) -> JsonDict:
-        return {".class": "UnionType", "items": [t.serialize() for t in self.items]}
+        return {
+            ".class": "UnionType",
+            "items": [t.serialize() for t in self.items],
+            "uses_pep604_syntax": self.uses_pep604_syntax,
+        }
 
     @classmethod
     def deserialize(cls, data: JsonDict) -> UnionType:
         assert data[".class"] == "UnionType"
-        return UnionType([deserialize_type(t) for t in data["items"]])
+        return UnionType(
+            [deserialize_type(t) for t in data["items"]],
+            uses_pep604_syntax=data["uses_pep604_syntax"],
+        )
 
 
 class PartialType(ProperType):
diff --git a/test-data/unit/check-incremental.test b/test-data/unit/check-incremental.test
index 24292bce3e21..173265e48e6f 100644
--- a/test-data/unit/check-incremental.test
+++ b/test-data/unit/check-incremental.test
@@ -6726,3 +6726,20 @@ from typing_extensions import TypeIs
 def guard(x: object) -> TypeIs[int]:
     pass
 [builtins fixtures/tuple.pyi]
+
+[case testStartUsingPEP604Union]
+# flags: --python-version 3.10
+import a
+[file a.py]
+import lib
+
+[file a.py.2]
+from lib import IntOrStr
+assert isinstance(1, IntOrStr)
+
+[file lib.py]
+from typing_extensions import TypeAlias
+
+IntOrStr: TypeAlias = int | str
+assert isinstance(1, IntOrStr)
+[builtins fixtures/type.pyi]
diff --git a/test-data/unit/check-narrowing.test b/test-data/unit/check-narrowing.test
index 8612df9bc663..e142fdd5d060 100644
--- a/test-data/unit/check-narrowing.test
+++ b/test-data/unit/check-narrowing.test
@@ -1376,13 +1376,13 @@ else:
     reveal_type(val)  # N: Revealed type is "Union[__main__.A, None]"
 
 if val in (None,):
-    reveal_type(val)  # N: Revealed type is "Union[__main__.A, None]"
+    reveal_type(val)  # N: Revealed type is "None"
 else:
     reveal_type(val)  # N: Revealed type is "Union[__main__.A, None]"
 if val not in (None,):
     reveal_type(val)  # N: Revealed type is "Union[__main__.A, None]"
 else:
-    reveal_type(val)  # N: Revealed type is "Union[__main__.A, None]"
+    reveal_type(val)  # N: Revealed type is "None"
 [builtins fixtures/primitives.pyi]
 
 [case testNarrowingWithTupleOfTypes]
@@ -2114,3 +2114,111 @@ else:
 
 [typing fixtures/typing-medium.pyi]
 [builtins fixtures/ops.pyi]
+
+
+[case testTypeNarrowingStringInLiteralUnion]
+from typing import Literal, Tuple
+typ: Tuple[Literal['a', 'b'], ...] = ('a', 'b')
+x: str = "hi!"
+if x in typ:
+    reveal_type(x)  # N: Revealed type is "Union[Literal['a'], Literal['b']]"
+else:
+    reveal_type(x)  # N: Revealed type is "builtins.str"
+[builtins fixtures/tuple.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testTypeNarrowingStringInLiteralUnionSubset]
+from typing import Literal, Tuple
+typeAlpha: Tuple[Literal['a', 'b', 'c'], ...] = ('a', 'b')
+strIn: str = "b"
+strOut: str = "c"
+if strIn in typeAlpha:
+    reveal_type(strIn)  # N: Revealed type is "Union[Literal['a'], Literal['b'], Literal['c']]"
+else:
+    reveal_type(strIn)  # N: Revealed type is "builtins.str"
+if strOut in typeAlpha:
+    reveal_type(strOut)  # N: Revealed type is "Union[Literal['a'], Literal['b'], Literal['c']]"
+else:
+    reveal_type(strOut)  # N: Revealed type is "builtins.str"
+[builtins fixtures/primitives.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testNarrowingStringNotInLiteralUnion]
+from typing import Literal, Tuple
+typeAlpha: Tuple[Literal['a', 'b', 'c'],...] = ('a', 'b', 'c')
+strIn: str = "c"
+strOut: str = "d"
+if strIn not in typeAlpha:
+    reveal_type(strIn)  # N: Revealed type is "builtins.str"
+else:
+    reveal_type(strIn)  # N: Revealed type is "Union[Literal['a'], Literal['b'], Literal['c']]"
+if strOut in typeAlpha:
+    reveal_type(strOut)  # N: Revealed type is "Union[Literal['a'], Literal['b'], Literal['c']]"
+else:
+    reveal_type(strOut)  # N: Revealed type is "builtins.str"
+[builtins fixtures/primitives.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testNarrowingStringInLiteralUnionDontExpand]
+from typing import Literal, Tuple
+typeAlpha: Tuple[Literal['a', 'b', 'c'], ...] = ('a', 'b', 'c')
+strIn: Literal['c'] = "c"
+reveal_type(strIn)  # N: Revealed type is "Literal['c']"
+#Check we don't expand a Literal into the Union type
+if strIn not in typeAlpha:
+    reveal_type(strIn)  # N: Revealed type is "Literal['c']"
+else:
+    reveal_type(strIn)  # N: Revealed type is "Literal['c']"
+[builtins fixtures/primitives.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testTypeNarrowingStringInMixedUnion]
+from typing import Literal, Tuple
+typ: Tuple[Literal['a', 'b'], ...] = ('a', 'b')
+x: str = "hi!"
+if x in typ:
+    reveal_type(x)  # N: Revealed type is "Union[Literal['a'], Literal['b']]"
+else:
+    reveal_type(x)  # N: Revealed type is "builtins.str"
+[builtins fixtures/tuple.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testTypeNarrowingStringInSet]
+from typing import Literal, Set
+typ: Set[Literal['a', 'b']] = {'a', 'b'}
+x: str = "hi!"
+if x in typ:
+    reveal_type(x)  # N: Revealed type is "Union[Literal['a'], Literal['b']]"
+else:
+    reveal_type(x)  # N: Revealed type is "builtins.str"
+if x not in typ:
+    reveal_type(x)  # N: Revealed type is "builtins.str"
+else:
+    reveal_type(x)  # N: Revealed type is "Union[Literal['a'], Literal['b']]"
+[builtins fixtures/narrowing.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testTypeNarrowingStringInList]
+from typing import Literal, List
+typ: List[Literal['a', 'b']] = ['a', 'b']
+x: str = "hi!"
+if x in typ:
+    reveal_type(x)  # N: Revealed type is "Union[Literal['a'], Literal['b']]"
+else:
+    reveal_type(x)  # N: Revealed type is "builtins.str"
+if x not in typ:
+    reveal_type(x)  # N: Revealed type is "builtins.str"
+else:
+    reveal_type(x)  # N: Revealed type is "Union[Literal['a'], Literal['b']]"
+[builtins fixtures/narrowing.pyi]
+[typing fixtures/typing-medium.pyi]
+
+[case testTypeNarrowingUnionStringFloat]
+from typing import Union
+def foobar(foo: Union[str, float]):
+    if foo in ['a', 'b']:
+        reveal_type(foo)  # N: Revealed type is "builtins.str"
+    else:
+        reveal_type(foo)  # N: Revealed type is "Union[builtins.str, builtins.float]"
+[builtins fixtures/primitives.pyi]
+[typing fixtures/typing-medium.pyi]
diff --git a/test-data/unit/check-python312.test b/test-data/unit/check-python312.test
index 073ef7f4bdec..a3f4c87120cd 100644
--- a/test-data/unit/check-python312.test
+++ b/test-data/unit/check-python312.test
@@ -1667,3 +1667,49 @@ if x["other"] is not None:
 type Y[T] = {"item": T, **Y[T]}  # E: Overwriting TypedDict field "item" while merging
 [builtins fixtures/dict.pyi]
 [typing fixtures/typing-full.pyi]
+
+[case testPEP695UsingIncorrectExpressionsInTypeVariableBound]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+
+type X[T: (yield 1)] = Any  # E: Yield expression cannot be used as a type variable bound
+type Y[T: (yield from [])] = Any # E: Yield expression cannot be used as a type variable bound
+type Z[T: (a := 1)] = Any  # E: Named expression cannot be used as a type variable bound
+type K[T: (await 1)] = Any # E: Await expression cannot be used as a type variable bound
+
+type XNested[T: (1 + (yield 1))] = Any  # E: Yield expression cannot be used as a type variable bound
+type YNested[T: (1 + (yield from []))] = Any # E: Yield expression cannot be used as a type variable bound
+type ZNested[T: (1 + (a := 1))] = Any  # E: Named expression cannot be used as a type variable bound
+type KNested[T: (1 + (await 1))] = Any # E: Await expression cannot be used as a type variable bound
+
+class FooX[T: (yield 1)]: pass  # E: Yield expression cannot be used as a type variable bound
+class FooY[T: (yield from [])]: pass  # E: Yield expression cannot be used as a type variable bound
+class FooZ[T: (a := 1)]: pass  # E: Named expression cannot be used as a type variable bound
+class FooK[T: (await 1)]: pass  # E: Await expression cannot be used as a type variable bound
+
+class FooXNested[T: (1 + (yield 1))]: pass  # E: Yield expression cannot be used as a type variable bound
+class FooYNested[T: (1 + (yield from []))]: pass  # E: Yield expression cannot be used as a type variable bound
+class FooZNested[T: (1 + (a := 1))]: pass  # E: Named expression cannot be used as a type variable bound
+class FooKNested[T: (1 + (await 1))]: pass  # E: Await expression cannot be used as a type variable bound
+
+def foox[T: (yield 1)](): pass  # E: Yield expression cannot be used as a type variable bound
+def fooy[T: (yield from [])](): pass  # E: Yield expression cannot be used as a type variable bound
+def fooz[T: (a := 1)](): pass  # E: Named expression cannot be used as a type variable bound
+def fook[T: (await 1)](): pass  # E: Await expression cannot be used as a type variable bound
+
+def foox_nested[T: (1 + (yield 1))](): pass  # E: Yield expression cannot be used as a type variable bound
+def fooy_nested[T: (1 + (yield from []))](): pass  # E: Yield expression cannot be used as a type variable bound
+def fooz_nested[T: (1 + (a := 1))](): pass  # E: Named expression cannot be used as a type variable bound
+def fook_nested[T: (1 +(await 1))](): pass  # E: Await expression cannot be used as a type variable bound
+
+[case testPEP695UsingIncorrectExpressionsInTypeAlias]
+# flags: --enable-incomplete-feature=NewGenericSyntax
+
+type X = (yield 1)  # E: Yield expression cannot be used within a type alias
+type Y = (yield from []) # E: Yield expression cannot be used within a type alias
+type Z = (a := 1)  # E: Named expression cannot be used within a type alias
+type K = (await 1)  # E: Await expression cannot be used within a type alias
+
+type XNested = (1 + (yield 1))  # E: Yield expression cannot be used within a type alias
+type YNested = (1 + (yield from [])) # E: Yield expression cannot be used within a type alias
+type ZNested = (1 + (a := 1))  # E: Named expression cannot be used within a type alias
+type KNested = (1 + (await 1))  # E: Await expression cannot be used within a type alias
diff --git a/test-data/unit/fixtures/narrowing.pyi b/test-data/unit/fixtures/narrowing.pyi
index 89ee011c1c80..a36ac7f29bd2 100644
--- a/test-data/unit/fixtures/narrowing.pyi
+++ b/test-data/unit/fixtures/narrowing.pyi
@@ -1,5 +1,5 @@
 # Builtins stub used in check-narrowing test cases.
-from typing import Generic, Sequence, Tuple, Type, TypeVar, Union
+from typing import Generic, Sequence, Tuple, Type, TypeVar, Union, Iterable
 
 
 Tco = TypeVar('Tco', covariant=True)
@@ -15,6 +15,13 @@ class function: pass
 class ellipsis: pass
 class int: pass
 class str: pass
+class float: pass
 class dict(Generic[KT, VT]): pass
 
 def isinstance(x: object, t: Union[Type[object], Tuple[Type[object], ...]]) -> bool: pass
+
+class list(Sequence[Tco]):
+    def __contains__(self, other: object) -> bool: pass
+class set(Iterable[Tco], Generic[Tco]):
+    def __init__(self, iterable: Iterable[Tco] = ...) -> None: ...
+    def __contains__(self, item: object) -> bool: pass