diff --git a/changelog.md b/changelog.md
index f030ebda6..14c5bbe5f 100644
--- a/changelog.md
+++ b/changelog.md
@@ -2,6 +2,7 @@
 
 ## Unreleased
 <!-- Add all new changes here. They will be moved under a version at release -->
+* `FIX` Improve type narrow with **literal alias type** during completion and signature help
 * `NEW` Setting: `Lua.type.inferTableSize`: A Small Table array can be infered
 
 ## 3.12.0
diff --git a/script/core/signature.lua b/script/core/signature.lua
index c52dcff31..27f555a71 100644
--- a/script/core/signature.lua
+++ b/script/core/signature.lua
@@ -114,7 +114,13 @@ local function isEventNotMatch(call, src)
     end
     local eventLiteral = event.extends.types[1] and guide.getLiteral(event.extends.types[1])
     if eventLiteral == nil then
-        return false
+        -- extra checking when function param is not pure literal
+        -- eg: it maybe an alias type with literal values
+        local eventMap = vm.getLiterals(event.extends.types[1])
+        if not eventMap then
+            return false
+        end
+        return not eventMap[literal]
     end
     return eventLiteral ~= literal
 end
diff --git a/script/vm/compiler.lua b/script/vm/compiler.lua
index 8701e8d7b..a3053f589 100644
--- a/script/vm/compiler.lua
+++ b/script/vm/compiler.lua
@@ -962,6 +962,26 @@ local function compileCallArgNode(arg, call, callNode, fixIndex, myIndex)
     local function dealDocFunc(n)
         local myEvent
         if n.args[eventIndex] then
+            if eventMap and myIndex > eventIndex then
+                -- if call param has literal types, then also check if function def param has literal types
+                -- 1. has no literal values => not enough info, thus allowed by default
+                -- 2. has literal values and >= 1 matches call param's literal types => allowed
+                -- 3. has literal values but none matches call param's literal types => filtered
+                local myEventMap = vm.getLiterals(n.args[eventIndex])
+                if myEventMap then
+                    local found = false
+                    for k in pairs(eventMap) do
+                        if myEventMap[k] then
+                            -- there is a matching literal
+                            found = true
+                            break
+                        end
+                    end
+                    if not found then
+                        return
+                    end
+                end
+            end
             local argNode = vm.compileNode(n.args[eventIndex])
             myEvent = argNode:get(1)
         end
diff --git a/test/completion/common.lua b/test/completion/common.lua
index 30350642a..7f576e0bf 100644
--- a/test/completion/common.lua
+++ b/test/completion/common.lua
@@ -3138,6 +3138,44 @@ emit.on(emit, 'won', <??>)
     }
 }
 
+TEST [[
+--- @alias event.AAA "AAA"
+--- @alias event.BBB "BBB"
+
+--- @class Emit
+--- @field on fun(self: Emit, eventName: string, cb: function)
+--- @field on fun(self: Emit, eventName: event.AAA, cb: fun(i: integer))
+--- @field on fun(self: Emit, eventName: event.BBB, cb: fun(s: string))
+local emit = {}
+
+emit:on('AAA', <??>)
+]]
+{
+    [1] = {
+        label    = 'fun(i: integer)',
+        kind     = define.CompletionItemKind.Function,
+    }
+}
+
+TEST [[
+--- @alias event.AAA "AAA"
+--- @alias event.BBB "BBB"
+
+--- @class Emit
+--- @field on fun(self: Emit, eventName: string, cb: function)
+--- @field on fun(self: Emit, eventName: event.AAA, cb: fun(i: integer))
+--- @field on fun(self: Emit, eventName: event.BBB, cb: fun(s: string))
+local emit = {}
+
+emit:on('BBB', <??>)
+]]
+{
+    [1] = {
+        label    = 'fun(s: string)',
+        kind     = define.CompletionItemKind.Function,
+    }
+}
+
 TEST [[
 local function f()
     local inferCache
diff --git a/test/signature/init.lua b/test/signature/init.lua
index bd4d40cd4..010c15314 100644
--- a/test/signature/init.lua
+++ b/test/signature/init.lua
@@ -373,6 +373,40 @@ t:event("onTimer", <??>)
 '(method) (ev: "onTimer", <!t: integer!>)',
 }
 
+TEST [[
+---@alias event.onChat "onChat"
+---@alias event.onTimer "onTimer"
+
+---@class A
+---@field event fun(self: self, ev: event.onChat, c: string)
+---@field event fun(self: self, ev: event.onTimer, t: integer)
+
+---@type A
+local t
+
+t:event("onChat", <??>)
+]]
+{
+'(method) (ev: "onChat", <!c: string!>)',
+}
+
+TEST [[
+---@alias event.onChat "onChat"
+---@alias event.onTimer "onTimer"
+
+---@class A
+---@field event fun(self: self, ev: event.onChat, c: string)
+---@field event fun(self: self, ev: event.onTimer, t: integer)
+
+---@type A
+local t
+
+t:event("onTimer", <??>)
+]]
+{
+'(method) (ev: "onTimer", <!t: integer!>)',
+}
+
 local config = require 'config'
 config.set(nil, "Lua.type.inferParamType", true)