diff --git a/compiler/src/dotty/tools/dotc/typer/PrepareInlineable.scala b/compiler/src/dotty/tools/dotc/typer/PrepareInlineable.scala
index 84ff8790f94d..56d89f982869 100644
--- a/compiler/src/dotty/tools/dotc/typer/PrepareInlineable.scala
+++ b/compiler/src/dotty/tools/dotc/typer/PrepareInlineable.scala
@@ -224,6 +224,7 @@ object PrepareInlineable {
     finally
       if ctx.reporter.errorCount != initialErrorCount then
         sym.resetFlag(Inline)
+        sym.resetFlag(Transparent)
         sym.removeAnnotation(defn.BodyAnnot)
 
   /** Register inline info for given inlineable method `sym`.
diff --git a/tests/neg/i11437.check b/tests/neg/i11437.check
new file mode 100644
index 000000000000..f327d6a6a8d2
--- /dev/null
+++ b/tests/neg/i11437.check
@@ -0,0 +1,6 @@
+-- [E006] Not Found Error: tests/neg/i11437.scala:1:29 -----------------------------------------------------------------
+1 |transparent inline def foo = error // error
+  |                             ^^^^^
+  |                             Not found: error
+
+longer explanation available when compiling with `-explain`
diff --git a/tests/neg/i11437.scala b/tests/neg/i11437.scala
new file mode 100644
index 000000000000..b9e29d8d4fda
--- /dev/null
+++ b/tests/neg/i11437.scala
@@ -0,0 +1 @@
+transparent inline def foo = error // error