diff --git a/mypy/constraints.py b/mypy/constraints.py
index a8fa114e6029..cfb627e9f2b5 100644
--- a/mypy/constraints.py
+++ b/mypy/constraints.py
@@ -816,7 +816,7 @@ def visit_instance(self, template: Instance) -> list[Constraint]:
         if isinstance(actual, Overloaded) and actual.fallback is not None:
             actual = actual.fallback
         if isinstance(actual, TypedDictType):
-            actual = actual.as_anonymous().fallback
+            actual = actual.create_anonymous_fallback()
         if isinstance(actual, LiteralType):
             actual = actual.fallback
         if isinstance(actual, Instance):
diff --git a/mypy/meet.py b/mypy/meet.py
index c11d7d5d1aaa..365544d4584f 100644
--- a/mypy/meet.py
+++ b/mypy/meet.py
@@ -1263,7 +1263,7 @@ def typed_dict_mapping_overlap(
     key_type, value_type = get_proper_types(other.args)
 
     # TODO: is there a cleaner way to get str_type here?
-    fallback = typed.as_anonymous().fallback
+    fallback = typed.create_anonymous_fallback()
     str_type = fallback.type.bases[0].args[0]  # typing._TypedDict inherits Mapping[str, object]
 
     # Special case: a TypedDict with no required keys overlaps with an empty dict.
diff --git a/mypy/plugins/default.py b/mypy/plugins/default.py
index 47387530de30..a994a3a80066 100644
--- a/mypy/plugins/default.py
+++ b/mypy/plugins/default.py
@@ -479,8 +479,9 @@ def typed_dict_update_signature_callback(ctx: MethodSigContext) -> CallableType:
         arg_type = get_proper_type(signature.arg_types[0])
         if not isinstance(arg_type, TypedDictType):
             return signature
-        arg_type = arg_type.as_anonymous()
-        arg_type = arg_type.copy_modified(required_keys=set())
+        arg_type = ctx.type.copy_modified(
+            fallback=arg_type.create_anonymous_fallback(), required_keys=set()
+        )
         if ctx.args and ctx.args[0]:
             if signature.name in _TP_DICT_MUTATING_METHODS:
                 # If we want to mutate this object in place, we need to set this flag,
diff --git a/mypy/types.py b/mypy/types.py
index 207e87984bed..494d65cd00c3 100644
--- a/mypy/types.py
+++ b/mypy/types.py
@@ -3080,11 +3080,11 @@ def is_final(self) -> bool:
     def is_anonymous(self) -> bool:
         return self.fallback.type.fullname in TPDICT_FB_NAMES
 
-    def as_anonymous(self) -> TypedDictType:
+    def create_anonymous_fallback(self) -> Instance:
         if self.is_anonymous():
-            return self
+            return self.fallback
         assert self.fallback.type.typeddict_type is not None
-        return self.fallback.type.typeddict_type.as_anonymous()
+        return self.fallback.type.typeddict_type.create_anonymous_fallback()
 
     def copy_modified(
         self,
@@ -3110,10 +3110,6 @@ def copy_modified(
             required_keys &= set(item_names)
         return TypedDictType(items, required_keys, readonly_keys, fallback, self.line, self.column)
 
-    def create_anonymous_fallback(self) -> Instance:
-        anonymous = self.as_anonymous()
-        return anonymous.fallback
-
     def names_are_wider_than(self, other: TypedDictType) -> bool:
         return len(other.items.keys() - self.items.keys()) == 0
 
diff --git a/test-data/unit/check-typeddict.test b/test-data/unit/check-typeddict.test
index 67a66e18001d..1683fa40ed0b 100644
--- a/test-data/unit/check-typeddict.test
+++ b/test-data/unit/check-typeddict.test
@@ -3011,6 +3011,39 @@ reveal_type(s3)  # N: Revealed type is "TypedDict('__main__.Sub3', {'x': Any, 'y
 [builtins fixtures/dict.pyi]
 [typing fixtures/typing-typeddict.pyi]
 
+[case testGenericTypedDictUpdate]
+from typing import TypedDict, Generic, TypeVar
+
+T = TypeVar("T")
+
+class Group(TypedDict, Generic[T]):
+    a: T
+
+value: Group[int] = {"a": 1}
+
+def func(value2: Group[int]) -> None:
+    value.update(value2)
+    value.update({"a": 2})
+    value.update({"a": "string"})  # E: Incompatible types (expression has type "str", TypedDict item "a" has type "int")
+
+S = TypeVar("S")
+
+class MultiField(TypedDict, Generic[T, S]):
+    x: T
+    y: S
+
+mf1: MultiField[int, str] = {"x": 1, "y": "a"}
+mf2: MultiField[int, str] = {"x": 2, "y": "b"}
+mf1.update(mf2)
+
+mf3: MultiField[str, str] = {"x": "test", "y": "c"}
+mf1.update(mf3)  # E: Argument 1 to "update" of "TypedDict" has incompatible type "MultiField[str, str]"; expected "TypedDict({'x': int, 'y': str})"
+
+mf1.update({"x": 3})
+mf1.update({"y": "d"})
+[builtins fixtures/dict.pyi]
+[typing fixtures/typing-typeddict.pyi]
+
 [case testTypedDictAttributeOnClassObject]
 from typing import TypedDict