diff --git a/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts b/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts
index 5367a3ac603ecf..513ae87eddd1a2 100644
--- a/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts
+++ b/crates/oxc_isolated_declarations/tests/fixtures/arrow-function-return-type.ts
@@ -9,3 +9,7 @@ const B = () => { return B };
 const C = function () {}
 
 const D = () => `${''}`;
+
+const E = (): (() => void) | undefined => {
+  return () => {};
+}
diff --git a/crates/oxc_isolated_declarations/tests/fixtures/function-signatures.ts b/crates/oxc_isolated_declarations/tests/fixtures/function-signatures.ts
new file mode 100644
index 00000000000000..17db28e3d402ee
--- /dev/null
+++ b/crates/oxc_isolated_declarations/tests/fixtures/function-signatures.ts
@@ -0,0 +1,24 @@
+// All of these are valid function signatures under isolatedDeclarations
+export function A(): void {
+    return;
+}
+
+export function B(): (() => void) | undefined {
+    return () => {};
+}
+
+// There should be no declaration for the implementation signature, just the
+// two overloads.
+export function C(x: string): void
+export function C(x: number): void
+export function C(x: string | number): void {
+    return;
+}
+
+// private, not emitted
+function D(a, b): void {
+    return;
+}
+function E(a: number, b: string) {
+    return `${a} ${b}`;
+}
diff --git a/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap b/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap
index 4581ca0b4ad9db..520422b6bb7350 100644
--- a/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap
+++ b/crates/oxc_isolated_declarations/tests/snapshots/arrow-function-return-type.snap
@@ -9,6 +9,7 @@ declare function A(): unknown;
 declare const B: unknown;
 declare const C: unknown;
 declare const D: () => string;
+declare const E: () => (() => void) | undefined;
 
 
 ==================== Errors ====================
diff --git a/crates/oxc_isolated_declarations/tests/snapshots/function-signatures.snap b/crates/oxc_isolated_declarations/tests/snapshots/function-signatures.snap
new file mode 100644
index 00000000000000..c7998e7d279a14
--- /dev/null
+++ b/crates/oxc_isolated_declarations/tests/snapshots/function-signatures.snap
@@ -0,0 +1,11 @@
+---
+source: crates/oxc_isolated_declarations/tests/mod.rs
+input_file: crates/oxc_isolated_declarations/tests/fixtures/function-signatures.ts
+---
+```
+==================== .D.TS ====================
+
+export declare function A(): void;
+export declare function B(): (() => void) | undefined;
+export declare function C(x: string): void;
+export declare function C(x: number): void;