diff --git a/vlib/v/parser/fn.v b/vlib/v/parser/fn.v
index 4d30f4d57f..26a663342e 100644
--- a/vlib/v/parser/fn.v
+++ b/vlib/v/parser/fn.v
@@ -353,7 +353,9 @@ fn (mut p Parser) fn_decl() ast.FnDecl {
 	same_line := p.tok.line_nr == p.prev_tok.line_nr
 	if (p.tok.kind.is_start_of_type() && (same_line || p.tok.kind != .lsbr))
 		|| (same_line && p.tok.kind == .key_fn) {
+		p.inside_fn_return = true
 		return_type = p.parse_type()
+		p.inside_fn_return = false
 		return_type_pos = return_type_pos.extend(p.prev_tok.pos())
 	}
 	mut type_sym_method_idx := 0
diff --git a/vlib/v/parser/parse_type.v b/vlib/v/parser/parse_type.v
index af4b58ca3f..0adbeb8e2f 100644
--- a/vlib/v/parser/parse_type.v
+++ b/vlib/v/parser/parse_type.v
@@ -376,6 +376,9 @@ pub fn (mut p Parser) parse_type() ast.Type {
 		p.register_auto_import('sync')
 	}
 	mut nr_muls := 0
+	if p.inside_fn_return && p.tok.kind == .key_mut {
+		p.error_with_pos('cannot use `mut` on fn return type', p.tok.pos())
+	}
 	if p.tok.kind == .key_mut || is_shared || is_atomic {
 		nr_muls++
 		p.next()
diff --git a/vlib/v/parser/parser.v b/vlib/v/parser/parser.v
index 600bbbff7a..764ef19b7f 100644
--- a/vlib/v/parser/parser.v
+++ b/vlib/v/parser/parser.v
@@ -40,6 +40,7 @@ mut:
 	inside_or_expr            bool
 	inside_for                bool
 	inside_fn                 bool // true even with implicit main
+	inside_fn_return          bool
 	inside_unsafe_fn          bool
 	inside_str_interp         bool
 	inside_array_lit          bool
diff --git a/vlib/v/parser/tests/fn_decl_return_type_err_a.out b/vlib/v/parser/tests/fn_decl_return_type_err_a.out
new file mode 100644
index 0000000000..5f8f5260a4
--- /dev/null
+++ b/vlib/v/parser/tests/fn_decl_return_type_err_a.out
@@ -0,0 +1,7 @@
+vlib/v/parser/tests/fn_decl_return_type_err_a.vv:3:13: error: cannot use `mut` on fn return type
+    1 | struct Foo{}
+    2 |
+    3 | fn maker() ?mut Foo {
+      |             ~~~
+    4 |     inner := &Foo{}
+    5 |     return *inner
diff --git a/vlib/v/parser/tests/fn_decl_return_type_err_a.vv b/vlib/v/parser/tests/fn_decl_return_type_err_a.vv
new file mode 100644
index 0000000000..fc1774d9f5
--- /dev/null
+++ b/vlib/v/parser/tests/fn_decl_return_type_err_a.vv
@@ -0,0 +1,9 @@
+struct Foo{}
+
+fn maker() ?mut Foo {
+	inner := &Foo{}
+	return *inner
+}
+
+fn main() {
+}
diff --git a/vlib/v/parser/tests/fn_decl_return_type_err_b.out b/vlib/v/parser/tests/fn_decl_return_type_err_b.out
new file mode 100644
index 0000000000..7fe7e8dde7
--- /dev/null
+++ b/vlib/v/parser/tests/fn_decl_return_type_err_b.out
@@ -0,0 +1,7 @@
+vlib/v/parser/tests/fn_decl_return_type_err_b.vv:3:13: error: cannot use `mut` on fn return type
+    1 | struct Foo{}
+    2 |
+    3 | fn maker() (mut Foo) {
+      |             ~~~
+    4 |     inner := &Foo{}
+    5 |     return *inner
diff --git a/vlib/v/parser/tests/fn_decl_return_type_err_b.vv b/vlib/v/parser/tests/fn_decl_return_type_err_b.vv
new file mode 100644
index 0000000000..2b89efad64
--- /dev/null
+++ b/vlib/v/parser/tests/fn_decl_return_type_err_b.vv
@@ -0,0 +1,9 @@
+struct Foo{}
+
+fn maker() (mut Foo) {
+	inner := &Foo{}
+	return *inner
+}
+
+fn main() {
+}