diff --git a/mypy/checkexpr.py b/mypy/checkexpr.py
index 44855f49afaf..3ad253597df7 100644
--- a/mypy/checkexpr.py
+++ b/mypy/checkexpr.py
@@ -3801,7 +3801,17 @@ def visit_comparison_expr(self, e: ComparisonExpr) -> Type:
 
                 if not encountered_partial_type and not failed_out:
                     iterable_type = UnionType.make_union(iterable_types)
-                    if not is_subtype(left_type, iterable_type):
+                    matches_iterable_item = False
+                    if iterable_types:
+                        left_item_type = remove_instance_last_known_values(left_type)
+                        erased_iterable_type = remove_instance_last_known_values(iterable_type)
+                        matches_iterable_item = is_subtype(
+                            left_item_type, erased_iterable_type
+                        ) or (
+                            not is_literal_type_like(left_type)
+                            and is_subtype(erased_iterable_type, left_item_type)
+                        )
+                    if not matches_iterable_item:
                         if not container_types:
                             self.msg.unsupported_operand_types("in", left_type, right_type, e)
                         else:
diff --git a/test-data/unit/check-expressions.test b/test-data/unit/check-expressions.test
index 7123285e5eca..a5bde3fa1346 100644
--- a/test-data/unit/check-expressions.test
+++ b/test-data/unit/check-expressions.test
@@ -412,6 +412,20 @@ class D(Iterable[A]):
     def __iter__(self) -> Iterator[A]: pass
 [builtins fixtures/bool.pyi]
 
+[case testInOperatorWithOverlappingIterableItemType]
+from typing import Iterator
+
+class Number(int): pass
+
+def numbers() -> Iterator[Number]:
+    yield Number()
+
+1 in numbers()
+Number() in numbers()
+'' in numbers()  # E: Unsupported operand types for in ("str" and "Iterator[Number]")
+[builtins fixtures/primitives.pyi]
+[typing fixtures/typing-medium.pyi]
+
 [case testNotInOperator]
 from typing import Iterator, Iterable, Any
 a: A