diff --git a/UPGRADING b/UPGRADING
index c2aef62354064..086fb975d05df 100644
--- a/UPGRADING
+++ b/UPGRADING
@@ -65,6 +65,7 @@ PHP 8.5 UPGRADE NOTES
 ========================================
 
 - Core:
+  . Closure is now a proper subtype of callable
   . Added support for Closures in constant expressions.
     RFC: https://wiki.php.net/rfc/closures_in_const_expr
 
diff --git a/Zend/tests/type_declarations/callable_001.phpt b/Zend/tests/type_declarations/callable/callable_001.phpt
similarity index 100%
rename from Zend/tests/type_declarations/callable_001.phpt
rename to Zend/tests/type_declarations/callable/callable_001.phpt
diff --git a/Zend/tests/type_declarations/callable_002.phpt b/Zend/tests/type_declarations/callable/callable_002.phpt
similarity index 100%
rename from Zend/tests/type_declarations/callable_002.phpt
rename to Zend/tests/type_declarations/callable/callable_002.phpt
diff --git a/Zend/tests/type_declarations/callable_003.phpt b/Zend/tests/type_declarations/callable/callable_003.phpt
similarity index 100%
rename from Zend/tests/type_declarations/callable_003.phpt
rename to Zend/tests/type_declarations/callable/callable_003.phpt
diff --git a/Zend/tests/type_declarations/callable/callable_variance_closure.phpt b/Zend/tests/type_declarations/callable/callable_variance_closure.phpt
new file mode 100644
index 0000000000000..d3d0a77fd9a7c
--- /dev/null
+++ b/Zend/tests/type_declarations/callable/callable_variance_closure.phpt
@@ -0,0 +1,15 @@
+--TEST--
+Closure should be covariant with callable
+--FILE--
+<?php
+
+class A {
+    public function foo(Closure $c): callable {}
+}
+class B extends A {
+    public function foo(callable $c): Closure {}
+}
+?>
+OK
+--EXPECT--
+OK
diff --git a/Zend/zend_inheritance.c b/Zend/zend_inheritance.c
index 7abc8119d9ea5..d06d8e96195c5 100644
--- a/Zend/zend_inheritance.c
+++ b/Zend/zend_inheritance.c
@@ -23,6 +23,7 @@
 #include "zend_execute.h"
 #include "zend_inheritance.h"
 #include "zend_interfaces.h"
+#include "zend_closures.h"
 #include "zend_smart_str.h"
 #include "zend_operators.h"
 #include "zend_exceptions.h"
@@ -490,6 +491,19 @@ static inheritance_status zend_is_class_subtype_of_type(
 		}
 	}
 
+	/* If the parent has 'callable' as a return type, then Closure satisfies the co-variant check */
+	if (ZEND_TYPE_FULL_MASK(proto_type) & MAY_BE_CALLABLE) {
+		if (!fe_ce) fe_ce = lookup_class(fe_scope, fe_class_name);
+		if (!fe_ce) {
+			have_unresolved = 1;
+		} else if (fe_ce == zend_ce_closure) {
+			track_class_dependency(fe_ce, fe_class_name);
+			return INHERITANCE_SUCCESS;
+		} else {
+			return INHERITANCE_ERROR;
+		}
+	}
+
 	zend_type *single_type;
 
 	/* Traverse the list of parent types and check if the current child (FE)