diff --git a/pkg/front_end/lib/src/fasta/type_inference/type_inferrer.dart b/pkg/front_end/lib/src/fasta/type_inference/type_inferrer.dart
index db9d9f4fb96..d76eb4f6011 100644
--- a/pkg/front_end/lib/src/fasta/type_inference/type_inferrer.dart
+++ b/pkg/front_end/lib/src/fasta/type_inference/type_inferrer.dart
@@ -231,16 +231,9 @@ class ClosureContext {
           : returnOrYieldContext;
       if (expectedType != null) {
         expectedType = greatestClosure(inferrer.coreTypes, expectedType);
-        DartType expectedTypeToCheck = expectedType;
-        if (!inferrer.isAssignable(expectedType, type) && isAsync) {
-          DartType unfuturedExpectedType =
-              inferrer.typeSchemaEnvironment.unfutureType(expectedType);
-          if (inferrer.isAssignable(unfuturedExpectedType, type)) {
-            expectedTypeToCheck = unfuturedExpectedType;
-          }
-        }
         if (inferrer.ensureAssignable(
-                expectedTypeToCheck, type, expression, fileOffset) !=
+                expectedType, type, expression, fileOffset,
+                isReturnFromAsync: isAsync) !=
             null) {
           type = expectedType;
         }
@@ -452,8 +445,25 @@ abstract class TypeInferrerImpl extends TypeInferrer {
   /// Checks whether [actualType] can be assigned to [expectedType], and inserts
   /// an implicit downcast if appropriate.
   Expression ensureAssignable(DartType expectedType, DartType actualType,
-      Expression expression, int fileOffset) {
+      Expression expression, int fileOffset,
+      {bool isReturnFromAsync = false}) {
     assert(expectedType == null || isKnown(expectedType));
+
+    DartType initialExpectedType = expectedType;
+    if (isReturnFromAsync && !isAssignable(expectedType, actualType)) {
+      // If the body of the function is async, the expected return type has the
+      // shape FutureOr<T>.  We check both branches for FutureOr here: both T
+      // and Future<T>.
+      DartType unfuturedExpectedType =
+          typeSchemaEnvironment.unfutureType(expectedType);
+      DartType futuredExpectedType = wrapFutureType(unfuturedExpectedType);
+      if (isAssignable(unfuturedExpectedType, actualType)) {
+        expectedType = unfuturedExpectedType;
+      } else if (isAssignable(futuredExpectedType, actualType)) {
+        expectedType = futuredExpectedType;
+      }
+    }
+
     // We don't need to insert assignability checks when doing top level type
     // inference since top level type inference only cares about the type that
     // is inferred (the kernel code is discarded).
@@ -506,7 +516,7 @@ abstract class TypeInferrerImpl extends TypeInferrer {
       } else {
         // Insert an implicit downcast.
         var parent = expression.parent;
-        var typeCheck = new AsExpression(expression, expectedType)
+        var typeCheck = new AsExpression(expression, initialExpectedType)
           ..isTypeError = true
           ..fileOffset = fileOffset;
         parent?.replaceChild(expression, typeCheck);
diff --git a/pkg/front_end/testcases/future_or_test.dart b/pkg/front_end/testcases/future_or_test.dart
new file mode 100644
index 00000000000..375589df6c5
--- /dev/null
+++ b/pkg/front_end/testcases/future_or_test.dart
@@ -0,0 +1,27 @@
+// Copyright (c) 2018, the Dart project authors.  Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+
+// The test checks that an expression with static type Future<dynamic> is
+// accepted as a return expression of a method with an async body and the
+// declared return type Future<int>.
+
+import 'dart:async';
+
+class A {
+  dynamic foo() => null;
+}
+
+class B {
+  A a;
+
+  Future<dynamic> bar() async => a.foo();
+}
+
+class C {
+  B b = B();
+
+  Future<int> baz() async => b.bar();
+}
+
+main() {}
diff --git a/pkg/front_end/testcases/future_or_test.dart.direct.expect b/pkg/front_end/testcases/future_or_test.dart.direct.expect
new file mode 100644
index 00000000000..ea64edd23d8
--- /dev/null
+++ b/pkg/front_end/testcases/future_or_test.dart.direct.expect
@@ -0,0 +1,29 @@
+library;
+import self as self;
+import "dart:core" as core;
+import "dart:async" as asy;
+
+class A extends core::Object {
+  synthetic constructor •() → void
+    : super core::Object::•()
+    ;
+  method foo() → dynamic
+    return null;
+}
+class B extends core::Object {
+  field self::A a = null;
+  synthetic constructor •() → void
+    : super core::Object::•()
+    ;
+  method bar() → asy::Future<dynamic> async 
+    return this.{self::B::a}.foo();
+}
+class C extends core::Object {
+  field self::B b = new self::B::•();
+  synthetic constructor •() → void
+    : super core::Object::•()
+    ;
+  method baz() → asy::Future<core::int> async 
+    return this.{self::C::b}.bar();
+}
+static method main() → dynamic {}
diff --git a/pkg/front_end/testcases/future_or_test.dart.outline.expect b/pkg/front_end/testcases/future_or_test.dart.outline.expect
new file mode 100644
index 00000000000..e69e132ed0f
--- /dev/null
+++ b/pkg/front_end/testcases/future_or_test.dart.outline.expect
@@ -0,0 +1,27 @@
+library;
+import self as self;
+import "dart:core" as core;
+import "dart:async" as asy;
+
+class A extends core::Object {
+  synthetic constructor •() → void
+    ;
+  method foo() → dynamic
+    ;
+}
+class B extends core::Object {
+  field self::A a;
+  synthetic constructor •() → void
+    ;
+  method bar() → asy::Future<dynamic>
+    ;
+}
+class C extends core::Object {
+  field self::B b;
+  synthetic constructor •() → void
+    ;
+  method baz() → asy::Future<core::int>
+    ;
+}
+static method main() → dynamic
+  ;
diff --git a/pkg/front_end/testcases/future_or_test.dart.strong.expect b/pkg/front_end/testcases/future_or_test.dart.strong.expect
new file mode 100644
index 00000000000..253d160f24a
--- /dev/null
+++ b/pkg/front_end/testcases/future_or_test.dart.strong.expect
@@ -0,0 +1,29 @@
+library;
+import self as self;
+import "dart:core" as core;
+import "dart:async" as asy;
+
+class A extends core::Object {
+  synthetic constructor •() → void
+    : super core::Object::•()
+    ;
+  method foo() → dynamic
+    return null;
+}
+class B extends core::Object {
+  field self::A a = null;
+  synthetic constructor •() → void
+    : super core::Object::•()
+    ;
+  method bar() → asy::Future<dynamic> async 
+    return this.{self::B::a}.{self::A::foo}();
+}
+class C extends core::Object {
+  field self::B b = new self::B::•();
+  synthetic constructor •() → void
+    : super core::Object::•()
+    ;
+  method baz() → asy::Future<core::int> async 
+    return this.{self::C::b}.{self::B::bar}() as{TypeError} asy::FutureOr<core::int>;
+}
+static method main() → dynamic {}