diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 6a720d947df..587235d5b8e 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -5138,12 +5138,13 @@ namespace ts {
         }
 
         function getStringLiteralTypeForText(text: string): StringLiteralType {
-            if (hasProperty(stringLiteralTypes, text)) {
-                return stringLiteralTypes[text];
+            const unescaped = unescapeIdentifier(text);
+            if (hasProperty(stringLiteralTypes, unescaped)) {
+                return stringLiteralTypes[unescaped];
             }
 
-            const type = stringLiteralTypes[text] = <StringLiteralType>createType(TypeFlags.StringLiteral);
-            type.text = text;
+            const type = stringLiteralTypes[unescaped] = <StringLiteralType>createType(TypeFlags.StringLiteral);
+            type.text = unescaped;
             return type;
         }
 
diff --git a/tests/baselines/reference/doubleUnderStringLiteralAssignability.errors.txt b/tests/baselines/reference/doubleUnderStringLiteralAssignability.errors.txt
new file mode 100644
index 00000000000..782f022faeb
--- /dev/null
+++ b/tests/baselines/reference/doubleUnderStringLiteralAssignability.errors.txt
@@ -0,0 +1,9 @@
+tests/cases/compiler/doubleUnderStringLiteralAssignability.ts(2,5): error TS2322: Type '"no_dunder"' is not assignable to type '"__dunder"'.
+
+
+==== tests/cases/compiler/doubleUnderStringLiteralAssignability.ts (1 errors) ====
+    var shouldBeOk: '__dunder' = '__dunder';
+    var bad: '__dunder' = 'no_dunder';
+        ~~~
+!!! error TS2322: Type '"no_dunder"' is not assignable to type '"__dunder"'.
+    
\ No newline at end of file
diff --git a/tests/baselines/reference/doubleUnderStringLiteralAssignability.js b/tests/baselines/reference/doubleUnderStringLiteralAssignability.js
new file mode 100644
index 00000000000..7911c3766e1
--- /dev/null
+++ b/tests/baselines/reference/doubleUnderStringLiteralAssignability.js
@@ -0,0 +1,8 @@
+//// [doubleUnderStringLiteralAssignability.ts]
+var shouldBeOk: '__dunder' = '__dunder';
+var bad: '__dunder' = 'no_dunder';
+
+
+//// [doubleUnderStringLiteralAssignability.js]
+var shouldBeOk = '__dunder';
+var bad = 'no_dunder';
diff --git a/tests/cases/compiler/doubleUnderStringLiteralAssignability.ts b/tests/cases/compiler/doubleUnderStringLiteralAssignability.ts
new file mode 100644
index 00000000000..81149acc992
--- /dev/null
+++ b/tests/cases/compiler/doubleUnderStringLiteralAssignability.ts
@@ -0,0 +1,2 @@
+var shouldBeOk: '__dunder' = '__dunder';
+var bad: '__dunder' = 'no_dunder';