diff --git a/src/Boo.Lang.Compiler/Steps/ProcessMethodBodies.cs b/src/Boo.Lang.Compiler/Steps/ProcessMethodBodies.cs
index 217e6b620..ab97cd93c 100755
--- a/src/Boo.Lang.Compiler/Steps/ProcessMethodBodies.cs
+++ b/src/Boo.Lang.Compiler/Steps/ProcessMethodBodies.cs
@@ -2710,7 +2710,7 @@ override public void LeaveReturnStatement(ReturnStatement node)
 				AssertTypeCompatibility(node.Expression, returnType, expressionType);
 
 			//bind to nullable Value if needed
-			if (TypeSystemServices.IsNullable(expressionType) && !TypeSystemServices.IsNullable(returnType))
+			if (TypeSystemServices.IsNullable(expressionType) && !(TypeSystemServices.IsNullable(returnType) || TypeSystemServices.IsUnknown(returnType)))
 			{
 				// TODO: move to later steps or introduce an implicit conversion operator
 				var mre = new MemberReferenceExpression(node.Expression.LexicalInfo, node.Expression, "Value");
diff --git a/tests/BooCompiler.Tests/GenericsTestFixture.cs b/tests/BooCompiler.Tests/GenericsTestFixture.cs
index c714de43f..0561738c1 100644
--- a/tests/BooCompiler.Tests/GenericsTestFixture.cs
+++ b/tests/BooCompiler.Tests/GenericsTestFixture.cs
@@ -614,7 +614,13 @@ public void nullable_6()
 		{
 			RunCompilerTestCase(@"nullable-6.boo");
 		}
-		
+
+		[Test]
+		public void nullable_7()
+		{
+			RunCompilerTestCase(@"nullable-7.boo");
+		}
+
 		[Test]
 		public void override_1()
 		{
diff --git a/tests/testcases/net2/generics/nullable-7.boo b/tests/testcases/net2/generics/nullable-7.boo
new file mode 100644
index 000000000..db8b6f988
--- /dev/null
+++ b/tests/testcases/net2/generics/nullable-7.boo
@@ -0,0 +1,7 @@
+import System
+
+def NullableTest():
+	return Default(Nullable[of int])
+
+var value = NullableTest()
+assert not value.HasValue
\ No newline at end of file