diff --git a/source/merge-deep.d.ts b/source/merge-deep.d.ts
index 5903811ad..58ee468bd 100644
--- a/source/merge-deep.d.ts
+++ b/source/merge-deep.d.ts
@@ -33,7 +33,7 @@ type MergeDeepRecordProperty<
 	Source,
 	Options extends MergeDeepInternalOptions,
 > = undefined extends Source
-	? MergeDeepOrReturn<Source, Exclude<Destination, undefined>, Exclude<Source, undefined>, Options> | undefined
+	? MergeDeepOrReturn<Source, Exclude<Destination, undefined>, Exclude<Source, undefined>, Options> | (undefined extends Destination ? undefined : never)
 	: MergeDeepOrReturn<Source, Destination, Source, Options>;
 
 /**
@@ -58,7 +58,7 @@ type DoMergeDeepRecord<
 	}
 // Case in rule 3: Both the source and the destination contain the key.
 	& {
-		[Key in keyof Source as Key extends keyof Destination ? Key : never]: MergeDeepRecordProperty<Destination[Key], Source[Key], Options>;
+		[Key in keyof Source as Key extends keyof Destination ? Key : never]: MergeDeepRecordProperty<Required<Destination>[Key], Required<Source>[Key], Options>;
 	};
 
 /**
diff --git a/test-d/merge-deep.ts b/test-d/merge-deep.ts
index e0e4b4944..979fa7f23 100644
--- a/test-d/merge-deep.ts
+++ b/test-d/merge-deep.ts
@@ -309,3 +309,19 @@ expectType<[Bar, FooBarReplace, ...FooBarReplace[]]>(tupleIntoTupleWithVariadicR
 
 declare const tupleIntoTupleWithVariadicReplaceReversed: MergeDeep<[Foo, ...Foo[]], [number, Bar, ...Bar[]], {arrayMergeMode: 'replace'; recurseIntoArrays: true}>;
 expectType<[number, FooBarReplace, ...FooBarReplace[]]>(tupleIntoTupleWithVariadicReplaceReversed);
+
+type RecordNotPartial = {
+	name: string;
+	type: string;
+	b: {bb?: string; cc: string};
+};
+type RecordPartial = Partial<RecordNotPartial>;
+
+expectType<RecordNotPartial>({} as MergeDeep<RecordPartial, RecordNotPartial>);
+expectType<RecordPartial>({} as MergeDeep<RecordNotPartial, RecordPartial>);
+
+type NotOptional = {a: string; b: number; c: boolean};
+type OptionalWithUndefined = {a: string | undefined; b?: number; c?: boolean | undefined};
+
+expectType<OptionalWithUndefined>({} as MergeDeep<NotOptional, OptionalWithUndefined>);
+expectType<NotOptional>({} as MergeDeep<OptionalWithUndefined, NotOptional>);