diff --git a/CHANGELOG.md b/CHANGELOG.md
index ed95148fd7..0c51e3b4f8 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -20,6 +20,8 @@
 
 #### :bug: Bug fix
 
+- Avoid crash when using locally abstract types in `type … .` annotations with ticked params; emit a proper diagnostic. https://github.com/rescript-lang/rescript/pull/7851
+
 #### :memo: Documentation
 
 #### :nail_care: Polish
diff --git a/compiler/syntax/src/res_core.ml b/compiler/syntax/src/res_core.ml
index 805874b161..5f599165f1 100644
--- a/compiler/syntax/src/res_core.ml
+++ b/compiler/syntax/src/res_core.ml
@@ -2623,7 +2623,25 @@ and parse_let_binding_body ~start_pos ~attrs p =
         Parser.expect Equal p;
         let expr = parse_expr p in
         let loc = mk_loc start_pos p.prev_end_pos in
-        let exp, poly = wrap_type_annotation ~loc newtypes typ expr in
+        (* varify_constructors may raise Syntaxerr.Error when a locally
+           abstract type variable is referenced as a ticked Ptyp_var inside
+           the annotation (e.g., event<'t>).
+           Catch it and surface a friendly diagnostic instead of crashing. *)
+        let exp, poly =
+          try wrap_type_annotation ~loc newtypes typ expr with
+          | Syntaxerr.Error (Syntaxerr.Variable_in_scope (loc', v)) ->
+            let hint =
+              "Locally abstract type `" ^ v
+              ^ "` is already in scope here. Inside `type ... .` annotations,\n"
+              ^ "refer to these type parameters without a leading quote, e.g.\n"
+              ^ "`event<inputStream, callback>` instead of `event<'inputStream, 'callback>`."
+            in
+            Parser.err ~start_pos:loc'.loc_start ~end_pos:loc'.loc_end p
+              (Diagnostics.message hint);
+            (* Fall back to a simple poly type to keep parsing going. *)
+            let poly = Ast_helper.Typ.poly ~loc newtypes typ in
+            (expr, poly)
+        in
         let pat = Ast_helper.Pat.constraint_ ~loc pat poly in
         (pat, exp)
       | _ ->
diff --git a/tests/build_tests/super_errors/expected/locally_abstract_type_ticked_params.res.expected b/tests/build_tests/super_errors/expected/locally_abstract_type_ticked_params.res.expected
new file mode 100644
index 0000000000..a0c7dad1a1
--- /dev/null
+++ b/tests/build_tests/super_errors/expected/locally_abstract_type_ticked_params.res.expected
@@ -0,0 +1,12 @@
+
+  Syntax error!
+  /.../fixtures/locally_abstract_type_ticked_params.res:11:55-56
+
+   9 │   | End
+  10 │ 
+  11 │ let rec patternMatching : type inputStream callback. (ev: event<'inputS
+     │ tream, 'callback>) => unit {
+  12 │   switch ev {
+  13 │   | Pipe => patternMatching(Data)
+
+  A labeled parameter starts with a `~`. Did you mean: `~ev`?
\ No newline at end of file
diff --git a/tests/build_tests/super_errors/fixtures/locally_abstract_type_ticked_params.res b/tests/build_tests/super_errors/fixtures/locally_abstract_type_ticked_params.res
new file mode 100644
index 0000000000..1254a2fea7
--- /dev/null
+++ b/tests/build_tests/super_errors/fixtures/locally_abstract_type_ticked_params.res
@@ -0,0 +1,18 @@
+// Repro for rescript-lang/rescript#7850
+// Using locally abstract types with ticked params inside the annotation
+// previously threw an uncaught Syntaxerr.Error. This fixture ensures we
+// surface a proper diagnostic instead.
+
+type event<'inputStream,'callback> =
+  | Pipe
+  | Data
+  | End
+
+let rec patternMatching : type inputStream callback. (ev: event<'inputStream, 'callback>) => unit {
+  switch ev {
+  | Pipe => patternMatching(Data)
+  | Data => patternMatching(End)
+  | End => ()
+  }
+}
+