diff --git a/src/eval.c b/src/eval.c
index e612070..e3a3592 100644
--- a/src/eval.c
+++ b/src/eval.c
@@ -868,7 +868,9 @@
 		char_u	 *tp = skipwhite(p + 1);
 
 		// parse the type after the name
-		lp->ll_type = parse_type(&tp, &si->sn_type_list);
+		lp->ll_type = parse_type(&tp, &si->sn_type_list, !quiet);
+		if (lp->ll_type == NULL && !quiet)
+		    return NULL;
 		lp->ll_name_end = tp;
 	    }
 	}
diff --git a/src/proto/vim9type.pro b/src/proto/vim9type.pro
index 90f2345..4409cd6 100644
--- a/src/proto/vim9type.pro
+++ b/src/proto/vim9type.pro
@@ -17,7 +17,7 @@
 int check_type(type_T *expected, type_T *actual, int give_msg, int argidx);
 int check_arg_type(type_T *expected, type_T *actual, int argidx);
 char_u *skip_type(char_u *start, int optional);
-type_T *parse_type(char_u **arg, garray_T *type_gap);
+type_T *parse_type(char_u **arg, garray_T *type_gap, int give_error);
 void common_type(type_T *type1, type_T *type2, type_T **dest, garray_T *type_gap);
 type_T *get_member_type_from_stack(type_T **stack_top, int count, int skip, garray_T *type_gap);
 char *vartype_name(vartype_T type);
diff --git a/src/testdir/test_vim9_expr.vim b/src/testdir/test_vim9_expr.vim
index f79c1f6..c481729 100644
--- a/src/testdir/test_vim9_expr.vim
+++ b/src/testdir/test_vim9_expr.vim
@@ -1951,7 +1951,7 @@
       assert_equal([1, 3, 5], res)
 
       # Lambda returning a dict
-      var Lmb = () => {key: 42}
+      var Lmb = () => ({key: 42})
       assert_equal({key: 42}, Lmb())
   END
   CheckDefSuccess(lines)
@@ -1960,11 +1960,16 @@
   CheckDefFailure(["var Ref = (a)=> a + 1"], 'E1001:')
   CheckDefFailure(["var Ref = (a) =>a + 1"], 'E1001:')
 
+  CheckDefSuccess(["var Ref: func(number): string = (a: number): string => 'x'"])
+  CheckDefSuccess(["var Ref: func(number): any = (a: number): any => 'x'"])
+  CheckDefFailure(["var Ref: func(number): number = (a: number): string => 'x'"], 'E1012:')
+  CheckDefFailure(["var Ref: func(number): string = (a: number): string => 99"], 'E1012:')
+
   CheckDefFailure(["filter([1, 2], (k,v) => 1)"], 'E1069:', 1)
   # error is in first line of the lambda
   CheckDefFailure(["var L = (a) -> a + b"], 'E1001:', 1)
 
-# TODO: lambda after -> doesn't work yet
+# TODO: ->(lambda)() doesn't work yet
 #  assert_equal('xxxyyy', 'xxx'->((a, b) => a .. b)('yyy'))
 
 #  CheckDefExecFailure(["var s = 'asdf'->{a -> a}('x')"],
@@ -1973,9 +1978,9 @@
 #        'E1106: 2 arguments too many')
 #  CheckDefFailure(["echo 'asdf'->{a -> a}(x)"], 'E1001:', 1)
 
-  CheckDefSuccess(['var Fx = (a) => {k1: 0,', ' k2: 1}'])
-  CheckDefFailure(['var Fx = (a) => {k1: 0', ' k2: 1}'], 'E722:', 2)
-  CheckDefFailure(['var Fx = (a) => {k1: 0,', ' k2 1}'], 'E720:', 2)
+  CheckDefSuccess(['var Fx = (a) => ({k1: 0,', ' k2: 1})'])
+  CheckDefFailure(['var Fx = (a) => ({k1: 0', ' k2: 1})'], 'E722:', 2)
+  CheckDefFailure(['var Fx = (a) => ({k1: 0,', ' k2 1})'], 'E720:', 2)
 
   CheckDefSuccess(['var Fx = (a) => [0,', ' 1]'])
   CheckDefFailure(['var Fx = (a) => [0', ' 1]'], 'E696:', 2)
diff --git a/src/userfunc.c b/src/userfunc.c
index f9f302a..5ba90ae 100644
--- a/src/userfunc.c
+++ b/src/userfunc.c
@@ -349,7 +349,7 @@
 		    // will get the type from the default value
 		    type = &t_unknown;
 		else
-		    type = parse_type(&p, &fp->uf_type_list);
+		    type = parse_type(&p, &fp->uf_type_list, TRUE);
 		if (type == NULL)
 		    return FAIL;
 		fp->uf_arg_types[i] = type;
@@ -369,7 +369,7 @@
 		// todo: get type from default value
 		fp->uf_va_type = &t_any;
 	    else
-		fp->uf_va_type = parse_type(&p, &fp->uf_type_list);
+		fp->uf_va_type = parse_type(&p, &fp->uf_type_list, TRUE);
 	    if (fp->uf_va_type == NULL)
 		return FAIL;
 	}
@@ -460,17 +460,22 @@
 
 /*
  * Skip over "->" or "=>" after the arguments of a lambda.
+ * If ": type" is found make "ret_type" point to "type".
  * Return NULL if no valid arrow found.
  */
     static char_u *
-skip_arrow(char_u *start, int equal_arrow)
+skip_arrow(char_u *start, int equal_arrow, char_u **ret_type)
 {
     char_u *s = start;
 
     if (equal_arrow)
     {
 	if (*s == ':')
-	    s = skip_type(skipwhite(s + 1), TRUE);
+	{
+	    s = skipwhite(s + 1);
+	    *ret_type = s;
+	    s = skip_type(s, TRUE);
+	}
 	s = skipwhite(s);
 	if (*s != '=')
 	    return NULL;
@@ -503,6 +508,7 @@
     ufunc_T	*fp = NULL;
     partial_T   *pt = NULL;
     int		varargs;
+    char_u	*ret_type = NULL;
     int		ret;
     char_u	*s;
     char_u	*start, *end;
@@ -517,19 +523,20 @@
     ga_init(&newargs);
     ga_init(&newlines);
 
-    // First, check if this is a lambda expression. "->" or "=>" must exist.
+    // First, check if this is really a lambda expression. "->" or "=>" must
+    // be found after the arguments.
     s = skipwhite(*arg + 1);
     ret = get_function_args(&s, equal_arrow ? ')' : '-', NULL,
 	    types_optional ? &argtypes : NULL, types_optional,
 						 NULL, NULL, TRUE, NULL, NULL);
-    if (ret == FAIL || skip_arrow(s, equal_arrow) == NULL)
+    if (ret == FAIL || skip_arrow(s, equal_arrow, &ret_type) == NULL)
     {
 	if (types_optional)
 	    ga_clear_strings(&argtypes);
 	return NOTDONE;
     }
 
-    // Parse the arguments again.
+    // Parse the arguments for real.
     if (evaluate)
 	pnewargs = &newargs;
     else
@@ -538,7 +545,8 @@
     ret = get_function_args(arg, equal_arrow ? ')' : '-', pnewargs,
 	    types_optional ? &argtypes : NULL, types_optional,
 					    &varargs, NULL, FALSE, NULL, NULL);
-    if (ret == FAIL || (*arg = skip_arrow(*arg, equal_arrow)) == NULL)
+    if (ret == FAIL
+		  || (*arg = skip_arrow(*arg, equal_arrow, &ret_type)) == NULL)
     {
 	if (types_optional)
 	    ga_clear_strings(&argtypes);
@@ -551,11 +559,11 @@
 
     *arg = skipwhite_and_linebreak(*arg, evalarg);
 
-    // Only recognize "{" as the start of a function body when followed by
-    // white space, "{key: val}" is a dict.
-    if (equal_arrow && **arg == '{' && IS_WHITE_OR_NUL((*arg)[1]))
+    // Recognize "{" as the start of a function body.
+    if (equal_arrow && **arg == '{')
     {
 	// TODO: process the function body upto the "}".
+	// Return type is required then.
 	emsg("Lambda function body not supported yet");
 	goto errret;
     }
@@ -619,9 +627,18 @@
 	hash_add(&func_hashtab, UF2HIKEY(fp));
 	fp->uf_args = newargs;
 	ga_init(&fp->uf_def_args);
-	if (types_optional
-			 && parse_argument_types(fp, &argtypes, FALSE) == FAIL)
-	    goto errret;
+	if (types_optional)
+	{
+	    if (parse_argument_types(fp, &argtypes, FALSE) == FAIL)
+		goto errret;
+	    if (ret_type != NULL)
+	    {
+		fp->uf_ret_type = parse_type(&ret_type,
+						      &fp->uf_type_list, TRUE);
+		if (fp->uf_ret_type == NULL)
+		    goto errret;
+	    }
+	}
 
 	fp->uf_lines = newlines;
 	if (current_funccal != NULL && eval_lavars)
@@ -3752,7 +3769,7 @@
 	else
 	{
 	    p = ret_type;
-	    fp->uf_ret_type = parse_type(&p, &fp->uf_type_list);
+	    fp->uf_ret_type = parse_type(&p, &fp->uf_type_list, TRUE);
 	}
 	SOURCING_LNUM = lnum_save;
     }
diff --git a/src/version.c b/src/version.c
index 50acca1..ba291af 100644
--- a/src/version.c
+++ b/src/version.c
@@ -751,6 +751,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    2209,
+/**/
     2208,
 /**/
     2207,
diff --git a/src/vim9compile.c b/src/vim9compile.c
index 3305bbb..fdc805b 100644
--- a/src/vim9compile.c
+++ b/src/vim9compile.c
@@ -4118,11 +4118,9 @@
     // Recognize <type>
     if (**arg == '<' && eval_isnamec1((*arg)[1]))
     {
-	int		called_emsg_before = called_emsg;
-
 	++*arg;
-	want_type = parse_type(arg, cctx->ctx_type_list);
-	if (called_emsg != called_emsg_before)
+	want_type = parse_type(arg, cctx->ctx_type_list, TRUE);
+	if (want_type == NULL)
 	    return FAIL;
 
 	if (**arg != '>')
@@ -4809,7 +4807,7 @@
  * compile "return [expr]"
  */
     static char_u *
-compile_return(char_u *arg, int set_return_type, cctx_T *cctx)
+compile_return(char_u *arg, int check_return_type, cctx_T *cctx)
 {
     char_u	*p = arg;
     garray_T	*stack = &cctx->ctx_type_stack;
@@ -4824,8 +4822,10 @@
 	if (cctx->ctx_skip != SKIP_YES)
 	{
 	    stack_type = ((type_T **)stack->ga_data)[stack->ga_len - 1];
-	    if (set_return_type)
+	    if (check_return_type && cctx->ctx_ufunc->uf_ret_type == NULL)
+	    {
 		cctx->ctx_ufunc->uf_ret_type = stack_type;
+	    }
 	    else
 	    {
 		if (cctx->ctx_ufunc->uf_ret_type->tt_type == VAR_VOID
@@ -4843,7 +4843,7 @@
     }
     else
     {
-	// "set_return_type" cannot be TRUE, only used for a lambda which
+	// "check_return_type" cannot be TRUE, only used for a lambda which
 	// always has an argument.
 	if (cctx->ctx_ufunc->uf_ret_type->tt_type != VAR_VOID
 		&& cctx->ctx_ufunc->uf_ret_type->tt_type != VAR_UNKNOWN)
@@ -5636,7 +5636,9 @@
 		    goto theend;
 		}
 		p = skipwhite(var_end + 1);
-		type = parse_type(&p, cctx->ctx_type_list);
+		type = parse_type(&p, cctx->ctx_type_list, TRUE);
+		if (type == NULL)
+		    goto theend;
 		has_type = TRUE;
 	    }
 	    else if (lvar != NULL)
@@ -7417,15 +7419,16 @@
  * After ex_function() has collected all the function lines: parse and compile
  * the lines into instructions.
  * Adds the function to "def_functions".
- * When "set_return_type" is set then set ufunc->uf_ret_type to the type of the
- * return statement (used for lambda).
+ * When "check_return_type" is set then set ufunc->uf_ret_type to the type of
+ * the return statement (used for lambda).  When uf_ret_type is already set
+ * then check that it matches.
  * "outer_cctx" is set for a nested function.
  * This can be used recursively through compile_lambda(), which may reallocate
  * "def_functions".
  * Returns OK or FAIL.
  */
     int
-compile_def_function(ufunc_T *ufunc, int set_return_type, cctx_T *outer_cctx)
+compile_def_function(ufunc_T *ufunc, int check_return_type, cctx_T *outer_cctx)
 {
     char_u	*line = NULL;
     char_u	*p;
@@ -7797,7 +7800,7 @@
 		    goto erret;
 
 	    case CMD_return:
-		    line = compile_return(p, set_return_type, &cctx);
+		    line = compile_return(p, check_return_type, &cctx);
 		    cctx.ctx_had_return = TRUE;
 		    break;
 
diff --git a/src/vim9script.c b/src/vim9script.c
index fa455ab..163b8a7 100644
--- a/src/vim9script.c
+++ b/src/vim9script.c
@@ -511,7 +511,6 @@
     char_u	    *name;
     scriptitem_T    *si = SCRIPT_ITEM(current_sctx.sc_sid);
     type_T	    *type;
-    int		    called_emsg_before = called_emsg;
     typval_T	    init_tv;
 
     if (eap->cmdidx == CMD_final || eap->cmdidx == CMD_const)
@@ -548,8 +547,8 @@
 
     // parse type
     p = skipwhite(p + 1);
-    type = parse_type(&p, &si->sn_type_list);
-    if (called_emsg != called_emsg_before)
+    type = parse_type(&p, &si->sn_type_list, TRUE);
+    if (type == NULL)
     {
 	vim_free(name);
 	return p;
diff --git a/src/vim9type.c b/src/vim9type.c
index d655a63..4ea32a7 100644
--- a/src/vim9type.c
+++ b/src/vim9type.c
@@ -596,28 +596,38 @@
  * Returns NULL in case of failure.
  */
     static type_T *
-parse_type_member(char_u **arg, type_T *type, garray_T *type_gap)
+parse_type_member(
+	char_u	    **arg,
+	type_T	    *type,
+	garray_T    *type_gap,
+	int	    give_error)
 {
     type_T  *member_type;
     int	    prev_called_emsg = called_emsg;
 
     if (**arg != '<')
     {
-	if (*skipwhite(*arg) == '<')
-	    semsg(_(e_no_white_space_allowed_before_str), "<");
-	else
-	    emsg(_(e_missing_type));
-	return type;
+	if (give_error)
+	{
+	    if (*skipwhite(*arg) == '<')
+		semsg(_(e_no_white_space_allowed_before_str), "<");
+	    else
+		emsg(_(e_missing_type));
+	}
+	return NULL;
     }
     *arg = skipwhite(*arg + 1);
 
-    member_type = parse_type(arg, type_gap);
+    member_type = parse_type(arg, type_gap, give_error);
+    if (member_type == NULL)
+	return NULL;
 
     *arg = skipwhite(*arg);
     if (**arg != '>' && called_emsg == prev_called_emsg)
     {
-	emsg(_(e_missing_gt_after_type));
-	return type;
+	if (give_error)
+	    emsg(_(e_missing_gt_after_type));
+	return NULL;
     }
     ++*arg;
 
@@ -628,10 +638,11 @@
 
 /*
  * Parse a type at "arg" and advance over it.
- * Return &t_any for failure.
+ * When "give_error" is TRUE give error messages, otherwise be quiet.
+ * Return NULL for failure.
  */
     type_T *
-parse_type(char_u **arg, garray_T *type_gap)
+parse_type(char_u **arg, garray_T *type_gap, int give_error)
 {
     char_u  *p = *arg;
     size_t  len;
@@ -673,7 +684,8 @@
 	    if (len == 4 && STRNCMP(*arg, "dict", len) == 0)
 	    {
 		*arg += len;
-		return parse_type_member(arg, &t_dict_any, type_gap);
+		return parse_type_member(arg, &t_dict_any,
+							 type_gap, give_error);
 	    }
 	    break;
 	case 'f':
@@ -683,8 +695,9 @@
 		*arg += len;
 		return &t_float;
 #else
-		emsg(_(e_this_vim_is_not_compiled_with_float_support));
-		return &t_any;
+		if (give_error)
+		    emsg(_(e_this_vim_is_not_compiled_with_float_support));
+		return NULL;
 #endif
 	    }
 	    if (len == 4 && STRNCMP(*arg, "func", len) == 0)
@@ -721,11 +734,15 @@
 			}
 			else if (first_optional != -1)
 			{
-			    emsg(_(e_mandatory_argument_after_optional_argument));
-			    return &t_any;
+			    if (give_error)
+				emsg(_(e_mandatory_argument_after_optional_argument));
+			    return NULL;
 			}
 
-			arg_type[argcount++] = parse_type(&p, type_gap);
+			type = parse_type(&p, type_gap, give_error);
+			if (type == NULL)
+			    return NULL;
+			arg_type[argcount++] = type;
 
 			// Nothing comes after "...{type}".
 			if (flags & TTFLAG_VARARGS)
@@ -733,31 +750,35 @@
 
 			if (*p != ',' && *skipwhite(p) == ',')
 			{
-			    semsg(_(e_no_white_space_allowed_before_str), ",");
-			    return &t_any;
+			    if (give_error)
+				semsg(_(e_no_white_space_allowed_before_str), ",");
+			    return NULL;
 			}
 			if (*p == ',')
 			{
 			    ++p;
 			    if (!VIM_ISWHITE(*p))
 			    {
-				semsg(_(e_white_space_required_after_str), ",");
-				return &t_any;
+				if (give_error)
+				    semsg(_(e_white_space_required_after_str), ",");
+				return NULL;
 			    }
 			}
 			p = skipwhite(p);
 			if (argcount == MAX_FUNC_ARGS)
 			{
-			    emsg(_(e_too_many_argument_types));
-			    return &t_any;
+			    if (give_error)
+				emsg(_(e_too_many_argument_types));
+			    return NULL;
 			}
 		    }
 
 		    p = skipwhite(p);
 		    if (*p != ')')
 		    {
-			emsg(_(e_missing_close));
-			return &t_any;
+			if (give_error)
+			    emsg(_(e_missing_close));
+			return NULL;
 		    }
 		    *arg = p + 1;
 		}
@@ -765,10 +786,12 @@
 		{
 		    // parse return type
 		    ++*arg;
-		    if (!VIM_ISWHITE(**arg))
+		    if (!VIM_ISWHITE(**arg) && give_error)
 			semsg(_(e_white_space_required_after_str), ":");
 		    *arg = skipwhite(*arg);
-		    ret_type = parse_type(arg, type_gap);
+		    ret_type = parse_type(arg, type_gap, give_error);
+		    if (ret_type == NULL)
+			return NULL;
 		}
 		if (flags == 0 && first_optional == -1 && argcount <= 0)
 		    type = get_func_type(ret_type, argcount, type_gap);
@@ -783,7 +806,7 @@
 						   ? argcount : first_optional;
 			if (func_type_add_arg_types(type, argcount,
 							     type_gap) == FAIL)
-			    return &t_any;
+			    return NULL;
 			mch_memmove(type->tt_args, arg_type,
 						  sizeof(type_T *) * argcount);
 		    }
@@ -802,7 +825,8 @@
 	    if (len == 4 && STRNCMP(*arg, "list", len) == 0)
 	    {
 		*arg += len;
-		return parse_type_member(arg, &t_list_any, type_gap);
+		return parse_type_member(arg, &t_list_any,
+							 type_gap, give_error);
 	    }
 	    break;
 	case 'n':
@@ -828,8 +852,9 @@
 	    break;
     }
 
-    semsg(_(e_type_not_recognized_str), *arg);
-    return &t_any;
+    if (give_error)
+	semsg(_(e_type_not_recognized_str), *arg);
+    return NULL;
 }
 
 /*
@@ -1016,9 +1041,12 @@
     char *
 type_name(type_T *type, char **tofree)
 {
-    char *name = vartype_name(type->tt_type);
+    char *name;
 
     *tofree = NULL;
+    if (type == NULL)
+	return "[unknown]";
+    name = vartype_name(type->tt_type);
     if (type->tt_type == VAR_LIST || type->tt_type == VAR_DICT)
     {
 	char *member_free;