diff --git a/crates/ty_python_semantic/resources/mdtest/protocols.md b/crates/ty_python_semantic/resources/mdtest/protocols.md
index cfa4c68914570..28069bd07c965 100644
--- a/crates/ty_python_semantic/resources/mdtest/protocols.md
+++ b/crates/ty_python_semantic/resources/mdtest/protocols.md
@@ -3184,14 +3184,9 @@ from ty_extensions import reveal_protocol_interface
 reveal_protocol_interface(Foo)
 ```
 
-## Known panics
+## Protocols generic over TypeVars bound to forward references
 
-### Protocols generic over TypeVars bound to forward references
-
-This test currently panics because the `ClassLiteral::explicit_bases` query fails to converge. See
-issue <https://github.com/astral-sh/ty/issues/1587>.
-
-<!-- expect-panic: execute: too many cycle iterations -->
+Protocols can have TypeVars with forward reference bounds that form cycles.
 
 ```py
 from typing import Any, Protocol, TypeVar
@@ -3209,6 +3204,19 @@ class A2(Protocol[T2]):
 
 class B1(A1[T3], Protocol[T3]): ...
 class B2(A2[T4], Protocol[T4]): ...
+
+# TODO should just be `B2[Any]`
+reveal_type(T3.__bound__)  # revealed: B2[Any] | @Todo(specialized non-generic class)
+
+# TODO error: [invalid-type-arguments]
+def f(x: B1[int]):
+    pass
+
+reveal_type(T4.__bound__)  # revealed: B1[Any]
+
+# error: [invalid-type-arguments]
+def g(x: B2[int]):
+    pass
 ```
 
 ## TODO
diff --git a/crates/ty_python_semantic/src/types.rs b/crates/ty_python_semantic/src/types.rs
index 81d056f91aa17..820d31c1b043b 100644
--- a/crates/ty_python_semantic/src/types.rs
+++ b/crates/ty_python_semantic/src/types.rs
@@ -9612,6 +9612,7 @@ impl<'db> TypeVarInstance<'db> {
     }
 
     #[salsa::tracked(
+        cycle_fn=lazy_bound_or_constraints_cycle_recover,
         cycle_initial=lazy_bound_or_constraints_cycle_initial,
         heap_size=ruff_memory_usage::heap_size
     )]
@@ -9636,6 +9637,7 @@ impl<'db> TypeVarInstance<'db> {
     }
 
     #[salsa::tracked(
+        cycle_fn=lazy_bound_or_constraints_cycle_recover,
         cycle_initial=lazy_bound_or_constraints_cycle_initial,
         heap_size=ruff_memory_usage::heap_size
     )]
@@ -9730,7 +9732,23 @@ fn lazy_bound_or_constraints_cycle_initial<'db>(
     None
 }
 
-#[allow(clippy::ref_option)]
+#[expect(clippy::ref_option)]
+fn lazy_bound_or_constraints_cycle_recover<'db>(
+    db: &'db dyn Db,
+    cycle: &salsa::Cycle,
+    previous: &Option<TypeVarBoundOrConstraints<'db>>,
+    current: Option<TypeVarBoundOrConstraints<'db>>,
+    _typevar: TypeVarInstance<'db>,
+) -> Option<TypeVarBoundOrConstraints<'db>> {
+    // Normalize the bounds/constraints to ensure cycle convergence.
+    match (previous, current) {
+        (Some(prev), Some(current)) => Some(current.cycle_normalized(db, *prev, cycle)),
+        (None, Some(current)) => Some(current.recursive_type_normalized(db, cycle)),
+        (_, None) => None,
+    }
+}
+
+#[expect(clippy::ref_option)]
 fn lazy_default_cycle_recover<'db>(
     db: &'db dyn Db,
     cycle: &salsa::Cycle,
@@ -9738,6 +9756,7 @@ fn lazy_default_cycle_recover<'db>(
     default: Option<Type<'db>>,
     _typevar: TypeVarInstance<'db>,
 ) -> Option<Type<'db>> {
+    // Normalize the default to ensure cycle convergence.
     match (previous_default, default) {
         (Some(prev), Some(default)) => Some(default.cycle_normalized(db, *prev, cycle)),
         (None, Some(default)) => Some(default.recursive_type_normalized(db, cycle)),
@@ -10106,6 +10125,64 @@ impl<'db> TypeVarBoundOrConstraints<'db> {
         }
     }
 
+    /// Normalize for cycle recovery by combining with the previous value and
+    /// removing divergent types introduced by the cycle.
+    ///
+    /// See [`Type::cycle_normalized`] for more details on how this works.
+    fn cycle_normalized(self, db: &'db dyn Db, previous: Self, cycle: &salsa::Cycle) -> Self {
+        match (self, previous) {
+            (
+                TypeVarBoundOrConstraints::UpperBound(bound),
+                TypeVarBoundOrConstraints::UpperBound(prev_bound),
+            ) => {
+                TypeVarBoundOrConstraints::UpperBound(bound.cycle_normalized(db, prev_bound, cycle))
+            }
+            (
+                TypeVarBoundOrConstraints::Constraints(constraints),
+                TypeVarBoundOrConstraints::Constraints(prev_constraints),
+            ) => {
+                // Normalize each constraint with its corresponding previous constraint
+                let current_elements = constraints.elements(db);
+                let prev_elements = prev_constraints.elements(db);
+                TypeVarBoundOrConstraints::Constraints(UnionType::new(
+                    db,
+                    current_elements
+                        .iter()
+                        .zip(prev_elements.iter())
+                        .map(|(ty, prev_ty)| ty.cycle_normalized(db, *prev_ty, cycle))
+                        .collect::<Box<_>>(),
+                ))
+            }
+            // The choice of whether it's an upper bound or constraints is purely syntactic and
+            // thus can never change in a cycle: `parsed_module` does not participate in cycles,
+            // the AST will never change from one iteration to the next.
+            _ => unreachable!(
+                "TypeVar switched from bound to constraints (or vice versa) in fixpoint iteration"
+            ),
+        }
+    }
+
+    /// Normalize recursive types for cycle recovery when there's no previous value.
+    ///
+    /// See [`Type::recursive_type_normalized`] for more details.
+    fn recursive_type_normalized(self, db: &'db dyn Db, cycle: &salsa::Cycle) -> Self {
+        match self {
+            TypeVarBoundOrConstraints::UpperBound(bound) => {
+                TypeVarBoundOrConstraints::UpperBound(bound.recursive_type_normalized(db, cycle))
+            }
+            TypeVarBoundOrConstraints::Constraints(constraints) => {
+                TypeVarBoundOrConstraints::Constraints(UnionType::new(
+                    db,
+                    constraints
+                        .elements(db)
+                        .iter()
+                        .map(|ty| ty.recursive_type_normalized(db, cycle))
+                        .collect::<Box<_>>(),
+                ))
+            }
+        }
+    }
+
     fn materialize_impl(
         self,
         db: &'db dyn Db,
diff --git a/crates/ty_python_semantic/src/types/infer/builder.rs b/crates/ty_python_semantic/src/types/infer/builder.rs
index 9488d2270d9e1..dd04b6d001145 100644
--- a/crates/ty_python_semantic/src/types/infer/builder.rs
+++ b/crates/ty_python_semantic/src/types/infer/builder.rs
@@ -11481,6 +11481,10 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
                     if typevar.default_type(db).is_some() {
                         typevar_with_defaults += 1;
                     }
+                    // TODO consider just accepting the given specialization without checking
+                    // against bounds/constraints, but recording the expression for deferred
+                    // checking at end of scope. This would avoid a lot of cycles caused by eagerly
+                    // doing assignment checks here.
                     match typevar.typevar(db).bound_or_constraints(db) {
                         Some(TypeVarBoundOrConstraints::UpperBound(bound)) => {
                             if provided_type
@@ -11505,6 +11509,10 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
                             }
                         }
                         Some(TypeVarBoundOrConstraints::Constraints(constraints)) => {
+                            // TODO: this is wrong, the given specialization needs to be assignable
+                            // to _at least one_ of the individual constraints, not to the union of
+                            // all of them. `int | str` is not a valid specialization of a typevar
+                            // constrained to `(int, str)`.
                             if provided_type
                                 .when_assignable_to(
                                     db,