diff --git a/compiler/lambdalifting.nim b/compiler/lambdalifting.nim
index a34f4ba948da..9790eefd8b6c 100644
--- a/compiler/lambdalifting.nim
+++ b/compiler/lambdalifting.nim
@@ -458,7 +458,7 @@ proc detectCapturedVars(n: PNode; owner: PSym; c: var DetectionPass) =
             else:
               discard addField(obj, s, c.graph.cache, c.idgen)
     # direct or indirect dependency:
-    elif (innerProc and s.typ.callConv == ccClosure) or interestingVar(s):
+    elif (innerProc and not s.isIterator and s.typ.callConv == ccClosure) or interestingVar(s):
       discard """
         proc outer() =
           var x: int
diff --git a/tests/closure/t20152.nim b/tests/closure/t20152.nim
new file mode 100644
index 000000000000..484ea074168d
--- /dev/null
+++ b/tests/closure/t20152.nim
@@ -0,0 +1,20 @@
+discard """
+  action: compile
+"""
+
+proc foo() =
+  iterator it():int {.closure.} =
+    yield 1
+  proc useIter() {.nimcall.} =
+    var iii = it # <-- illegal capture
+    doAssert iii() == 1
+  useIter()
+foo()
+
+proc foo2() =
+  proc bar() = # Local function, but not a closure, because no captures
+    echo "hi"
+  proc baz() {.nimcall.} = # Calls local function
+    bar()
+  baz()
+foo2()