diff --git a/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs b/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs
index ba1204e504c..1d6c4cc7fb6 100644
--- a/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs
+++ b/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs
@@ -1750,9 +1750,10 @@ extractUnsupported markerName = \case
 
 compileExprWithDefs
   :: CompilingDefault uni fun m ann
-  => GHC.CoreExpr
+  => Maybe GHC.Type
+  -> GHC.CoreExpr
   -> m (PIRTerm uni fun)
-compileExprWithDefs e = do
+compileExprWithDefs mTargetTy e = do
   -- Order matters here. Generlly, Once that define types should go before anything that defines
   -- terms. Otherwise, type definitions might get ignored if they appear in types of term definitions.
   defineBoolType
@@ -1761,7 +1762,38 @@ compileExprWithDefs e = do
   defineBuiltinTerms
   defineIntegerNegate
   defineFix
-  compileExpr Nothing e
+  case mTargetTy of
+    Just targetTy | Just e' <- retargetLeadingAnyBinders targetTy e -> compileExpr Nothing e'
+    _ -> compileExpr Nothing e
+
+retargetLeadingAnyBinders :: GHC.Type -> GHC.CoreExpr -> Maybe GHC.CoreExpr
+retargetLeadingAnyBinders = go False . stripForAllTyCoVars
+  where
+    stripForAllTyCoVars t =
+      case GHC.splitForAllTyCoVar_maybe t of
+        Just (_tv, body) -> stripForAllTyCoVars body
+        Nothing -> t
+
+    go sawErasedLam targetTy e = case e of
+      GHC.Tick tick body -> GHC.Tick tick <$> go sawErasedLam targetTy body
+      GHC.Cast body co -> (`GHC.Cast` co) <$> go sawErasedLam targetTy body
+      GHC.Lam b body
+        | GHC.isTyVar b -> GHC.Lam b <$> go sawErasedLam targetTy body
+        | isAnyBinder b
+        , Just (_t, _m, domTy, codTy) <- GHC.splitFunTy_maybe targetTy ->
+            let b' = GHC.setVarType b domTy
+                body' = retagBinderUses b b' body
+             in GHC.Lam b' <$> go True codTy body'
+        | otherwise -> Nothing
+      _ -> if sawErasedLam then Just e else Nothing
+
+    isAnyBinder b =
+      case GHC.splitTyConApp_maybe (GHC.varType b) of
+        Just (tc, _) -> tc == GHC.anyTyCon
+        Nothing -> False
+
+    retagBinderUses old new body =
+      GHC.substExpr (GHC.extendIdSubst (GHC.mkEmptySubst (GHC.mkInScopeSet (GHC.exprFreeVars body))) old (GHC.Var new)) body
 
 {- Note [We always need DEFAULT]
 GHC can be clever and omit case alternatives sometimes, typically when the typechecker says a case
diff --git a/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs-boot b/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs-boot
index a1064b7d220..82707676b35 100644
--- a/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs-boot
+++ b/plutus-tx-plugin/src/PlutusTx/Compiler/Expr.hs-boot
@@ -14,4 +14,4 @@ compileExpr
   => Maybe GHC.RealSrcSpan -> GHC.CoreExpr -> m (PIRTerm uni fun)
 compileExprWithDefs
   :: CompilingDefault uni fun m ann
-  => GHC.CoreExpr -> m (PIRTerm uni fun)
+  => Maybe GHC.Type -> GHC.CoreExpr -> m (PIRTerm uni fun)
diff --git a/plutus-tx-plugin/src/PlutusTx/Plugin/Common.hs b/plutus-tx-plugin/src/PlutusTx/Plugin/Common.hs
index c233a3a1cc8..bbcde26f89b 100644
--- a/plutus-tx-plugin/src/PlutusTx/Plugin/Common.hs
+++ b/plutus-tx-plugin/src/PlutusTx/Plugin/Common.hs
@@ -647,7 +647,7 @@ compileMarkedExpr _locStr codeTy origE = do
 
   ((pirP, uplcP), covIdx) <-
     runWriterT . runQuoteT . flip runReaderT ctx . flip evalStateT st $
-      runCompiler moduleNameStr opts origE'
+      runCompiler moduleNameStr opts (targetTypeForExpr codeTy origE') origE'
 
   -- serialize the PIR, PLC, and coverageindex outputs into a bytestring.
   bsPir <- makeByteStringLiteral $ flat pirP
@@ -664,6 +664,33 @@ compileMarkedExpr _locStr codeTy origE = do
       `GHC.App` bsPir
       `GHC.App` covIdxFlat
 
+targetTypeForExpr :: GHC.Type -> GHC.CoreExpr -> Maybe GHC.Type
+targetTypeForExpr ty expr
+  | isFunctionReturningUnit ty' = if hasLeadingTermLambda expr then Just ty' else Nothing
+  | otherwise = Nothing
+  where
+    ty' = stripForAllTyCoVars ty
+
+    stripForAllTyCoVars t =
+      case GHC.splitForAllTyCoVar_maybe t of
+        Just (_tv, body) -> stripForAllTyCoVars body
+        Nothing -> t
+
+    isFunctionReturningUnit t =
+      case GHC.splitFunTy_maybe t of
+        Just (_mult, _vis, _dom, cod) -> isFunctionReturningUnit cod
+        Nothing -> case GHC.splitTyConApp_maybe t of
+          Just (tc, _) -> tc == GHC.unitTyCon
+          Nothing -> False
+
+    hasLeadingTermLambda = \case
+      GHC.Tick _ body -> hasLeadingTermLambda body
+      GHC.Cast body _ -> hasLeadingTermLambda body
+      GHC.Lam b body
+        | GHC.isTyVar b -> hasLeadingTermLambda body
+        | otherwise -> True
+      _ -> False
+
 {-| The GHC.Core to PIR to PLC compiler pipeline. Returns both the PIR and PLC output.
 It invokes the whole compiler chain:  Core expr -> PIR expr -> PLC expr -> UPLC expr. -}
 runCompiler
@@ -679,9 +706,10 @@ runCompiler
      )
   => String
   -> PluginOptions
+  -> Maybe GHC.Type
   -> GHC.CoreExpr
   -> m (PIRProgram uni fun, UPLCProgram uni fun)
-runCompiler moduleName opts expr = do
+runCompiler moduleName opts mTargetTy expr = do
   GHC.DynFlags {GHC.extensions = extensions} <- asks ccFlags
   let
     enabledExtensions =
@@ -818,7 +846,7 @@ runCompiler moduleName opts expr = do
             (opts ^. posCertifiedOptsOnly)
 
   -- GHC.Core -> Pir translation.
-  pirT <- original <$> (PIR.runDefT annMayInline $ compileExprWithDefs expr)
+  pirT <- original <$> (PIR.runDefT annMayInline $ compileExprWithDefs mTargetTy expr)
   let pirP = PIR.Program noProvenance plcVersion pirT
   when (opts ^. posDumpPir) . liftIO $
     dumpFlat (void pirP) "initial PIR program" (moduleName ++ "_initial.pir-flat")
diff --git a/plutus-tx-plugin/test/TH/9.12/ignoredUntypedLambdaArguments.golden.pir b/plutus-tx-plugin/test/TH/9.12/ignoredUntypedLambdaArguments.golden.pir
new file mode 100644
index 00000000000..8130f5fe4fd
--- /dev/null
+++ b/plutus-tx-plugin/test/TH/9.12/ignoredUntypedLambdaArguments.golden.pir
@@ -0,0 +1,7 @@
+(let
+  (nonrec)
+  (datatypebind
+    (datatype (tyvardecl Unit (type))  Unit_match (vardecl Unit Unit))
+  )
+  (lam ds (con data) (lam ds (con data) Unit))
+)
\ No newline at end of file
diff --git a/plutus-tx-plugin/test/TH/9.12/ignoredUntypedThreeLambdaArguments.golden.pir b/plutus-tx-plugin/test/TH/9.12/ignoredUntypedThreeLambdaArguments.golden.pir
new file mode 100644
index 00000000000..6e23b66b641
--- /dev/null
+++ b/plutus-tx-plugin/test/TH/9.12/ignoredUntypedThreeLambdaArguments.golden.pir
@@ -0,0 +1,7 @@
+(let
+  (nonrec)
+  (datatypebind
+    (datatype (tyvardecl Unit (type))  Unit_match (vardecl Unit Unit))
+  )
+  (lam ds (con data) (lam ds (con data) (lam ds (con data) Unit)))
+)
\ No newline at end of file
diff --git a/plutus-tx-plugin/test/TH/9.6/ignoredUntypedLambdaArguments.golden.pir b/plutus-tx-plugin/test/TH/9.6/ignoredUntypedLambdaArguments.golden.pir
new file mode 100644
index 00000000000..8130f5fe4fd
--- /dev/null
+++ b/plutus-tx-plugin/test/TH/9.6/ignoredUntypedLambdaArguments.golden.pir
@@ -0,0 +1,7 @@
+(let
+  (nonrec)
+  (datatypebind
+    (datatype (tyvardecl Unit (type))  Unit_match (vardecl Unit Unit))
+  )
+  (lam ds (con data) (lam ds (con data) Unit))
+)
\ No newline at end of file
diff --git a/plutus-tx-plugin/test/TH/9.6/ignoredUntypedThreeLambdaArguments.golden.pir b/plutus-tx-plugin/test/TH/9.6/ignoredUntypedThreeLambdaArguments.golden.pir
new file mode 100644
index 00000000000..6e23b66b641
--- /dev/null
+++ b/plutus-tx-plugin/test/TH/9.6/ignoredUntypedThreeLambdaArguments.golden.pir
@@ -0,0 +1,7 @@
+(let
+  (nonrec)
+  (datatypebind
+    (datatype (tyvardecl Unit (type))  Unit_match (vardecl Unit Unit))
+  )
+  (lam ds (con data) (lam ds (con data) (lam ds (con data) Unit)))
+)
\ No newline at end of file
diff --git a/plutus-tx-plugin/test/TH/Spec.hs b/plutus-tx-plugin/test/TH/Spec.hs
index 3879e8377bb..1edd7187c84 100644
--- a/plutus-tx-plugin/test/TH/Spec.hs
+++ b/plutus-tx-plugin/test/TH/Spec.hs
@@ -49,6 +49,8 @@ tests =
       , goldenEvalCekLog "traceDirect" traceDirect
       , goldenEvalCekLog "tracePrelude" tracePrelude
       , goldenEvalCekLog "traceRepeatedly" traceRepeatedly
+      , goldenPir "ignoredUntypedLambdaArguments" ignoredUntypedLambdaArguments
+      , goldenPir "ignoredUntypedThreeLambdaArguments" ignoredUntypedThreeLambdaArguments
       , -- want to see the raw structure, so using Show
         nestedGoldenVsDoc "someData" "" (pretty $ Haskell.show someData)
       ]
@@ -85,3 +87,9 @@ traceRepeatedly =
          in i3
         ||]
     )
+
+ignoredUntypedLambdaArguments :: CompiledCode (BuiltinData -> BuiltinData -> ())
+ignoredUntypedLambdaArguments = $$(compile [||\_ _ -> ()||])
+
+ignoredUntypedThreeLambdaArguments :: CompiledCode (BuiltinData -> BuiltinData -> BuiltinData -> ())
+ignoredUntypedThreeLambdaArguments = $$(compile [||\_ _ _ -> ()||])