diff --git a/conformance/results/mypy/literals_interactions.toml b/conformance/results/mypy/literals_interactions.toml
index c7b83588..a9f03f04 100644
--- a/conformance/results/mypy/literals_interactions.toml
+++ b/conformance/results/mypy/literals_interactions.toml
@@ -1,17 +1,20 @@
-conformant = "Partial"
 notes = """
-Does not narrow type of `x` with `x in Literal` type guard pattern.
+Does not narrow `str` or `LiteralString` types to `Literal` string types via equality or containment checks.
 """
 output = """
+literals_interactions.py:14: error: Tuple index out of range  [misc]
 literals_interactions.py:15: error: Tuple index out of range  [misc]
 literals_interactions.py:16: error: Tuple index out of range  [misc]
 literals_interactions.py:17: error: Tuple index out of range  [misc]
-literals_interactions.py:18: error: Tuple index out of range  [misc]
-literals_interactions.py:106: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
-literals_interactions.py:109: error: Argument 1 to "expects_pending_status" has incompatible type "str"; expected "Literal['PENDING']"  [arg-type]
+literals_interactions.py:111: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
+literals_interactions.py:113: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
+literals_interactions.py:116: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
+literals_interactions.py:119: error: Argument 1 to "expects_pending_status" has incompatible type "str"; expected "Literal['PENDING']"  [arg-type]
+literals_interactions.py:128: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
+literals_interactions.py:130: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
+literals_interactions.py:133: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal['MALFORMED', 'ABORTED']"  [arg-type]
+literals_interactions.py:136: error: Argument 1 to "expects_pending_status" has incompatible type "str"; expected "Literal['PENDING']"  [arg-type]
 """
-conformance_automated = "Fail"
+conformance_automated = "Pass"
 errors_diff = """
-Line 106: Unexpected errors ['literals_interactions.py:106: error: Argument 1 to "expects_bad_status" has incompatible type "str"; expected "Literal[\\'MALFORMED\\', \\'ABORTED\\']"  [arg-type]']
-Line 109: Unexpected errors ['literals_interactions.py:109: error: Argument 1 to "expects_pending_status" has incompatible type "str"; expected "Literal[\\'PENDING\\']"  [arg-type]']
 """
diff --git a/conformance/results/pyrefly/literals_interactions.toml b/conformance/results/pyrefly/literals_interactions.toml
index 881854c8..451fa2d4 100644
--- a/conformance/results/pyrefly/literals_interactions.toml
+++ b/conformance/results/pyrefly/literals_interactions.toml
@@ -3,8 +3,8 @@ conformance_automated = "Pass"
 errors_diff = """
 """
 output = """
-ERROR literals_interactions.py:15:7-8: Index 5 out of range for tuple with 3 elements [bad-index]
-ERROR literals_interactions.py:16:7-8: Index -5 out of range for tuple with 3 elements [bad-index]
-ERROR literals_interactions.py:17:7-8: Index 4 out of range for tuple with 3 elements [bad-index]
-ERROR literals_interactions.py:18:7-9: Index -4 out of range for tuple with 3 elements [bad-index]
+ERROR literals_interactions.py:14:7-8: Index 5 out of range for tuple with 3 elements [bad-index]
+ERROR literals_interactions.py:15:7-8: Index -5 out of range for tuple with 3 elements [bad-index]
+ERROR literals_interactions.py:16:7-8: Index 4 out of range for tuple with 3 elements [bad-index]
+ERROR literals_interactions.py:17:7-9: Index -4 out of range for tuple with 3 elements [bad-index]
 """
diff --git a/conformance/results/pyright/literals_interactions.toml b/conformance/results/pyright/literals_interactions.toml
index cd51f439..1ecbc1f0 100644
--- a/conformance/results/pyright/literals_interactions.toml
+++ b/conformance/results/pyright/literals_interactions.toml
@@ -1,9 +1,9 @@
 conformant = "Pass"
 output = """
-literals_interactions.py:15:5 - error: Index 5 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
-literals_interactions.py:16:5 - error: Index -5 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
-literals_interactions.py:17:5 - error: Index 4 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
-literals_interactions.py:18:5 - error: Index -4 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
+literals_interactions.py:14:5 - error: Index 5 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
+literals_interactions.py:15:5 - error: Index -5 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
+literals_interactions.py:16:5 - error: Index 4 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
+literals_interactions.py:17:5 - error: Index -4 is out of range for type tuple[int, str, list[bool]] (reportGeneralTypeIssues)
 """
 conformance_automated = "Pass"
 errors_diff = """
diff --git a/conformance/results/results.html b/conformance/results/results.html
index 249f6b70..adf3ffc2 100644
--- a/conformance/results/results.html
+++ b/conformance/results/results.html
@@ -569,11 +569,11 @@ <h3>Python Type System Conformance Test Results</h3>
 <a class="test_group" href="https://typing.readthedocs.io/en/latest/spec/literal.html">Literals</a>
 </th></tr>
 <tr><th class="column col1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;literals_interactions</th>
-<th class="column col2 partially-conformant"><div class="hover-text">Partial<span class="tooltip-text" id="bottom"><p>Does not narrow type of `x` with `x in Literal` type guard pattern.</p></span></div></th>
+<th class="column col2 conformant"><div class="hover-text">Pass*<span class="tooltip-text" id="bottom"><p>Does not narrow `str` or `LiteralString` types to `Literal` string types via equality or containment checks.</p></span></div></th>
 <th class="column col2 conformant">Pass</th>
 <th class="column col2 conformant">Pass</th>
 <th class="column col2 conformant">Pass</th>
-<th class="column col2 partially-conformant"><div class="hover-text">Partial<span class="tooltip-text" id="bottom"><p>Deliberately does not allow `str` to be narrowed to literal string types through equality or containment checks due to the possibility of `str` subclasses that could have unexpected equality semantics.</p></span></div></th>
+<th class="column col2 conformant"><div class="hover-text">Pass*<span class="tooltip-text" id="bottom"><p>Deliberately does not allow `str` to be narrowed to literal string types through equality or containment checks due to the possibility of `str` subclasses that could have unexpected equality semantics.</p><p>Incorrectly fails to narrow the type `LiteralString & ~Literal["MALFORMED"]` to `Literal["ABORTED"]` after an `== "ABORTED"` check.</p></span></div></th>
 </tr>
 <tr><th class="column col1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;literals_literalstring</th>
 <th class="column col2 not-conformant"><div class="hover-text">Unsupported<span class="tooltip-text" id="bottom"><p>Support for `LiteralString` is not implemented.</p></span></div></th>
diff --git a/conformance/results/ty/literals_interactions.toml b/conformance/results/ty/literals_interactions.toml
index 354e5a8f..3310f7c7 100644
--- a/conformance/results/ty/literals_interactions.toml
+++ b/conformance/results/ty/literals_interactions.toml
@@ -1,17 +1,18 @@
-conformance_automated = "Fail"
-conformant = "Partial"
+conformance_automated = "Pass"
 notes = """
 Deliberately does not allow `str` to be narrowed to literal string types through equality or containment checks due to the possibility of `str` subclasses that could have unexpected equality semantics.
+Incorrectly fails to narrow the type `LiteralString & ~Literal["MALFORMED"]` to `Literal["ABORTED"]` after an `== "ABORTED"` check.
 """
 errors_diff = """
-Line 106: Unexpected errors ['literals_interactions.py:106:35: error[invalid-argument-type] Argument to function `expects_bad_status` is incorrect: Expected `Literal["MALFORMED", "ABORTED"]`, found `str`']
-Line 109: Unexpected errors ['literals_interactions.py:109:32: error[invalid-argument-type] Argument to function `expects_pending_status` is incorrect: Expected `Literal["PENDING"]`, found `str`']
 """
 output = """
-literals_interactions.py:15:5: error[index-out-of-bounds] Index 5 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
-literals_interactions.py:16:5: error[index-out-of-bounds] Index -5 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
-literals_interactions.py:17:5: error[index-out-of-bounds] Index 4 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
-literals_interactions.py:18:5: error[index-out-of-bounds] Index -4 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
-literals_interactions.py:106:35: error[invalid-argument-type] Argument to function `expects_bad_status` is incorrect: Expected `Literal["MALFORMED", "ABORTED"]`, found `str`
-literals_interactions.py:109:32: error[invalid-argument-type] Argument to function `expects_pending_status` is incorrect: Expected `Literal["PENDING"]`, found `str`
+literals_interactions.py:14:5: error[index-out-of-bounds] Index 5 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
+literals_interactions.py:15:5: error[index-out-of-bounds] Index -5 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
+literals_interactions.py:16:5: error[index-out-of-bounds] Index 4 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
+literals_interactions.py:17:5: error[index-out-of-bounds] Index -4 is out of bounds for tuple `tuple[int, str, list[bool]]` with length 3
+literals_interactions.py:113:28: error[invalid-argument-type] Argument to function `expects_bad_status` is incorrect: Expected `Literal["MALFORMED", "ABORTED"]`, found `LiteralString & ~Literal["MALFORMED"]`
+literals_interactions.py:128:28: error[invalid-argument-type] Argument to function `expects_bad_status` is incorrect: Expected `Literal["MALFORMED", "ABORTED"]`, found `str`
+literals_interactions.py:130:28: error[invalid-argument-type] Argument to function `expects_bad_status` is incorrect: Expected `Literal["MALFORMED", "ABORTED"]`, found `str & ~Literal["MALFORMED"]`
+literals_interactions.py:133:28: error[invalid-argument-type] Argument to function `expects_bad_status` is incorrect: Expected `Literal["MALFORMED", "ABORTED"]`, found `str`
+literals_interactions.py:136:32: error[invalid-argument-type] Argument to function `expects_pending_status` is incorrect: Expected `Literal["PENDING"]`, found `str`
 """
diff --git a/conformance/results/zuban/literals_interactions.toml b/conformance/results/zuban/literals_interactions.toml
index 242baa2f..16633617 100644
--- a/conformance/results/zuban/literals_interactions.toml
+++ b/conformance/results/zuban/literals_interactions.toml
@@ -2,8 +2,8 @@ conformance_automated = "Pass"
 errors_diff = """
 """
 output = """
+literals_interactions.py:14: error: Tuple index out of range  [misc]
 literals_interactions.py:15: error: Tuple index out of range  [misc]
 literals_interactions.py:16: error: Tuple index out of range  [misc]
 literals_interactions.py:17: error: Tuple index out of range  [misc]
-literals_interactions.py:18: error: Tuple index out of range  [misc]
 """
diff --git a/conformance/tests/literals_interactions.py b/conformance/tests/literals_interactions.py
index b7277325..47412676 100644
--- a/conformance/tests/literals_interactions.py
+++ b/conformance/tests/literals_interactions.py
@@ -3,9 +3,8 @@
 """
 
 # Specification: https://typing.readthedocs.io/en/latest/spec/literal.html#interactions-with-other-types-and-features
-
 from enum import Enum
-from typing import IO, Any, Final, Generic, Literal, TypeVar, assert_type, overload
+from typing import IO, Any, Final, Generic, Literal, TypeVar, LiteralString, assert_type, overload
 
 
 def func1(v: tuple[int, str, list[bool]], a: Literal[0], b: Literal[5], c: Literal[-5]):
@@ -93,6 +92,12 @@ def parse_status1(s: str | Status) -> None:
         assert_type(s, str)
 
 
+# > Type checkers may optionally perform additional analysis for both
+# > enum and non-enum Literal types beyond what is described in the section above.
+#
+# > For example, it may be useful to perform narrowing based on things
+# > like containment or equality checks:
+
 def expects_bad_status(status: Literal["MALFORMED", "ABORTED"]):
     ...
 
@@ -101,12 +106,34 @@ def expects_pending_status(status: Literal["PENDING"]):
     ...
 
 
-def parse_status2(status: str) -> None:
+def parse_status2(status: LiteralString) -> None:
+    if status == "MALFORMED":
+        expects_bad_status(status)  # E? narrowing the type here is sound, but optional per the spec
+    elif status == "ABORTED":
+        expects_bad_status(status)  # E? narrowing the type here is sound, but optional per the spec
+
+    if status in ("MALFORMED", "ABORTED"):
+        expects_bad_status(status)  # E? narrowing the type here is sound, but optional per the spec
+
+    if status == "PENDING":
+        expects_pending_status(status)  # E? narrowing the type here is sound, but optional per the spec
+
+
+# Narrowing `str` to `Literal` strings is unsound given the possiblity of
+# user-defined `str` subclasses that could have custom equality semantics,
+# but is explicitly listed by the spec as optional analysis that type checkers
+# may perform.
+def parse_status3(status: str) -> None:
+    if status == "MALFORMED":
+        expects_bad_status(status)  # E? narrowing the type here is unsound, but allowed per the spec
+    elif status == "ABORTED":
+        expects_bad_status(status)  # E? narrowing the type here is unsound, but allowed per the spec
+
     if status in ("MALFORMED", "ABORTED"):
-        return expects_bad_status(status)
+        expects_bad_status(status)  # E? narrowing the type here is unsound, but allowed per the spec
 
     if status == "PENDING":
-        expects_pending_status(status)
+        expects_pending_status(status)  # E? narrowing the type here is unsound, but allowed per the spec
 
 
 final_val1: Final = 3