diff --git a/clang/docs/ReleaseNotes.rst b/clang/docs/ReleaseNotes.rst
index 6b396e7ba63f3..77902e4e3124d 100644
--- a/clang/docs/ReleaseNotes.rst
+++ b/clang/docs/ReleaseNotes.rst
@@ -459,6 +459,8 @@ Bug Fixes in This Version
 - Fixed a crash triggered by unterminated ``__has_embed``. (#GH162953)
 - Accept empty enumerations in MSVC-compatible C mode. (#GH114402)
 - Fixed false-positive shadow diagnostics for lambdas in explicit object member functions. (#GH163731)
+- Fixed an incorrect diagnostic for ambiguous function call that uses a 
+  designated-initializer as template argument. (#GH166784)
 
 Bug Fixes to Compiler Builtins
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
diff --git a/clang/lib/Sema/SemaInit.cpp b/clang/lib/Sema/SemaInit.cpp
index cc6ddf568d346..58c1c01c9b3ba 100644
--- a/clang/lib/Sema/SemaInit.cpp
+++ b/clang/lib/Sema/SemaInit.cpp
@@ -2937,6 +2937,8 @@ InitListChecker::CheckDesignatedInitializer(const InitializedEntity &Entity,
     }
 
     FieldDecl *KnownField = D->getFieldDecl();
+    if (KnownField && KnownField->getParent() != RD)
+      KnownField = nullptr;
     if (!KnownField) {
       const IdentifierInfo *FieldName = D->getFieldName();
       ValueDecl *VD = SemaRef.tryLookupUnambiguousFieldDecl(RD, FieldName);
diff --git a/clang/test/SemaTemplate/temp_arg_nontype_cxx2c.cpp b/clang/test/SemaTemplate/temp_arg_nontype_cxx2c.cpp
index c4ac36e263bc8..613956324cb35 100644
--- a/clang/test/SemaTemplate/temp_arg_nontype_cxx2c.cpp
+++ b/clang/test/SemaTemplate/temp_arg_nontype_cxx2c.cpp
@@ -134,3 +134,26 @@ namespace error_on_type_instantiation {
   template void g<int>();
   // expected-note@-1 {{in instantiation of function template specialization}}
 }
+
+namespace GH166784 {
+
+struct A {
+  int a;
+};
+struct B {
+  int b;
+};
+template <A a> void f() {
+  static_assert(a.a == 42);
+}
+template <B b> void f() {
+  static_assert(b.b == 42);
+}
+
+using T1 = decltype(f<{.a = 42}>());
+using T2 = decltype(f<A{.a = 42}>());
+
+using T3 = decltype(f<{.b = 42}>());
+using T4 = decltype(f<B{.b = 42}>());
+
+} // namespace GH166784