diff --git a/include/swift/Parse/Parser.h b/include/swift/Parse/Parser.h
index 0b8195cf3c7..82a8d767267 100644
--- a/include/swift/Parse/Parser.h
+++ b/include/swift/Parse/Parser.h
@@ -556,6 +556,29 @@ public:
   /// Return the next token that will be installed by \c consumeToken.
   const Token &peekToken();
 
+  /// Consumes K tokens within a backtracking scope before calling \c f and
+  /// providing it with the backtracking scope. Unless if the backtracking is
+  /// explicitly cancelled, the parser's token state is restored after \c f
+  /// returns.
+  ///
+  /// \param K The number of tokens ahead to skip. Zero is the current token.
+  /// \param f The function to apply after skipping K tokens ahead.
+  ///          The value returned by \c f will be returned by \c peekToken
+  ///           after the parser is rolled back.
+  /// \returns the value returned by \c f
+  /// \note When calling, you may need to specify the \c Val type
+  ///       explicitly as a type parameter.
+  template <typename Val>
+  Val lookahead(unsigned char K,
+                llvm::function_ref<Val(CancellableBacktrackingScope &)> f) {
+    CancellableBacktrackingScope backtrackScope(*this);
+
+    for (unsigned char i = 0; i < K; ++i)
+      consumeToken();
+
+    return f(backtrackScope);
+  }
+
   /// Consume a token that we created on the fly to correct the original token
   /// stream from lexer.
   void consumeExtraToken(Token K);
diff --git a/lib/Parse/ParsePattern.cpp b/lib/Parse/ParsePattern.cpp
index 93b0467c0a8..c1fd9f24a48 100644
--- a/lib/Parse/ParsePattern.cpp
+++ b/lib/Parse/ParsePattern.cpp
@@ -172,12 +172,15 @@ bool Parser::startsParameterName(bool isClosure) {
       return true;
 
     // "isolated" can be an argument label, but it's also a contextual keyword,
-    // so look ahead one more token see if we have a ':' that would indicate
-    // that this is an argument label.
-    BacktrackingScope backtrackScope(*this);
-    consumeToken();
-    consumeToken();
-    return Tok.is(tok::colon);
+    // so look ahead one more token (two total) see if we have a ':' that would
+    // indicate that this is an argument label.
+    return lookahead<bool>(2, [&](CancellableBacktrackingScope &) {
+      if (Tok.is(tok::colon))
+        return true; // isolated :
+
+      // isolated x :
+      return Tok.canBeArgumentLabel() && nextTok.is(tok::colon);
+    });
   }
 
   if (isOptionalToken(nextTok)
@@ -260,14 +263,30 @@ Parser::parseParameterClause(SourceLoc &leftParenLoc,
            Tok.isContextualKeyword("__shared") ||
            Tok.isContextualKeyword("__owned") ||
            Tok.isContextualKeyword("isolated")) {
+
       if (Tok.isContextualKeyword("isolated")) {
+        // did we already find an 'isolated' type modifier?
         if (param.IsolatedLoc.isValid()) {
           diagnose(Tok, diag::parameter_specifier_repeated)
-            .fixItRemove(Tok.getLoc());
+              .fixItRemove(Tok.getLoc());
           consumeToken();
-        } else {
-          param.IsolatedLoc = consumeToken();
+          continue;
         }
+
+        // is this 'isolated' token the identifier of an argument label?
+        bool partOfArgumentLabel = lookahead<bool>(1, [&](CancellableBacktrackingScope &) {
+          if (Tok.is(tok::colon))
+            return true;  // isolated :
+
+          // isolated x :
+          return Tok.canBeArgumentLabel() && peekToken().is(tok::colon);
+        });
+
+        if (partOfArgumentLabel)
+          break;
+
+        // consume 'isolated' as type modifier
+        param.IsolatedLoc = consumeToken();
         continue;
       }
 
@@ -304,7 +323,7 @@ Parser::parseParameterClause(SourceLoc &leftParenLoc,
       diagnose(Tok, diag::parameter_let_var_as_attr, Tok.getText())
         .fixItReplace(Tok.getLoc(), "`" + Tok.getText().str() + "`");
     }
-    
+
     if (startsParameterName(isClosure)) {
       // identifier-or-none for the first name
       param.FirstNameLoc = consumeArgumentLabel(param.FirstName,
@@ -433,7 +452,7 @@ Parser::parseParameterClause(SourceLoc &leftParenLoc,
         status.setIsParseError();
       }
     }
-                        
+
     // '...'?
     if (Tok.isEllipsis()) {
       Tok.setKind(tok::ellipsis);
diff --git a/test/Concurrency/isolated_parameters.swift b/test/Concurrency/isolated_parameters.swift
index 182b3340618..6ae10ea0337 100644
--- a/test/Concurrency/isolated_parameters.swift
+++ b/test/Concurrency/isolated_parameters.swift
@@ -54,3 +54,39 @@ func testIsolatedParamCallsAsync(a: isolated A, b: A) async {
   // expected-note@-1{{calls to global function 'globalFuncIsolated' from outside of its actor context are implicitly asynchronous}}
   await globalFuncIsolated(b)
 }
+
+actor MyActor {
+  func hello() {}
+}
+
+typealias MyFn = (isolated: Int) -> Void // expected-error {{function types cannot have argument labels; use '_' before 'isolated'}}
+typealias MyFnFixed = (_: isolated MyActor) -> Void
+
+func standalone(_: isolated MyActor) {}
+func check() {
+  let _: MyFnFixed = standalone
+  let _: MyFnFixed = { (_: isolated MyActor) in () }
+}
+
+
+@available(SwiftStdlib 5.5, *)
+protocol P {
+  func f(isolated: MyActor) async
+  func g(isolated x: MyActor) async
+  func h(isolated MyActor: isolated MyActor)
+  func i(isolated: isolated MyActor)
+  func j(isolated: Int) -> Int
+  func k(isolated y: Int) -> Int
+  func l(isolated _: Int) -> Int
+}
+
+@available(SwiftStdlib 5.5, *)
+struct S: P {
+  func f(isolated: MyActor) async { await isolated.hello() }
+  func g(isolated x: MyActor) async { await x.hello() }
+  func h(isolated MyActor: isolated MyActor) { i(isolated: MyActor) }
+  func i(isolated: isolated MyActor) { isolated.hello() }
+  func j(isolated: Int) -> Int { return isolated }
+  func k(isolated y: Int) -> Int { return j(isolated: y) }
+  func l(isolated _: Int) -> Int { return k(isolated: 0) }
+}