diff --git a/RELEASES.md b/RELEASES.md
index 33d3b3017f..317a7c153d 100644
--- a/RELEASES.md
+++ b/RELEASES.md
@@ -115,3 +115,12 @@ def Array.insertAtAux (i : Nat) (as : Array α) (j : Nat) : Array α :=
 ```
 
 * Add support for `for h : x in xs do ...` notation where `h : x ∈ xs`. This is mainly useful for showing termination.
+
+* Auto implicit behavior changed for inductive families. An auto implicit argument occurring in inductive family index is also treated as an index. For example
+```lean
+inductive HasType : Index n → Vector Ty n → Ty → Type where
+```
+is now interpreted as
+```lean
+inductive HasType : {n : Nat} → Index n → Vector Ty n → Ty → Type where
+```
diff --git a/src/Lean/Elab/Inductive.lean b/src/Lean/Elab/Inductive.lean
index 9d37683985..f7efa07499 100644
--- a/src/Lean/Elab/Inductive.lean
+++ b/src/Lean/Elab/Inductive.lean
@@ -79,10 +79,13 @@ private partial def elabHeaderAux (views : Array InductiveView) (i : Nat) (acc :
         let params ← Term.addAutoBoundImplicits params
         pure <| acc.push { lctx := (← getLCtx), localInsts := (← getLocalInstances), params := params, type := type, view := view }
       | some typeStx =>
-        let type ← Term.elabType typeStx
-        unless (← isTypeFormerType type) do
-          throwErrorAt typeStx "invalid inductive type, resultant type is not a sort"
-        Term.synthesizeSyntheticMVarsNoPostponing
+        let type ← Term.withAutoBoundImplicit do
+          let type ← Term.elabType typeStx
+          unless (← isTypeFormerType type) do
+            throwErrorAt typeStx "invalid inductive type, resultant type is not a sort"
+          Term.synthesizeSyntheticMVarsNoPostponing
+          let indices ← Term.addAutoBoundImplicits #[]
+          mkForallFVars indices type
         let params ← Term.addAutoBoundImplicits params
         pure <| acc.push { lctx := (← getLCtx), localInsts := (← getLocalInstances), params := params, type := type, view := view }
     elabHeaderAux views (i+1) acc
diff --git a/tests/lean/run/interp.lean b/tests/lean/run/interp.lean
new file mode 100644
index 0000000000..ec655656c4
--- /dev/null
+++ b/tests/lean/run/interp.lean
@@ -0,0 +1,69 @@
+inductive Vector (α : Type u) : Nat → Type u
+  | nil : Vector α 0
+  | cons : α → Vector α n → Vector α (n+1)
+
+infix:67 (priority := high) " :: " => Vector.cons
+
+inductive Index : Nat → Type
+  | zero : Index (n+1)
+  | succ : Index n → Index (n+1)
+
+instance : OfNat (Index (n+1)) (nat_lit 0) where
+  ofNat := Index.zero
+
+inductive Ty where
+  | int
+  | bool
+  | fn (a ty : Ty)
+
+@[reducible] def Ty.interp : Ty → Type
+  | int    => Int
+  | bool   => Bool
+  | fn a b => a.interp → b.interp
+
+inductive HasType : Index n → Vector Ty n → Ty → Type where
+  | stop {ctx : Vector Ty n} : HasType 0 (ty :: ctx) ty
+  | pop  {ctx : Vector Ty n} : HasType k ctx ty → HasType k.succ (u :: ctx) ty
+
+open HasType (stop pop)
+
+inductive Expr : Vector Ty n → Ty → Type where
+  | var {ctx : Vector Ty n} : HasType i ctx ty → Expr ctx ty
+  | val {ctx : Vector Ty n} : Int → Expr ctx Ty.int
+  | lam {ctx : Vector Ty n} : Expr (a :: ctx) ty → Expr ctx (Ty.fn a ty)
+  | app {ctx : Vector Ty n} : Expr ctx (Ty.fn a ty) → Expr ctx a → Expr ctx ty
+  | op  {ctx : Vector Ty n} : (a.interp → b.interp → c.interp) → Expr ctx a → Expr ctx b → Expr ctx c
+  | ife {ctx : Vector Ty n} : Expr ctx Ty.bool → (Unit → Expr ctx a) → (Unit → Expr ctx a) → Expr ctx a
+
+inductive Env : Vector Ty n → Type where
+  | nil  : Env Vector.nil
+  | cons {ctx : Vector Ty n} : Ty.interp a → Env ctx → Env (a :: ctx)
+
+def Env.lookup : {ctx : Vector Ty n} → HasType i ctx ty → Env ctx → ty.interp
+  | _, stop,  Env.cons x xs => x
+  | _, pop k, Env.cons x xs => lookup k xs
+
+def Expr.interp {ctx : Vector Ty n} (env : Env ctx) : Expr ctx ty → ty.interp
+  | var i     => env.lookup i
+  | val x     => x
+  | lam b     => fun x => b.interp (Env.cons x env)
+  | app f a   => f.interp env (a.interp env)
+  | op o x y  => o (x.interp env) (y.interp env)
+  | ife c t e => if c.interp env then t () |>.interp env else e () |>.interp env
+
+open Expr
+
+/- Examples -/
+
+def add {ctx : Vector Ty n} : Expr ctx (Ty.fn Ty.int (Ty.fn Ty.int Ty.int)) :=
+  lam (lam (op (.+.) (var stop) (var (pop stop))))
+
+#eval add.interp Env.nil 10 20
+
+def fact {ctx : Vector Ty n} : Expr ctx (Ty.fn Ty.int Ty.int) :=
+  lam (ife (op (.==.) (var stop) (val 0))
+           (fun _ => val 1)
+           (fun _ => op (.*.) (app fact (op (.-.) (var stop) (val 1))) (var stop)))
+  decreasing_by sorry
+
+#eval fact.interp Env.nil 10
diff --git a/tests/lean/run/splitIssue.lean b/tests/lean/run/splitIssue.lean
index edb1d2bbe3..dcae8155e5 100644
--- a/tests/lean/run/splitIssue.lean
+++ b/tests/lean/run/splitIssue.lean
@@ -1,4 +1,4 @@
-inductive ListSplit : List α → Type _
+inductive ListSplit {α : Type u} : List α → Type u
   | split l₁ l₂ : ListSplit (l₁ ++ l₂)
 
 def splitList {α : Type _} : (l : List α) → ListSplit l