diff --git a/src/Lean/Meta/Tactic/Grind/Canon.lean b/src/Lean/Meta/Tactic/Grind/Canon.lean
index dbace94206..e551919a10 100644
--- a/src/Lean/Meta/Tactic/Grind/Canon.lean
+++ b/src/Lean/Meta/Tactic/Grind/Canon.lean
@@ -74,40 +74,53 @@ If `useIsDefEqBounded` is `true`, we try `isDefEqBounded` before returning false
 -/
 private def canonElemCore (parent : Expr) (f : Expr) (i : Nat) (e : Expr) (useIsDefEqBounded : Bool) : GoalM Expr := do
   let s ← get'
-  if let some c := s.canon.find? e then
+  let key := { f, i, arg := e : CanonArgKey }
+  /-
+  **Note**: We used to use `s.canon.find? e` instead of `s.canonArg.find? key`. This was incorrect.
+  First, for types and implicit arguments, we recursively visit `e` before invoking this function.
+  Thus, `s.canon.find? e` always returns some value `c`, causing us to miss possible canonicalization opportunities.
+  Moreover, `e` may be the argument of two different `f` functions.
+  -/
+  if let some c := s.canonArg.find? key then
     return c
-  let key := (f, i)
-  let eType ← inferType e
-  let cs := s.argMap.find? key |>.getD []
-  for (c, cType) in cs do
-    /-
-    We first check the types
-    The following checks are a performance bottleneck.
-    For example, in the test `grind_ite.lean`, there are many checks of the form:
-    ```
-    w_4 ∈ assign.insert v true → Prop =?= w_1 ∈ assign.insert v false → Prop
-    ```
-    where `grind` unfolds the definition of `DHashMap.insert` and `TreeMap.insert`.
-    -/
-    if (← isDefEqD eType cType) then
-      if (← isDefEq e c) then
-        -- We used to check `c.fvarsSubset e` because it is not
-        -- in general safe to replace `e` with `c` if `c` has more free variables than `e`.
-        -- However, we don't revert previously canonicalized elements in the `grind` tactic.
-        -- Moreover, we store the canonicalizer state in the `Goal` because we case-split
-        -- and different locals are added in different branches.
-        modify' fun s => { s with canon := s.canon.insert e c }
-        trace_goal[grind.debug.canon] "found {e} ===> {c}"
-        return c
-      if useIsDefEqBounded then
-        -- If `e` and `c` are not types, we use `isDefEqBounded`
-        if (← isDefEqBounded e c parent) then
+  let c ← go
+  modify' fun s => { s with canonArg := s.canonArg.insert key c }
+  return c
+where
+  go : GoalM Expr := do
+    let s ← get'
+    let key := (f, i)
+    let eType ← inferType e
+    let cs := s.argMap.find? key |>.getD []
+    for (c, cType) in cs do
+      /-
+      We first check the types
+      The following checks are a performance bottleneck.
+      For example, in the test `grind_ite.lean`, there are many checks of the form:
+      ```
+      w_4 ∈ assign.insert v true → Prop =?= w_1 ∈ assign.insert v false → Prop
+      ```
+      where `grind` unfolds the definition of `DHashMap.insert` and `TreeMap.insert`.
+      -/
+      if (← isDefEqD eType cType) then
+        if (← isDefEq e c) then
+          -- We used to check `c.fvarsSubset e` because it is not
+          -- in general safe to replace `e` with `c` if `c` has more free variables than `e`.
+          -- However, we don't revert previously canonicalized elements in the `grind` tactic.
+          -- Moreover, we store the canonicalizer state in the `Goal` because we case-split
+          -- and different locals are added in different branches.
           modify' fun s => { s with canon := s.canon.insert e c }
-          trace_goal[grind.debug.canon] "found using `isDefEqBounded`: {e} ===> {c}"
+          trace_goal[grind.debug.canon] "found {e} ===> {c}"
           return c
-  trace_goal[grind.debug.canon] "({f}, {i}) ↦ {e}"
-  modify' fun s => { s with canon := s.canon.insert e e, argMap := s.argMap.insert key ((e, eType)::cs) }
-  return e
+        if useIsDefEqBounded then
+          -- If `e` and `c` are not types, we use `isDefEqBounded`
+          if (← isDefEqBounded e c parent) then
+            modify' fun s => { s with canon := s.canon.insert e c }
+            trace_goal[grind.debug.canon] "found using `isDefEqBounded`: {e} ===> {c}"
+            return c
+    trace_goal[grind.debug.canon] "({f}, {i}) ↦ {e}"
+    modify' fun s => { s with canon := s.canon.insert e e, argMap := s.argMap.insert key ((e, eType)::cs) }
+    return e
 
 private abbrev canonType (parent f : Expr) (i : Nat) (e : Expr) := withDefault <| canonElemCore parent f i e (useIsDefEqBounded := false)
 private abbrev canonInst (parent f : Expr) (i : Nat) (e : Expr) := withReducibleAndInstances <| canonElemCore parent f i e (useIsDefEqBounded := true)
diff --git a/src/Lean/Meta/Tactic/Grind/Types.lean b/src/Lean/Meta/Tactic/Grind/Types.lean
index d569d223a8..980c6e812d 100644
--- a/src/Lean/Meta/Tactic/Grind/Types.lean
+++ b/src/Lean/Meta/Tactic/Grind/Types.lean
@@ -600,11 +600,18 @@ structure NewRawFact where
   splitSource  : SplitSource
   deriving Inhabited
 
+structure CanonArgKey where
+  f   : Expr
+  i   : Nat
+  arg : Expr
+  deriving BEq, Hashable
+
 /-- Canonicalizer state. See `Canon.lean` for additional details. -/
 structure Canon.State where
   argMap     : PHashMap (Expr × Nat) (List (Expr × Expr)) := {}
   canon      : PHashMap Expr Expr := {}
   proofCanon : PHashMap Expr Expr := {}
+  canonArg   : PHashMap CanonArgKey Expr := {}
   deriving Inhabited
 
 /-- Trace information for a case split. -/
diff --git a/tests/lean/run/grind_canon_bug_2.lean b/tests/lean/run/grind_canon_bug_2.lean
new file mode 100644
index 0000000000..547b0cf42b
--- /dev/null
+++ b/tests/lean/run/grind_canon_bug_2.lean
@@ -0,0 +1,21 @@
+import Std.Data.ExtHashMap
+open Std
+set_option warn.sorry false
+
+-- The following trace should contain only one `m[k]` and `(m.insert 1 3)[k]`
+/--
+trace: [grind.cutsat.model] k := 101
+[grind.cutsat.model] (ExtHashMap.filter (fun k x => decide (101 ≤ k)) (m.insert 1 3))[k] := 4
+[grind.cutsat.model] (m.insert 1 2)[k] := 4
+[grind.cutsat.model] (m.insert 1 3)[k] := 4
+[grind.cutsat.model] m[k] := 4
+[grind.cutsat.model] (m.insert 1 2).getKey k ⋯ := 101
+[grind.cutsat.model] m.getKey k ⋯ := 101
+-/
+#guard_msgs in
+example (m : ExtHashMap Nat Nat) :
+    (m.insert 1 2).filter (fun k _ => k > 1000) = (m.insert 1 3).filter fun k _ => k > 100 := by
+  ext1 k
+  set_option trace.grind.cutsat.model true in
+  fail_if_success grind (splits := 4)
+  sorry