diff --git a/src/test/java/com/android/tools/r8/desugar/staticinterfacemethod/InlineIntoReprocessedStaticInterfaceMethodTest.java b/src/test/java/com/android/tools/r8/desugar/staticinterfacemethod/InlineIntoReprocessedStaticInterfaceMethodTest.java
new file mode 100644
index 0000000..f11272f
--- /dev/null
+++ b/src/test/java/com/android/tools/r8/desugar/staticinterfacemethod/InlineIntoReprocessedStaticInterfaceMethodTest.java
@@ -0,0 +1,87 @@
+// Copyright (c) 2021, the R8 project authors. Please see the AUTHORS file
+// for details. All rights reserved. Use of this source code is governed by a
+// BSD-style license that can be found in the LICENSE file.
+
+package com.android.tools.r8.desugar.staticinterfacemethod;
+
+import com.android.tools.r8.NeverInline;
+import com.android.tools.r8.TestBase;
+import com.android.tools.r8.TestParameters;
+import com.android.tools.r8.TestParametersCollection;
+import com.android.tools.r8.utils.codeinspector.AssertUtils;
+import org.junit.Test;
+import org.junit.runner.RunWith;
+import org.junit.runners.Parameterized;
+import org.junit.runners.Parameterized.Parameter;
+import org.junit.runners.Parameterized.Parameters;
+
+/** Reproduction for b/196496374. */
+@RunWith(Parameterized.class)
+public class InlineIntoReprocessedStaticInterfaceMethodTest extends TestBase {
+
+  @Parameter(0)
+  public TestParameters parameters;
+
+  @Parameters(name = "{0}")
+  public static TestParametersCollection parameters() {
+    return getTestParameters().withAllRuntimesAndApiLevels().build();
+  }
+
+  @Test
+  public void test() throws Exception {
+    AssertUtils.assertFailsCompilationIf(
+        !parameters.canUseDefaultAndStaticInterfaceMethods(),
+        () ->
+            testForR8(parameters.getBackend())
+                .addInnerClasses(getClass())
+                .addKeepMainRule(Main.class)
+                .enableInliningAnnotations()
+                .setMinApi(parameters.getApiLevel())
+                .compile()
+                .run(parameters.getRuntime(), Main.class)
+                .assertSuccessWithOutputLines("A"));
+  }
+
+  static class Main {
+
+    // Field where all writes are removed by the primary optimization pass. All methods that read
+    // this field will therefore be enqueued for reprocessing in the second optimization pass.
+    public static boolean neverWritten;
+
+    public static void main(String[] args) {
+      if (getFalse()) {
+        neverWritten = args.length > 0;
+      }
+      I.method();
+    }
+
+    static boolean getFalse() {
+      return false;
+    }
+  }
+
+  static class A {
+
+    static void greet() {
+      System.out.println("A");
+    }
+  }
+
+  interface I {
+
+    // Since this method is moved to I's companion class during the primary optimization pass, we
+    // will process the companion method in the second optimization pass, since the body references
+    // the `neverWritten` field.
+    @NeverInline
+    static void method() {
+      if (Main.neverWritten) {
+        // This will be inlined. When building IR for this method in the second optimization pass,
+        // we assert that the outermost caller position is the original signature of the enclosing
+        // method. This only holds if we have correctly recorded that the original signature of the
+        // companion method I$-CC.method() is I.method().
+        System.out.println("Dead...");
+      }
+      A.greet();
+    }
+  }
+}