diff --git a/pyrefly/lib/alt/class/class_field.rs b/pyrefly/lib/alt/class/class_field.rs
index e2793f3fa9..1915c6294c 100644
--- a/pyrefly/lib/alt/class/class_field.rs
+++ b/pyrefly/lib/alt/class/class_field.rs
@@ -4089,7 +4089,22 @@ impl<'a, Ans: LookupAnswer> AnswersSolver<'a, Ans> {
             } else {
                 Instance::of_class(cls)
             };
-            Arc::unwrap_or_clone(new_member.value).as_raw_special_method_type(self.heap, &instance)
+            let assume_self_return = new_member.value.is_function_without_return_annotation();
+            let mut new_ty = Arc::unwrap_or_clone(new_member.value)
+                .as_raw_special_method_type(self.heap, &instance)?;
+            if assume_self_return {
+                // Per the constructor typing spec, unannotated `__new__` may be assumed to
+                // return `Self` for constructor analysis.
+                let ret = if preserve_self {
+                    self.heap.mk_self_type(cls.clone())
+                } else {
+                    self.heap.mk_class_type(cls.clone())
+                };
+                new_ty.transform_toplevel_callable(&mut |callable: &mut Callable| {
+                    callable.ret = ret.clone();
+                });
+            }
+            Some(new_ty)
         }
     }
 
diff --git a/pyrefly/lib/test/attributes.rs b/pyrefly/lib/test/attributes.rs
index c2ca21d44d..b899f8e4ac 100644
--- a/pyrefly/lib/test/attributes.rs
+++ b/pyrefly/lib/test/attributes.rs
@@ -1189,7 +1189,7 @@ class C:
         if orig_func is None:
             return super().__new__(cls)
 def f():
-    with C():  # E: `NoneType` has no attribute `__enter__`  # E: `NoneType` has no attribute `__exit__`
+    with C():
         pass
     "#,
 );
diff --git a/pyrefly/lib/test/constructors.rs b/pyrefly/lib/test/constructors.rs
index 22b268a654..29cc5c4cb3 100644
--- a/pyrefly/lib/test/constructors.rs
+++ b/pyrefly/lib/test/constructors.rs
@@ -989,6 +989,31 @@ C("5")  # E: Argument `Literal['5']` is not assignable to parameter `x` with typ
     "#,
 );
 
+// Regression test for a problem in networkx: https://github.com/facebook/pyrefly/issues/3121
+testcase!(
+    test_return_type_inference_for_constructors,
+    r#"
+from typing import assert_type
+
+class A:
+    def __new__(cls, x: int | None = None):
+        if x is None:
+            return cls.__new__(cls, 5)
+        else:
+            return object.__new__(cls)
+    
+    def __init__(cls):
+        return "x"
+
+class B(A): ...
+
+a = A()
+assert_type(a, A)
+b = B()
+assert_type(b, B)
+"#,
+);
+
 testcase!(
     test_redundant_dict_constructor_call_ok,
     r#"