diff --git a/src/lang/base/TypeUtil.ml b/src/lang/base/TypeUtil.ml
index 882da4b80..638f14eb0 100644
--- a/src/lang/base/TypeUtil.ml
+++ b/src/lang/base/TypeUtil.ml
@@ -243,17 +243,39 @@ module TypeUtilities
     | PolyFun _ -> false
     | _ -> true
 
-  let rec is_storable_type t = match t with 
-    | FunType _ -> false
-    | MapType (kt, vt) -> is_storable_type kt && is_storable_type vt
-    | TypeVar _ -> false
-    | ADT (_, ts) -> List.for_all ~f:(fun t -> is_storable_type t) ts
-    | PolyFun _ -> false
-    | Unit -> false
-    | PrimType _ ->
-      (* Messages/Events when stored or passed in messages cannot be analyzed,
-       * leading to potential badly constructed Messages/Events. So we disallow. *)
-      not (t = PrimTypes.msg_typ || t = PrimTypes.event_typ)
+  let is_storable_type t =
+    let rec storable_helper t seen_adts =
+      match t with 
+      | FunType _ -> false
+      | MapType (kt, vt) -> storable_helper kt seen_adts && storable_helper vt seen_adts
+      | TypeVar _ ->
+          (* If we are inside an ADT, then type variable 
+             instantiations are handled outside *)
+          (match seen_adts with
+           | [] -> false 
+           | _  -> true)
+      | ADT (tname, ts) ->
+          (match List.findi ~f:(fun _ seen -> seen = tname) seen_adts with
+           | Some _ -> true (* Inductive ADT - ignore this branch *)
+           | None ->
+               (* Check that ADT is storable *)
+               match DataTypeDictionary.lookup_name tname with
+               | Error _ -> false (* Handle errors outside *)
+               | Ok adt -> 
+                   let adt_storable =
+                     List.for_all ~f:(fun (_, carg_list) ->
+                         List.for_all ~f:(fun carg ->
+                             storable_helper carg (tname :: seen_adts))
+                           carg_list)
+                       adt.tmap in
+                   adt_storable && List.for_all ~f:(fun t -> storable_helper t seen_adts) ts)
+      | PolyFun _ -> false
+      | Unit -> false
+      | PrimType _ ->
+          (* Messages/Events when stored or passed in messages cannot be analyzed,
+           * leading to potential badly constructed Messages/Events. So we disallow. *)
+          not (t = PrimTypes.msg_typ || t = PrimTypes.event_typ) in
+    storable_helper t []
 
   let get_msgevnt_type m =
     if (List.exists ~f:(fun (s, _) -> s = ContractUtil.MessagePayload.tag_label) m)
diff --git a/tests/checker/bad/TestCheckerFail.ml b/tests/checker/bad/TestCheckerFail.ml
index 1cf18a628..6a4c322d0 100644
--- a/tests/checker/bad/TestCheckerFail.ml
+++ b/tests/checker/bad/TestCheckerFail.ml
@@ -49,6 +49,7 @@ module Tests = TestUtil.DiffBasedTests(
       "bad_adt_2.scilla";
       "bad_adt_3.scilla";
       "bad_adt_4.scilla";
+      "unstorable_adt.scilla";
     ]
     let exit_code : Unix.process_status = WEXITED 1
   end)
diff --git a/tests/checker/bad/gold/unstorable_adt.scilla.gold b/tests/checker/bad/gold/unstorable_adt.scilla.gold
new file mode 100644
index 000000000..fc6c11425
--- /dev/null
+++ b/tests/checker/bad/gold/unstorable_adt.scilla.gold
@@ -0,0 +1,29 @@
+{
+  "errors": [
+    {
+      "error_message": "Type error(s) in contract UnstorableADT:\n",
+      "start_location": {
+        "file": "checker/bad/unstorable_adt.scilla",
+        "line": 15,
+        "column": 10
+      },
+      "end_location": { "file": "", "line": 0, "column": 0 }
+    },
+    {
+      "error_message": "Type error in field last_input:\n",
+      "start_location": {
+        "file": "checker/bad/unstorable_adt.scilla",
+        "line": 19,
+        "column": 7
+      },
+      "end_location": { "file": "", "line": 0, "column": 0 }
+    },
+    {
+      "error_message":
+        "Values of the type \"Option (Test)\" cannot be stored.",
+      "start_location": { "file": "", "line": 0, "column": 0 },
+      "end_location": { "file": "", "line": 0, "column": 0 }
+    }
+  ],
+  "warnings": []
+}
\ No newline at end of file
diff --git a/tests/checker/bad/unstorable_adt.scilla b/tests/checker/bad/unstorable_adt.scilla
new file mode 100644
index 000000000..7ab6f8b03
--- /dev/null
+++ b/tests/checker/bad/unstorable_adt.scilla
@@ -0,0 +1,19 @@
+scilla_version 0
+
+(***************************************************)
+(*               Associated library                *)
+(***************************************************)
+
+library UnstorableADT
+
+type Test =
+  | Bad of (Uint32 -> Uint32)
+
+(***************************************************)
+(*             The contract definition             *)
+(***************************************************)
+contract UnstorableADT
+(
+)
+
+field last_input : Option Test = None {Test}