diff --git a/python/python-psi-impl/resources/messages/PyPsiBundle.properties b/python/python-psi-impl/resources/messages/PyPsiBundle.properties
index 38f8fa532027..3529c708d02d 100644
--- a/python/python-psi-impl/resources/messages/PyPsiBundle.properties
+++ b/python/python-psi-impl/resources/messages/PyPsiBundle.properties
@@ -552,6 +552,7 @@ INSP.unexpected.arg=Unexpected argument
 INSP.unexpected.arg(s)=Unexpected argument(s)
 INSP.parameter.unfilled=Parameter ''{0}'' unfilled
 INSP.parameter(s).unfilled=Parameter(s) unfilled
+INSP.incorrect.arguments=Incorrect argument(s)
 INSP.possible.callees=Possible callees
 INSP.function.lacks.positional.argument=Function ''{0}'' lacks a positional argument
 INSP.expected.dict.got.type=Expected a dictionary, got {0}
diff --git a/python/python-psi-impl/src/com/jetbrains/python/inspections/PyArgumentListInspection.java b/python/python-psi-impl/src/com/jetbrains/python/inspections/PyArgumentListInspection.java
index 8633e675afea..c5921f95790f 100644
--- a/python/python-psi-impl/src/com/jetbrains/python/inspections/PyArgumentListInspection.java
+++ b/python/python-psi-impl/src/com/jetbrains/python/inspections/PyArgumentListInspection.java
@@ -122,8 +122,20 @@ public final class PyArgumentListInspection extends PyInspection {
       }
     }
 
-    highlightUnexpectedArguments(node, holder, mappings, context);
-    highlightUnfilledParameters(node, holder, mappings, context);
+    if (!mappings.isEmpty()) {
+      boolean specificMismatchKindReported = false;
+      if (ContainerUtil.all(mappings, mapping -> !mapping.getUnmappedArguments().isEmpty())) {
+        highlightUnexpectedArguments(node, holder, mappings, context);
+        specificMismatchKindReported = true;
+      }
+      if (ContainerUtil.all(mappings, mapping -> !mapping.getUnmappedParameters().isEmpty())) {
+        highlightUnfilledParameters(node, holder, mappings, context);
+        specificMismatchKindReported = true;
+      }
+      if (!specificMismatchKindReported && ContainerUtil.all(mappings, mapping -> !mapping.isComplete())) {
+        highlightIncorrectArguments(node, holder, mappings, context);
+      }
+    }
     highlightStarArgumentTypeMismatch(node, holder, context);
   }
 
@@ -224,8 +236,6 @@ public final class PyArgumentListInspection extends PyInspection {
                                                    @NotNull ProblemsHolder holder,
                                                    @NotNull List<PyCallExpression.PyArgumentsMapping> mappings,
                                                    @NotNull TypeEvalContext context) {
-    if (mappings.isEmpty() || mappings.stream().anyMatch(mapping -> mapping.getUnmappedArguments().isEmpty())) return;
-
     if (mappings.size() == 1) {
       // if there is only one mapping, we could suggest quick fixes
       final Set<String> duplicateKeywords = getDuplicateKeywordArguments(node);
@@ -270,8 +280,6 @@ public final class PyArgumentListInspection extends PyInspection {
                                                   @NotNull ProblemsHolder holder,
                                                   @NotNull List<PyCallExpression.PyArgumentsMapping> mappings,
                                                   @NotNull TypeEvalContext context) {
-    if (mappings.isEmpty() || mappings.stream().anyMatch(mapping -> mapping.getUnmappedParameters().isEmpty())) return;
-
     Optional
       .ofNullable(node.getNode())
       .map(astNode -> astNode.findChildByType(PyTokenTypes.RPAR))
@@ -296,6 +304,16 @@ public final class PyArgumentListInspection extends PyInspection {
       );
   }
 
+  private static void highlightIncorrectArguments(@NotNull PyArgumentList node,
+                                                  @NotNull ProblemsHolder holder,
+                                                  @NotNull List<PyCallExpression.PyArgumentsMapping> mappings,
+                                                  @NotNull TypeEvalContext context) {
+    holder.registerProblem(
+      node,
+      addPossibleCalleesRepresentation(PyPsiBundle.message("INSP.incorrect.arguments"), mappings, context, holder.isOnTheFly())
+    );
+  }
+
   @NlsSafe
   @NotNull
   private static String addPossibleCalleesRepresentation(@NotNull @InspectionMessage String prefix,
diff --git a/python/testData/inspections/PyArgumentListInspection/mismatchedConditionalImplementationsHaveBothTooFewAndTooManyParameters.py b/python/testData/inspections/PyArgumentListInspection/mismatchedConditionalImplementationsHaveBothTooFewAndTooManyParameters.py
new file mode 100644
index 000000000000..79792d33acbc
--- /dev/null
+++ b/python/testData/inspections/PyArgumentListInspection/mismatchedConditionalImplementationsHaveBothTooFewAndTooManyParameters.py
@@ -0,0 +1,8 @@
+if undefined:
+    def f(x):
+        pass
+else:
+    def f(x, y, z):
+        pass
+
+f<warning descr="Incorrect argument(s)Possible callees:f(x)f(x, y, z)">(1, 2)</warning>
\ No newline at end of file
diff --git a/python/testData/inspections/PyArgumentListInspection/mismatchedOverloadsHaveBothTooFewAndTooManyParameters.py b/python/testData/inspections/PyArgumentListInspection/mismatchedOverloadsHaveBothTooFewAndTooManyParameters.py
new file mode 100644
index 000000000000..9a1a3cd96d7a
--- /dev/null
+++ b/python/testData/inspections/PyArgumentListInspection/mismatchedOverloadsHaveBothTooFewAndTooManyParameters.py
@@ -0,0 +1,17 @@
+from typing import overload, Optional
+
+@overload
+def mouse_event(x1: int, y1: int) -> None: ...
+@overload
+def mouse_event(x1: int, y1: int, x2: int, y2: int, y3: int) -> None: ...
+
+def mouse_event(x1: int, y1: int, x2: Optional[int] = None, y2: Optional[int] = None, y3: Optional[int] = None) -> int:
+    pass
+
+
+mouse_event(1<warning descr="Parameter(s) unfilledPossible callees:mouse_event(x1: int, y1: int)mouse_event(x1: int, y1: int, x2: int, y2: int, y3: int)">)</warning>                 # Parameters unfilled
+mouse_event(1, 2)              # OK
+mouse_event<warning descr="Incorrect argument(s)Possible callees:mouse_event(x1: int, y1: int)mouse_event(x1: int, y1: int, x2: int, y2: int, y3: int)">(1, 2, 3)</warning>           # OK (it shouldn't be)
+mouse_event<warning descr="Incorrect argument(s)Possible callees:mouse_event(x1: int, y1: int)mouse_event(x1: int, y1: int, x2: int, y2: int, y3: int)">(1, 2, 3, 4)</warning>        # OK (it shouldn't be)
+mouse_event(1, 2, 3, 4, 5)     # OK
+mouse_event<warning descr="Unexpected argument(s)Possible callees:mouse_event(x1: int, y1: int)mouse_event(x1: int, y1: int, x2: int, y2: int, y3: int)">(1, 2, 3, 4, 5, 6)</warning>  # Unexpected argument(s)
\ No newline at end of file
diff --git a/python/testSrc/com/jetbrains/python/inspections/Py3ArgumentListInspectionTest.java b/python/testSrc/com/jetbrains/python/inspections/Py3ArgumentListInspectionTest.java
index 10283e9ae6b3..b8985da994be 100644
--- a/python/testSrc/com/jetbrains/python/inspections/Py3ArgumentListInspectionTest.java
+++ b/python/testSrc/com/jetbrains/python/inspections/Py3ArgumentListInspectionTest.java
@@ -366,4 +366,14 @@ public class Py3ArgumentListInspectionTest extends PyInspectionTestCase {
   public void testInitByDataclassTransformOnMetaClass() {
     doMultiFileTest();
   }
+
+  // PY-42137
+  public void testMismatchedOverloadsHaveBothTooFewAndTooManyParameters() {
+    doTest();
+  }
+
+  // PY-42137
+  public void testMismatchedConditionalImplementationsHaveBothTooFewAndTooManyParameters() {
+    doTest();
+  }
 }