diff --git a/flang/include/flang/Evaluate/check-expression.h b/flang/include/flang/Evaluate/check-expression.h
--- a/flang/include/flang/Evaluate/check-expression.h
+++ b/flang/include/flang/Evaluate/check-expression.h
@@ -48,6 +48,8 @@
 // expressions, including BOZ literals.
 template <typename A> bool IsActuallyConstant(const A &);
 extern template bool IsActuallyConstant(const Expr<SomeType> &);
+extern template bool IsActuallyConstant(const Expr<SomeInteger> &);
+extern template bool IsActuallyConstant(const Expr<SubscriptInteger> &);
 
 // Checks whether an expression is an object designator with
 // constant addressing and no vector-valued subscript.
diff --git a/flang/lib/Evaluate/check-expression.cpp b/flang/lib/Evaluate/check-expression.cpp
--- a/flang/lib/Evaluate/check-expression.cpp
+++ b/flang/lib/Evaluate/check-expression.cpp
@@ -192,6 +192,8 @@
 }
 
 template bool IsActuallyConstant(const Expr<SomeType> &);
+template bool IsActuallyConstant(const Expr<SomeInteger> &);
+template bool IsActuallyConstant(const Expr<SubscriptInteger> &);
 
 // Object pointer initialization checking predicate IsInitialDataTarget().
 // This code determines whether an expression is allowable as the static
diff --git a/flang/lib/Semantics/type.cpp b/flang/lib/Semantics/type.cpp
--- a/flang/lib/Semantics/type.cpp
+++ b/flang/lib/Semantics/type.cpp
@@ -425,11 +425,28 @@
   }
 }
 
+/// Fold explicit length parameters of character components when the explicit
+/// expression is a constant expression (if it only depends on KIND parameters).
+/// Do not fold `character(len=pdt_length)`, even if the length parameter is
+/// constant in the pdt instantiation, in order to avoid losing the information
+/// that the character component is automatic (and must be a descriptor).
+static ParamValue FoldCharacterLength(evaluate::FoldingContext &foldingContext,
+    const CharacterTypeSpec &characterSpec) {
+  if (const auto &len{characterSpec.length().GetExplicit()}) {
+    if (evaluate::IsConstantExpr(*len)) {
+      return ParamValue{evaluate::Fold(foldingContext, common::Clone(*len)),
+          common::TypeParamAttr::Len};
+    }
+  }
+  return characterSpec.length();
+}
+
 // Apply type parameter values to an intrinsic type spec.
 const DeclTypeSpec &InstantiateHelper::InstantiateIntrinsicType(
     SourceName symbolName, const DeclTypeSpec &spec) {
   const IntrinsicTypeSpec &intrinsic{DEREF(spec.AsIntrinsic())};
-  if (evaluate::ToInt64(intrinsic.kind())) {
+  if (spec.category() != DeclTypeSpec::Character &&
+      evaluate::IsActuallyConstant(intrinsic.kind())) {
     return spec; // KIND is already a known constant
   }
   // The expression was not originally constant, but now it must be so
@@ -454,7 +471,8 @@
     return scope_.MakeLogicalType(KindExpr{kind});
   case DeclTypeSpec::Character:
     return scope_.MakeCharacterType(
-        ParamValue{spec.characterTypeSpec().length()}, KindExpr{kind});
+        FoldCharacterLength(foldingContext(), spec.characterTypeSpec()),
+        KindExpr{kind});
   default:
     CRASH_NO_CASE;
   }
diff --git a/flang/test/Lower/derived-types-kind-params.f90 b/flang/test/Lower/derived-types-kind-params.f90
--- a/flang/test/Lower/derived-types-kind-params.f90
+++ b/flang/test/Lower/derived-types-kind-params.f90
@@ -31,13 +31,13 @@
 ! -----------------------------------------------------------------------------
 
   ! CHECK-LABEL: func @_QMmPfoo
-  ! CHECK-SAME: !fir.ref<!fir.type<_QMmTtK7K12{c:!fir.array<12x!fir.char<1,?>>
+  ! CHECK-SAME: !fir.ref<!fir.type<_QMmTtK7K12{c:!fir.array<12x!fir.char<1,7>>
   subroutine foo(at)
     type(t(k2=12)) :: at
   end subroutine
 
   ! CHECK-LABEL: func @_QMmPfoo2
-  ! CHECK-SAME: !fir.ref<!fir.type<_QMmTt2K12K13{at:!fir.type<_QMmTtK15K17{c:!fir.array<17x!fir.char<1,?>>}>}>>
+  ! CHECK-SAME: !fir.ref<!fir.type<_QMmTt2K12K13{at:!fir.type<_QMmTtK15K17{c:!fir.array<17x!fir.char<1,15>>}>}>>
   subroutine foo2(at2)
     type(t2(12, 13)) :: at2
   end subroutine
diff --git a/flang/test/Semantics/offsets02.f90 b/flang/test/Semantics/offsets02.f90
--- a/flang/test/Semantics/offsets02.f90
+++ b/flang/test/Semantics/offsets02.f90
@@ -52,3 +52,13 @@
   !CHECK: d3 size=24 offset=40:
   type(t(4, 20)) :: x4
 end
+
+subroutine s4
+  type t(k)
+    integer, kind :: k
+    character(len=k) :: c
+  end type
+  type(t(7)) :: x4
+  !CHECK: DerivedType scope: size=7 alignment=1 instantiation of t(k=7_4)
+  !CHECK: c size=7 offset=0: ObjectEntity type: CHARACTER(7_4,1)
+end subroutine