diff --git a/flang/lib/Evaluate/fold.cpp b/flang/lib/Evaluate/fold.cpp
--- a/flang/lib/Evaluate/fold.cpp
+++ b/flang/lib/Evaluate/fold.cpp
@@ -67,6 +67,7 @@
     FoldingContext &context, StructureConstructor &&structure) {
   StructureConstructor ctor{structure.derivedTypeSpec()};
   bool isConstant{true};
+  auto restorer{context.WithPDTInstance(structure.derivedTypeSpec())};
   for (auto &&[symbol, value] : std::move(structure)) {
     auto expr{Fold(context, std::move(value.value()))};
     if (IsPointer(symbol)) {
diff --git a/flang/test/Semantics/structconst05.f90 b/flang/test/Semantics/structconst05.f90
new file mode 100644
--- /dev/null
+++ b/flang/test/Semantics/structconst05.f90
@@ -0,0 +1,9 @@
+! RUN: %python %S/test_errors.py %s %flang_fc1
+! Ensure that PDT instance structure constructors can be folded to constants
+module m1
+  type :: pdt(k)
+    integer, len :: k
+    character(len=k) :: x, y = "def"
+  end type
+  type(pdt(4)) :: v = pdt(4)("abc")
+end module