diff --git a/.chronus/changes/fix-string-template-fn-call-template-decl-2026-6-23.md b/.chronus/changes/fix-string-template-fn-call-template-decl-2026-6-23.md
new file mode 100644
index 00000000000..1b07d5b0959
--- /dev/null
+++ b/.chronus/changes/fix-string-template-fn-call-template-decl-2026-6-23.md
@@ -0,0 +1,7 @@
+---
+changeKind: fix
+packages:
+  - "@typespec/compiler"
+---
+
+Fix `Expected type.` internal compiler error when a string template interpolates a function call that references a template parameter on a template declaration (e.g. `@doc("${myFn(T)}") model Crud<T extends Reflection.Model> {}`). The deferred function call now defers the whole template, which is evaluated at instantiation.
diff --git a/packages/compiler/src/core/checker.ts b/packages/compiler/src/core/checker.ts
index 5552a5cb762..9d2510047ba 100644
--- a/packages/compiler/src/core/checker.ts
+++ b/packages/compiler/src/core/checker.ts
@@ -145,6 +145,7 @@ import {
   StringTemplateMiddleNode,
   StringTemplateSpan,
   StringTemplateSpanLiteral,
+  StringTemplateSpanNode,
   StringTemplateSpanValue,
   StringTemplateTailNode,
   StringValue,
@@ -4677,31 +4678,42 @@ export function createChecker(program: Program, resolver: NameResolver): Checker
   ): IndeterminateEntity | StringValue | null {
     let hasType = false;
     let hasValue = false;
-    const spanTypeOrValues = node.spans.map(
-      (span) => [span, checkNode(ctx, span.expression)] as const,
-    );
+    const spanTypeOrValues: (readonly [
+      StringTemplateSpanNode,
+      Type | Value | IndeterminateEntity,
+    ])[] = [];
+    for (const span of node.spans) {
+      const typeOrValue = checkNode(ctx, span.expression);
+      // A null span is the value-world equivalent of `errorType`: the expression couldn't
+      // produce a usable value (e.g. an already-reported error, or a function call that can't
+      // be evaluated yet in a template declaration). Like `checkArrayValue`/`checkObjectValue`,
+      // propagate the null up so the whole template resolves to null instead of fabricating a
+      // partial string. It is re-evaluated against the real value when the template is instantiated.
+      if (typeOrValue === null) {
+        return null;
+      }
+      spanTypeOrValues.push([span, typeOrValue]);
+    }
+
     for (const [_, typeOrValue] of spanTypeOrValues) {
-      if (typeOrValue !== null) {
-        if (isValue(typeOrValue)) {
-          hasValue = true;
-        } else if (
-          "kind" in typeOrValue &&
-          (typeOrValue.kind === "TemplateParameter" ||
-            typeOrValue.kind === "TemplateParameterAccess")
-        ) {
-          if (typeOrValue.constraint) {
-            if (typeOrValue.constraint.valueType) {
-              hasValue = true;
-            }
-            if (typeOrValue.constraint.type) {
-              hasType = true;
-            }
-          } else {
+      if (isValue(typeOrValue)) {
+        hasValue = true;
+      } else if (
+        "kind" in typeOrValue &&
+        (typeOrValue.kind === "TemplateParameter" || typeOrValue.kind === "TemplateParameterAccess")
+      ) {
+        if (typeOrValue.constraint) {
+          if (typeOrValue.constraint.valueType) {
+            hasValue = true;
+          }
+          if (typeOrValue.constraint.type) {
             hasType = true;
           }
         } else {
           hasType = true;
         }
+      } else {
+        hasType = true;
       }
     }
 
@@ -4719,12 +4731,11 @@ export function createChecker(program: Program, resolver: NameResolver): Checker
       let str = node.head.value;
       for (const [span, typeOrValue] of spanTypeOrValues) {
         if (
-          typeOrValue !== null &&
-          (!("kind" in typeOrValue) ||
-            (typeOrValue.kind !== "TemplateParameter" &&
-              typeOrValue.kind !== "TemplateParameterAccess"))
+          !("kind" in typeOrValue) ||
+          (typeOrValue.kind !== "TemplateParameter" &&
+            typeOrValue.kind !== "TemplateParameterAccess")
         ) {
-          compilerAssert(typeOrValue !== null && isValue(typeOrValue), "Expected value.");
+          compilerAssert(isValue(typeOrValue), "Expected value.");
           str += stringifyValueForTemplate(typeOrValue);
         }
         str += span.literal.value;
@@ -4737,7 +4748,7 @@ export function createChecker(program: Program, resolver: NameResolver): Checker
       const spans: StringTemplateSpan[] = [createTemplateSpanLiteral(node.head)];
 
       for (const [span, typeOrValue] of spanTypeOrValues) {
-        compilerAssert(typeOrValue !== null && !isValue(typeOrValue), "Expected type.");
+        compilerAssert(!isValue(typeOrValue), "Expected type.");
 
         const type = typeOrValue.entityKind === "Indeterminate" ? typeOrValue.type : typeOrValue;
         const spanValue = createTemplateSpanValue(span.expression, type);
diff --git a/packages/compiler/test/checker/string-template.test.ts b/packages/compiler/test/checker/string-template.test.ts
index fb8e5247417..77632cb0fb4 100644
--- a/packages/compiler/test/checker/string-template.test.ts
+++ b/packages/compiler/test/checker/string-template.test.ts
@@ -1,10 +1,11 @@
 import { strictEqual } from "assert";
 import { describe, it } from "vitest";
-import { StringTemplate } from "../../src/index.js";
+import { getDoc, StringTemplate } from "../../src/index.js";
 import {
   expectDiagnosticEmpty,
   expectDiagnostics,
   extractSquiggles,
+  mockFile,
   t,
 } from "../../src/testing/index.js";
 import { Tester } from "../tester.js";
@@ -164,3 +165,45 @@ it("emit error if interpolating template access that mixes values and types", as
     end,
   });
 });
+
+describe("interpolating a function call referencing a template parameter", () => {
+  const fnTester = Tester.files({
+    "fn.js": mockFile.js({
+      $functions: {
+        "": {
+          getName: (_ctx: unknown, type: { name?: string }) => type?.name ?? "deferred",
+        },
+      },
+    }),
+  })
+    .import("./fn.js")
+    .using("TypeSpec.Reflection");
+
+  it("does not crash when used on a template declaration", async () => {
+    const diagnostics = await fnTester.diagnose(`
+      #suppress "experimental-feature" "test"
+      extern fn getName(type: unknown): valueof string;
+
+      @doc("\${getName(T)}")
+      model Crud<T extends Model> {}
+    `);
+    expectDiagnosticEmpty(diagnostics);
+  });
+
+  it("resolves the function call when the template is instantiated", async () => {
+    const { p, program } = await fnTester.compile(t.code`
+      #suppress "experimental-feature" "test"
+      extern fn getName(type: unknown): valueof string;
+
+      @doc("\${getName(T)}")
+      model Crud<T extends Model> {}
+
+      model Foo {}
+
+      model Holder {
+        ${t.modelProperty("p")}: Crud<Foo>;
+      }
+    `);
+    strictEqual(getDoc(program, p.type), "Foo");
+  });
+});