diff --git a/src/cmd/compile/internal/gc/inl.go b/src/cmd/compile/internal/gc/inl.go
index a2fb00e132..137675aa20 100644
--- a/src/cmd/compile/internal/gc/inl.go
+++ b/src/cmd/compile/internal/gc/inl.go
@@ -574,13 +574,11 @@ func inlnode(n *Node, maxCost int32, inlMap map[*Node]bool) *Node {
 	}
 
 	switch n.Op {
-	// inhibit inlining of their argument
 	case ODEFER, OGO:
 		switch n.Left.Op {
 		case OCALLFUNC, OCALLMETH:
 			n.Left.SetNoInline(true)
 		}
-		return n
 
 	// TODO do them here (or earlier),
 	// so escape analysis can avoid more heapmoves.
diff --git a/test/inline.go b/test/inline.go
index 9b75bc5065..470414f883 100644
--- a/test/inline.go
+++ b/test/inline.go
@@ -246,3 +246,20 @@ func ii() { // ERROR "can inline ii"
 	f := getMeth(t1) // ERROR "inlining call to getMeth" "t1.meth does not escape"
 	_ = f(3)
 }
+
+// Issue #42194 - make sure that functions evaluated in
+// go and defer statements can be inlined.
+func gd1(int) {
+	defer gd1(gd2()) // ERROR "inlining call to gd2"
+	defer gd3()()    // ERROR "inlining call to gd3"
+	go gd1(gd2())    // ERROR "inlining call to gd2"
+	go gd3()()       // ERROR "inlining call to gd3"
+}
+
+func gd2() int { // ERROR "can inline gd2"
+	return 1
+}
+
+func gd3() func() { // ERROR "can inline gd3"
+	return ii
+}