diff --git a/src/fsharp/IlxGen.fs b/src/fsharp/IlxGen.fs
index 98e51366088..03f891e6870 100644
--- a/src/fsharp/IlxGen.fs
+++ b/src/fsharp/IlxGen.fs
@@ -7552,8 +7552,26 @@ and GenModuleDef cenv (cgbuf: CodeGenBuffer) qname lazyInitInfo eenv x =
                 GenExnDef cenv cgbuf.mgbuf eenvinner m tc
             else
                 GenTypeDef cenv cgbuf.mgbuf lazyInitInfo eenvinner m tc
-        for mbind in mbinds do
-            GenModuleBinding cenv cgbuf qname lazyInitInfo eenvinner m mbind
+
+        // Generate chunks of non-nested bindings together to allow recursive fixups.
+        let mutable bindsRemaining = mbinds 
+        while not bindsRemaining.IsEmpty do
+            match bindsRemaining with 
+            | ModuleOrNamespaceBinding.Binding _ :: _ -> 
+                let recBinds =
+                    bindsRemaining
+                    |> List.takeWhile (function ModuleOrNamespaceBinding.Binding _ -> true | _ -> false)
+                    |> List.map (function ModuleOrNamespaceBinding.Binding recBind -> recBind | _ -> failwith "unexpected")
+                let otherBinds =
+                    bindsRemaining
+                    |> List.skipWhile (function ModuleOrNamespaceBinding.Binding _ -> true | _ -> false) 
+                GenLetRecBindings cenv cgbuf eenv (recBinds, m)
+                bindsRemaining <- otherBinds
+            | (ModuleOrNamespaceBinding.Module _ as mbind) :: rest ->
+                GenModuleBinding cenv cgbuf qname lazyInitInfo eenvinner m mbind
+                bindsRemaining <- rest
+            | [] -> failwith "unreachable"
+
         eenvinner
 
     | TMDefLet(bind, _) ->
diff --git a/tests/fsharp/core/letrec/test.fsx b/tests/fsharp/core/letrec/test.fsx
index 4c746116db1..cb9a6840981 100644
--- a/tests/fsharp/core/letrec/test.fsx
+++ b/tests/fsharp/core/letrec/test.fsx
@@ -643,6 +643,170 @@ module Test3 =
     test "vwekjwve95" (tag()) 2
     test "vwekjwve96" (tag()) 3
 
+module Test12384 =
+    type Node =
+        {
+            Next: Node
+            Value: int
+        }
+
+    let rec one =
+        {
+            Next = two
+            Value = 1
+        }
+
+    and two =
+        {
+            Next = one
+            Value = 2
+        }
+    printfn "%A" one
+    printfn "%A" two
+    test "cweewlwne1" one.Value 1
+    test "cweewlwne2" one.Next.Value 2
+    test "cweewlwne3" one.Next.Next.Value 1
+    test "cweewlwne4" two.Value 2
+    test "cweewlwne5" two.Next.Value 1
+    test "cweewlwne6" two.Next.Next.Value 2
+
+module Test12384b =
+    type Node =
+        {
+            Next: Node
+            Value: int
+        }
+
+    let rec one =
+        {
+            Next = two
+            Value = 1
+        }
+
+    and two =
+        {
+            Next = one
+            Value = 2
+        }
+    // Also test the case where the two recursive bindings occur with a nested module after
+    module M =
+        let f x = x + 1
+        
+    printfn "%A" one
+    printfn "%A" two
+    test "cweewlwne1a" one.Value 1
+    test "cweewlwne2a" one.Next.Value 2
+    test "cweewlwne3a" one.Next.Next.Value 1
+    test "cweewlwne4a" two.Value 2
+    test "cweewlwne5a" two.Next.Value 1
+    test "cweewlwne6a" two.Next.Next.Value 2
+
+module rec Test12384c =
+    type Node =
+        {
+            Next: Node
+            Value: int
+        }
+
+    let one =
+        {
+            Next = two
+            Value = 1
+        }
+
+    let two =
+        {
+            Next = one
+            Value = 2
+        }
+    // Also test the case where the two recursive bindings occur with a nested module after
+    module M =
+        let f x = x + 1
+        
+    printfn "%A" one
+    printfn "%A" two
+    test "cweewlwne1b" one.Value 1
+    test "cweewlwne2b" one.Next.Value 2
+    test "cweewlwne3b" one.Next.Next.Value 1
+    test "cweewlwne4b" two.Value 2
+    test "cweewlwne5b" two.Next.Value 1
+    test "cweewlwne6b" two.Next.Next.Value 2
+
+
+//Note, this case doesn't initialize successfully because of the intervening module. Tracked by #12384
+  
+(*
+module rec Test12384d =
+    type Node =
+        {
+            Next: Node
+            Value: int
+        }
+
+    let one =
+        {
+            Next = two
+            Value = 1
+        }
+
+    // An intervening module declaration
+    module M =
+        let x() = one
+        
+    let two =
+        {
+            Next = one
+            Value = 2
+        }
+
+    printfn "%A" one
+    printfn "%A" two
+    test "cweewlwne1b" one.Value 1
+    test "cweewlwne2b" one.Next.Value 2
+    test "cweewlwne3b" one.Next.Next.Value 1
+    test "cweewlwne1b" (M.x()).Value 1
+    test "cweewlwne2b" (M.x()).Next.Value 2
+    test "cweewlwne3b" (M.x()).Next.Next.Value 1
+    test "cweewlwne4b" two.Value 2
+    test "cweewlwne5b" two.Next.Value 1
+    test "cweewlwne6b" two.Next.Next.Value 2
+*)
+
+module rec Test12384e =
+    type Node =
+        {
+            Next: Node
+            Value: int
+        }
+
+    let one =
+        {
+            Next = two
+            Value = 1
+        }
+
+    // An intervening type declaration
+    type M() =
+        static member X() = one
+        
+    let two =
+        {
+            Next = one
+            Value = 2
+        }
+
+    printfn "%A" one
+    printfn "%A" two
+    test "cweewlwne1b" one.Value 1
+    test "cweewlwne2b" one.Next.Value 2
+    test "cweewlwne3b" one.Next.Next.Value 1
+    test "cweewlwne1b" (M.X()).Value 1
+    test "cweewlwne2b" (M.X()).Next.Value 2
+    test "cweewlwne3b" (M.X()).Next.Next.Value 1
+    test "cweewlwne4b" two.Value 2
+    test "cweewlwne5b" two.Next.Value 1
+    test "cweewlwne6b" two.Next.Next.Value 2
+
 #if TESTS_AS_APP
 let RUN() = !failures
 #else