diff --git a/common/changes/@typespec/compiler/fix-interface-op-instance-cache_2023-04-18-21-50.json b/common/changes/@typespec/compiler/fix-interface-op-instance-cache_2023-04-18-21-50.json
new file mode 100644
index 00000000000..2c9dc1c469a
--- /dev/null
+++ b/common/changes/@typespec/compiler/fix-interface-op-instance-cache_2023-04-18-21-50.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@typespec/compiler",
+      "comment": "Fix: Issue with templated operations in templated interface would get cached only by keying on the operation template args.",
+      "type": "none"
+    }
+  ],
+  "packageName": "@typespec/compiler"
+}
\ No newline at end of file
diff --git a/packages/compiler/core/checker.ts b/packages/compiler/core/checker.ts
index bc923adbaa9..d19681ef982 100644
--- a/packages/compiler/core/checker.ts
+++ b/packages/compiler/core/checker.ts
@@ -1146,18 +1146,13 @@ export function createChecker(program: Program): Checker {
         );
       }
     }
-    const cached = symbolLinks.instantiations?.get(args);
+    const mapper = createTypeMapper(params, args, parentMapper);
+    const cached = symbolLinks.instantiations?.get(mapper.args);
     if (cached) {
       return cached;
     }
     if (instantiateTempalates) {
-      return instantiateTemplate(
-        symbolLinks.instantiations,
-        templateNode,
-        params,
-        args,
-        parentMapper
-      );
+      return instantiateTemplate(symbolLinks.instantiations, templateNode, params, mapper);
     } else {
       return errorType;
     }
@@ -1175,13 +1170,11 @@ export function createChecker(program: Program): Checker {
     instantiations: TypeInstantiationMap,
     templateNode: TemplateableNode,
     params: TemplateParameter[],
-    args: Type[],
-    parentMapper: TypeMapper | undefined
+    mapper: TypeMapper
   ): Type {
-    const mapper = createTypeMapper(params, args, parentMapper);
     const type = getTypeForNode(templateNode, mapper);
-    if (!instantiations.get(args)) {
-      instantiations.set(args, type);
+    if (!instantiations.get(mapper.args)) {
+      instantiations.set(mapper.args, type);
     }
     if (type.kind === "Model") {
       type.templateNode = templateNode;
@@ -5041,7 +5034,7 @@ function createTypeMapper(
 
   return {
     partial: false,
-    args,
+    args: [...(parentMapper?.args ?? []), ...args],
     getMappedType: (type: TemplateParameter) => {
       return map.get(type) ?? type;
     },
diff --git a/packages/compiler/test/checker/interface.test.ts b/packages/compiler/test/checker/interface.test.ts
index a1885e6b255..4880675ce76 100644
--- a/packages/compiler/test/checker/interface.test.ts
+++ b/packages/compiler/test/checker/interface.test.ts
@@ -1,4 +1,4 @@
-import { deepStrictEqual, ok, strictEqual } from "assert";
+import { deepStrictEqual, notStrictEqual, ok, strictEqual } from "assert";
 import { isTemplateDeclaration } from "../../core/type-utils.js";
 import { Interface, Model, Operation, Type } from "../../core/types.js";
 import {
@@ -368,6 +368,29 @@ describe("compiler: interfaces", () => {
       strictEqual(a.type, b.type);
     });
 
+    it("templated interface with different args but templated operations with the same arg shouldn't be the same", async () => {
+      const { Index } = (await runner.compile(`
+      @test interface Foo<A> {
+        @test bar<B>(input: A): B;
+      }
+
+      alias MyFoo8 = Foo<int8>;
+      alias MyFoo16 = Foo<int16>;
+      @test model Index {
+        a: MyFoo8.bar<string>;
+        b: MyFoo16.bar<string>;
+      }
+      `)) as {
+        Index: Model;
+      };
+      const a = Index.properties.get("a");
+      const b = Index.properties.get("b");
+      ok(a);
+      ok(b);
+
+      notStrictEqual(a.type, b.type);
+    });
+
     it("can extend an interface with templated operations", async () => {
       const { Foo, myBar: bar } = (await runner.compile(`
       interface Base<A> {