diff --git a/crates/ailang-check/src/lib.rs b/crates/ailang-check/src/lib.rs
index 0819691..72649f3 100644
--- a/crates/ailang-check/src/lib.rs
+++ b/crates/ailang-check/src/lib.rs
@@ -90,12 +90,21 @@ impl Subst {
                 name: name.clone(),
                 args: args.iter().map(|a| self.apply(a)).collect(),
             },
-            Type::Fn { params, ret, effects, .. } => Type::Fn {
+            // Modes are part of a fn type's identity (an `Own`-returning
+            // contract differs from a `Borrow`-returning one) and are
+            // positional over `params` — substitution remaps each param
+            // type element-wise without changing the arity, so the mode
+            // lists stay aligned. Preserve them: substitution must be
+            // type-preserving, and the typed-MIR boundary reads `ret_mode`
+            // off the substituted node type to decide RC drop. `unify`
+            // ignores modes (its Fn arm destructures them with `..`), so
+            // carrying them through here cannot change unification.
+            Type::Fn { params, param_modes, ret, ret_mode, effects } => Type::Fn {
                 params: params.iter().map(|p| self.apply(p)).collect(),
                 ret: Box::new(self.apply(ret)),
                 effects: effects.clone(),
-                param_modes: vec![],
-                ret_mode: ParamMode::Implicit,
+                param_modes: param_modes.clone(),
+                ret_mode: ret_mode.clone(),
             },
             Type::Forall { vars, constraints, body } => Type::Forall {
                 vars: vars.clone(),
diff --git a/crates/ailang-check/tests/subst_preserves_modes.rs b/crates/ailang-check/tests/subst_preserves_modes.rs
new file mode 100644
index 0000000..b180e64
--- /dev/null
+++ b/crates/ailang-check/tests/subst_preserves_modes.rs
@@ -0,0 +1,56 @@
+//! mir.1b producer pin: `Subst::apply` must preserve fn-type modes.
+//!
+//! The typed-MIR boundary carries the modes `check` proved. The
+//! codegen drop path reads `ret_mode == Own` off a call's callee node
+//! to decide RC trackability — an Own-returning call hands a fresh heap
+//! allocation to the caller's frame, so the binder needs an
+//! `ailang_rc_dec` at scope close. `Subst::apply` is the last transform
+//! `lower_to_mir::synth_pure` runs on every node type, so an `apply`
+//! that rebuilds `Type::Fn` with empty `param_modes` / `Implicit`
+//! `ret_mode` silently erases the Own signal: the callee node reads
+//! back `Implicit`, nothing is trackable, and a heap-`Str` binder leaks
+//! (`frees=0`). This pins that `apply` is mode-preserving — a
+//! type-preserving substitution must not drop the modes that are part
+//! of a fn type's identity.
+
+use ailang_core::ast::ParamMode;
+use ailang_core::Type;
+use ailang_check::Subst;
+
+#[test]
+fn subst_apply_preserves_fn_ret_and_param_modes() {
+    // `(borrow Int) -> (own Str)` — an identity substitution must
+    // round-trip both the borrow param-mode and the Own ret-mode
+    // unchanged. (`Own` is the mode the drop path actually reads;
+    // `Borrow` is the one the custom `Type` equality keeps distinct,
+    // so it doubles as a witness that a stripped result is observable.)
+    let fn_ty = Type::Fn {
+        params: vec![Type::int()],
+        param_modes: vec![ParamMode::Borrow],
+        ret: Box::new(Type::str_()),
+        ret_mode: ParamMode::Own,
+        effects: vec![],
+    };
+
+    let applied = Subst::default().apply(&fn_ty);
+
+    let Type::Fn {
+        param_modes,
+        ret_mode,
+        ..
+    } = applied
+    else {
+        panic!("apply of a Fn type is a Fn type");
+    };
+
+    assert!(
+        matches!(ret_mode, ParamMode::Own),
+        "ret_mode Own must survive Subst::apply (the drop path reads it \
+         for RC trackability), got {ret_mode:?}"
+    );
+    assert_eq!(
+        param_modes.first(),
+        Some(&ParamMode::Borrow),
+        "param_modes must survive Subst::apply, got {param_modes:?}"
+    );
+}