diff --git a/src/transform/apply-gen.xsl b/src/transform/apply-gen.xsl
index c194593..e7d80be 100644
--- a/src/transform/apply-gen.xsl
+++ b/src/transform/apply-gen.xsl
@@ -112,6 +112,37 @@
 </template>
 
 
+<!--
+  Do not process functions that are overloaded on arity
+
+  There are a couple reasons for this:  Firstly, overloading is
+  fundamentally incompatible with partial application, because we are unable
+  to determine when a function is fully applied.  Secondly, we would have no
+  choice but to generate functions for every arity that does @emph{not}
+  exist.  Together, that would yield a very awkward implementation whereby
+  applying N arguments may apply the target function, but N-1 and N+1 may
+  result in a partial application.  That is not acceptable.
+
+  To aid in debugging, a comment is output stating that the function was
+  explicitly ignored.
+-->
+<template mode="fgen:create"
+          match="xsl:function[
+                   @name = root(.)/xsl:*/xsl:function[
+                     not( . is current() )
+                   ]/@name
+                 ]"
+          priority="5">
+  <comment>
+    <text>No definition generated for overloaded function `</text>
+    <value-of select="@name" />
+    <text>#</text>
+    <value-of select="count( xsl:param )" />
+    <text>'</text>
+  </comment>
+</template>
+
+
 <!--
   Process function definition
 -->
diff --git a/test/transform/apply-gen-test-in.xsl b/test/transform/apply-gen-test-in.xsl
index 631ee0a..73ce7f6 100644
--- a/test/transform/apply-gen-test-in.xsl
+++ b/test/transform/apply-gen-test-in.xsl
@@ -42,6 +42,17 @@
     <sequence select="$x - $y" />
   </function>
 
+
+  <!-- overloaded function, for which we cannot generate anything -->
+  <function name="foo:overloaded">
+    <param name="a" />
+  </function>
+  <function name="foo:overloaded">
+    <param name="a" />
+    <param name="b" />
+  </function>
+
+
   <!-- large number of arguments to test partial application -->
   <function name="foo:eight" as="item()+">
     <param name="arg1" />
diff --git a/test/transform/apply-gen.xspec b/test/transform/apply-gen.xspec
index ad8dfca..03c3203 100644
--- a/test/transform/apply-gen.xspec
+++ b/test/transform/apply-gen.xspec
@@ -130,6 +130,27 @@
   </scenario>
 
 
+  <!-- see SUT for rationale -->
+  <scenario label="given an arity-overloaded function">
+    <context>
+      <xsl:stylesheet>
+        <xsl:function name="foo:overloaded">
+          <xsl:param name="a" />
+        </xsl:function>
+
+        <xsl:function name="foo:overloaded">
+          <xsl:param name="a" />
+          <xsl:param name="b" />
+        </xsl:function>
+      </xsl:stylesheet>
+    </context>
+
+    <expect label="yields no functions of that name"
+            test="not( xsl:stylesheet/xsl:function[
+                         @name='foo:overloaded' ] )" />
+  </scenario>
+
+
   <scenario label="given a stylesheet">
     <scenario label="with no function elements">
       <context>