diff --git a/eng/Versions.props b/eng/Versions.props
index b1ba6a0dfb62b..0b398500e1356 100644
--- a/eng/Versions.props
+++ b/eng/Versions.props
@@ -18,8 +18,7 @@
     <UsingToolMicrosoftNetCompilers>true</UsingToolMicrosoftNetCompilers>
     <UsingToolIbcOptimization>true</UsingToolIbcOptimization>
     <UsingToolXliff>false</UsingToolXliff>
-    <!-- Downgrade compiler version to fix nullability issues: https://github.com/dotnet/runtime/issues/34417. -->
-    <!-- <MicrosoftNetCompilersToolsetVersion>3.6.0-2.20166.2</MicrosoftNetCompilersToolsetVersion> -->
+    <!-- Upgrade compiler version to work around build failures: https://github.com/dotnet/runtime/issues/34417. -->
     <MicrosoftNetCompilersToolsetVersion>3.7.0-2.20258.1</MicrosoftNetCompilersToolsetVersion>
     <!-- Blob storage container that has the "Latest" channel to publish to. -->
     <ContainerName>dotnet</ContainerName>
diff --git a/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/BlockingCollection.cs b/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/BlockingCollection.cs
index f4e007424b5e9..1939dd9d68b29 100644
--- a/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/BlockingCollection.cs
+++ b/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/BlockingCollection.cs
@@ -756,13 +756,10 @@ private bool TryTakeWithNoTimeValidation([MaybeNullWhen(false)] out T item, int
                 }
             }
 
-            if (waitForSemaphoreWasSuccessful)
-            {
-                Debug.Assert(item != null);
-            }
-
 #pragma warning disable CS8762
-            // Compiler can't automatically deduce 'item' has a non-null value when returning false.
+            // https://github.com/dotnet/runtime/issues/36132
+            // Compiler can't automatically deduce that nullability constraints
+            // for 'item' are satisfied at this exit point.
             return waitForSemaphoreWasSuccessful;
 #pragma warning restore CS8762
         }
diff --git a/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/ConcurrentBag.cs b/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/ConcurrentBag.cs
index 5ccc784f54dfa..3088224b47186 100644
--- a/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/ConcurrentBag.cs
+++ b/src/libraries/System.Collections.Concurrent/src/System/Collections/Concurrent/ConcurrentBag.cs
@@ -220,8 +220,9 @@ private bool TrySteal([MaybeNullWhen(false)] out T result, bool take)
                 if (gotItem)
                 {
 #pragma warning disable CS8762
-                    // Compiler can't automatically deduce that 'result' is set to a valid value
-                    // (which may be null if T allows it) at this exit point.
+                    // https://github.com/dotnet/runtime/issues/36132
+                    // Compiler can't automatically deduce that nullability constraints
+                    // for 'result' are satisfied at this exit point.
                     return true;
 #pragma warning restore CS8762
                 }
diff --git a/src/libraries/System.Collections.Concurrent/tests/BlockingCollectionTests.cs b/src/libraries/System.Collections.Concurrent/tests/BlockingCollectionTests.cs
index 6f8a107ccb8c6..9a21bc6ef01e7 100644
--- a/src/libraries/System.Collections.Concurrent/tests/BlockingCollectionTests.cs
+++ b/src/libraries/System.Collections.Concurrent/tests/BlockingCollectionTests.cs
@@ -966,6 +966,22 @@ public static void Test21_CopyToExceptions()
             });
         }
 
+        [Fact]
+        public static void Test_WithNullEntries()
+        {
+            BlockingCollection<string> collection = new BlockingCollection<string>()
+            {
+                "hello",
+                null,
+                "goodbye"
+            };
+
+            Assert.Equal("hello", collection.Take());
+            Assert.Null(collection.Take());
+            Assert.Equal("goodbye", collection.Take());
+            Assert.False(collection.TryTake(out _));
+        }
+
         [Fact]
         public static void Test_LargeSize()
         {