diff --git a/.changeset/shy-islands-talk.md b/.changeset/shy-islands-talk.md
new file mode 100644
index 000000000..48422affb
--- /dev/null
+++ b/.changeset/shy-islands-talk.md
@@ -0,0 +1,5 @@
+---
+"solid-js": patch
+---
+
+Improve signal setter type for code completion of string literal unions.
diff --git a/packages/solid/src/reactive/signal.ts b/packages/solid/src/reactive/signal.ts
index 7811b1bd8..121c44ea0 100644
--- a/packages/solid/src/reactive/signal.ts
+++ b/packages/solid/src/reactive/signal.ts
@@ -179,12 +179,12 @@ export function createRoot<T>(fn: RootFunction<T>, detachedOwner?: typeof Owner)
 export type Accessor<T> = () => T;
 
 export type Setter<in out T> = {
+  <U extends T>(value: Exclude<U, Function> | ((prev: T) => U)): U;
   <U extends T>(...args: undefined extends T ? [] : [value: (prev: T) => U]): undefined extends T
     ? undefined
     : U;
-  <U extends T>(value: (prev: T) => U): U;
   <U extends T>(value: Exclude<U, Function>): U;
-  <U extends T>(value: Exclude<U, Function> | ((prev: T) => U)): U;
+  <U extends T>(value: (prev: T) => U): U;
 };
 
 export type Signal<T> = [get: Accessor<T>, set: Setter<T>];