diff --git a/packages-private/dts-test/defineComponent.test-d.tsx b/packages-private/dts-test/defineComponent.test-d.tsx
index fda3ca4856c..b64fceaf2ea 100644
--- a/packages-private/dts-test/defineComponent.test-d.tsx
+++ b/packages-private/dts-test/defineComponent.test-d.tsx
@@ -1613,7 +1613,7 @@ describe('directive typing', () => {
   expectType<typeof vShow>(comp.directives!.vShow)
 })
 
-describe('expose typing', () => {
+describe('expose typing w/ options object', () => {
   const Comp = defineComponent({
     expose: ['a', 'b'],
     props: {
@@ -1637,6 +1637,41 @@ describe('expose typing', () => {
   vm.c
 })
 
+describe('expose typing w/ setup function', () => {
+  const Comp = defineComponent(
+    (
+      props: { some: String },
+      {
+        expose,
+      }: SetupContext<EmitsOptions, SlotsType, { a: number; b: string }>,
+    ) => {
+      const a = 1
+      const b = '2'
+      const c = 3
+
+      expose({ a, b })
+
+      return () => h('div')
+    },
+    {
+      props: ['some'],
+      expose: ['a', 'b'],
+    },
+  )
+
+  expectType<Array<'a' | 'b'>>(Comp.expose!)
+
+  const vm = new Comp({ some: 'string' })
+  // internal should still be exposed
+  vm.$props
+
+  expectType<number>(vm.a)
+  expectType<string>(vm.b)
+
+  // @ts-expect-error shouldn't be exposed
+  vm.c
+})
+
 import type {
   AllowedComponentProps,
   ComponentCustomProps,
diff --git a/packages/runtime-core/src/apiDefineComponent.ts b/packages/runtime-core/src/apiDefineComponent.ts
index 2ce870f0141..23520c98ec7 100644
--- a/packages/runtime-core/src/apiDefineComponent.ts
+++ b/packages/runtime-core/src/apiDefineComponent.ts
@@ -118,6 +118,7 @@ export type DefineSetupFnComponent<
   S extends SlotsType = SlotsType,
   Props = P & EmitsToProps<E>,
   PP = PublicProps,
+  Exposed extends string = string,
 > = new (
   props: Props & PP,
 ) => CreateComponentPublicInstanceWithMixins<
@@ -133,7 +134,10 @@ export type DefineSetupFnComponent<
   {},
   false,
   {},
-  S
+  S,
+  {},
+  {},
+  Exposed
 >
 
 type ToResolvedProps<Props, Emits extends EmitsOptions> = Readonly<Props> &
@@ -151,33 +155,51 @@ export function defineComponent<
   E extends EmitsOptions = {},
   EE extends string = string,
   S extends SlotsType = {},
+  Exposed extends Record<string, any> = Record<string, any>,
 >(
   setup: (
     props: Props,
-    ctx: SetupContext<E, S>,
+    ctx: SetupContext<E, S, Exposed>,
   ) => RenderFunction | Promise<RenderFunction>,
-  options?: Pick<ComponentOptions, 'name' | 'inheritAttrs'> & {
+  options?: Pick<ComponentOptions, 'name' | 'inheritAttrs' | 'expose'> & {
     props?: (keyof Props)[]
     emits?: E | EE[]
     slots?: S
+    expose?: (keyof Exposed)[]
   },
-): DefineSetupFnComponent<Props, E, S>
+): DefineSetupFnComponent<
+  Props,
+  E,
+  S,
+  Props & EmitsToProps<E>,
+  PublicProps,
+  Extract<keyof Exposed, string>
+>
 export function defineComponent<
   Props extends Record<string, any>,
   E extends EmitsOptions = {},
   EE extends string = string,
   S extends SlotsType = {},
+  Exposed extends Record<string, any> = Record<string, any>,
 >(
   setup: (
     props: Props,
-    ctx: SetupContext<E, S>,
+    ctx: SetupContext<E, S, Exposed>,
   ) => RenderFunction | Promise<RenderFunction>,
-  options?: Pick<ComponentOptions, 'name' | 'inheritAttrs'> & {
+  options?: Pick<ComponentOptions, 'name' | 'inheritAttrs' | 'expose'> & {
     props?: ComponentObjectPropsOptions<Props>
     emits?: E | EE[]
     slots?: S
+    expose?: (keyof Exposed)[]
   },
-): DefineSetupFnComponent<Props, E, S>
+): DefineSetupFnComponent<
+  Props,
+  E,
+  S,
+  Props & EmitsToProps<E>,
+  PublicProps,
+  Extract<keyof Exposed, string>
+>
 
 // overload 2: defineComponent with options object, infer props from options
 export function defineComponent<
diff --git a/packages/runtime-core/src/component.ts b/packages/runtime-core/src/component.ts
index 3ed42ed0b55..60d53a14019 100644
--- a/packages/runtime-core/src/component.ts
+++ b/packages/runtime-core/src/component.ts
@@ -217,6 +217,7 @@ export interface FunctionalComponent<
   E extends EmitsOptions | Record<string, any[]> = {},
   S extends Record<string, any> = any,
   EE extends EmitsOptions = ShortEmitsToObject<E>,
+  Exposed extends Record<string, any> = Record<string, any>,
 > extends ComponentInternalOptions {
   // use of any here is intentional so it can be a valid JSX Element constructor
   (
@@ -226,6 +227,7 @@ export interface FunctionalComponent<
   props?: ComponentPropsOptions<P>
   emits?: EE | (keyof EE)[]
   slots?: IfAny<S, Slots, SlotsType<S>>
+  expose?: (keyof Exposed)[]
   inheritAttrs?: boolean
   displayName?: string
   compatConfig?: CompatConfig
@@ -278,14 +280,13 @@ export type LifecycleHook<TFn = Function> = (TFn & SchedulerJob)[] | null
 export type SetupContext<
   E = EmitsOptions,
   S extends SlotsType = {},
+  EX extends Record<string, any> = Record<string, any>,
 > = E extends any
   ? {
       attrs: Data
       slots: UnwrapSlotsType<S>
       emit: EmitFn<E>
-      expose: <Exposed extends Record<string, any> = Record<string, any>>(
-        exposed?: Exposed,
-      ) => void
+      expose: <Exposed extends EX = EX>(exposed?: Exposed) => void
     }
   : never