diff --git a/simple_parsing/wrappers/field_parsing.py b/simple_parsing/wrappers/field_parsing.py
index 5208a6ec..493c4b3c 100644
--- a/simple_parsing/wrappers/field_parsing.py
+++ b/simple_parsing/wrappers/field_parsing.py
@@ -16,6 +16,7 @@
     is_forward_ref,
     is_homogeneous_tuple_type,
     is_list,
+    is_literal,
     is_tuple,
     is_typevar,
     is_union,
@@ -127,6 +128,10 @@ def get_parsing_fn(t: type[T]) -> Callable[[Any], T]:
         args = get_type_arguments(t)
         return parse_union(*args)
 
+    elif is_literal(t):
+        logger.debug(f"Parsing a Literal field of type {t}")
+        return parse_literal(t)
+
     elif is_enum(t):
         logger.debug(f"Parsing an Enum field of type {t}")
         return parse_enum(t)
@@ -205,6 +210,29 @@ def _parse_optional(val: Optional[Any]) -> Optional[T]:
     return _parse_optional
 
 
+def parse_literal(literal_type: type[T]) -> Callable[[str], T]:
+    """Returns a parsing function for a Literal type.
+
+    The function maps the string representation of each literal value back to the actual value
+    (e.g. "1" -> 1, "BLUE" -> Color.BLUE).
+    """
+    literal_values = get_type_arguments(literal_type)
+    # Build a mapping from the string representation to the actual value.
+    choice_dict: dict[str, Any] = {
+        (v.name if isinstance(v, enum.Enum) else str(v)): v for v in literal_values
+    }
+
+    def _parse_literal(val: str) -> T:
+        if val in choice_dict:
+            return choice_dict[val]
+        raise ValueError(
+            f"Invalid value {val!r} for {literal_type}. Expected one of: {list(choice_dict)}"
+        )
+
+    _parse_literal.__name__ = str(literal_type)
+    return _parse_literal
+
+
 def parse_tuple(tuple_item_types: tuple[type[T], ...]) -> Callable[[list[T]], tuple[T, ...]]:
     """Makes a parsing function for creating tuples from the command-line args.
 
diff --git a/test/test_literal.py b/test/test_literal.py
index b251056b..8fa6b186 100644
--- a/test/test_literal.py
+++ b/test/test_literal.py
@@ -1,7 +1,7 @@
 import enum
 import sys
 from dataclasses import dataclass
-from typing import Any, NamedTuple, Optional
+from typing import Any, NamedTuple, Optional, Union
 
 import pytest
 from typing_extensions import Literal
@@ -118,3 +118,21 @@ def test_reproduce_issue_259_parsing_literal_py39():
         "argument --param: invalid typing.Literal['bar', 'biz'] value: 'biz'"
     ):
         assert SomeFoo.setup("").param == "biz"
+
+
+@dataclass
+class Foo:
+    bar: Union[Literal["a"], int] = "a"
+
+
+def test_issue_322():
+    """Test for https://github.com/lebrice/SimpleParsing/issues/322."""
+    from simple_parsing import parse
+
+    assert parse(Foo, args="") == Foo()
+    assert parse(Foo, args="--bar=a") == Foo(bar="a")
+    # 'b' is neither in Literal["a"] nor a valid int, so it should be rejected.
+    with exits_and_writes_to_stderr("invalid"):
+        assert parse(Foo, args="--bar=b")
+
+    assert parse(Foo, args="--bar=123") == Foo(bar=123)