diff --git a/stubs/geopandas/geopandas/tools/overlay.pyi b/stubs/geopandas/geopandas/tools/overlay.pyi
index ae8fb41348ba..082d0ac5b15c 100644
--- a/stubs/geopandas/geopandas/tools/overlay.pyi
+++ b/stubs/geopandas/geopandas/tools/overlay.pyi
@@ -1,5 +1,11 @@
+from typing import Literal
+
 from ..geodataframe import GeoDataFrame
 
 def overlay(
-    df1: GeoDataFrame, df2: GeoDataFrame, how: str = "intersection", keep_geom_type: bool | None = None, make_valid: bool = True
+    df1: GeoDataFrame,
+    df2: GeoDataFrame,
+    how: Literal["intersection", "union", "identity", "symmetric_difference", "difference"] = "intersection",
+    keep_geom_type: bool | None = None,
+    make_valid: bool = True,
 ) -> GeoDataFrame: ...