diff --git a/src/features/inlay_hints.zig b/src/features/inlay_hints.zig
index 448bf6548..cdfa6e745 100644
--- a/src/features/inlay_hints.zig
+++ b/src/features/inlay_hints.zig
@@ -237,6 +237,24 @@ fn writeVariableDeclHint(builder: *Builder, decl_node: Ast.Node.Index) !void {
     );
     if (type_str.len == 0) return;
 
+    // Restrict whitespace to only one space at a time.
+    var reduced_type_str = std.ArrayList(u8).init(builder.arena);
+    // Overallocates by a small amount if whitespace is reduced, but it should be fine.
+    try reduced_type_str.ensureTotalCapacity(type_str.len);
+    var skip = false;
+    for (type_str) |char| {
+        if (char == '\n' or char == ' ') {
+            if (!skip) {
+                try reduced_type_str.append(' ');
+            }
+            skip = true;
+            continue;
+        }
+        skip = false;
+        try reduced_type_str.append(char);
+    }
+    type_str = reduced_type_str.items;
+
     try builder.hints.append(builder.arena, .{
         .index = offsets.tokenToLoc(tree, hint.ast.mut_token + 1).end,
         .label = try std.fmt.allocPrint(builder.arena, ": {s}", .{
diff --git a/tests/lsp_features/inlay_hints.zig b/tests/lsp_features/inlay_hints.zig
index bb4a68e71..908dff179 100644
--- a/tests/lsp_features/inlay_hints.zig
+++ b/tests/lsp_features/inlay_hints.zig
@@ -112,6 +112,28 @@ test "inlayhints - var decl" {
         \\    }
         \\}
     , .Type);
+    try testInlayHints(
+        \\ fn thing(a: u32, b: i32) struct {
+        \\     a: u32,
+        \\     b: i32,
+        \\     c: struct {
+        \\         d: usize,
+        \\         e: []const u8,
+        \\     },
+        \\ } {
+        \\     return .{
+        \\         .a = a,
+        \\         .b = b,
+        \\         .c = .{
+        \\             .d = 0,
+        \\             .e = "Testing",
+        \\         }
+        \\     }; 
+        \\ }
+        \\
+        \\ var a<struct { a: u32, b: i32, c: struct { d: usize, e: []const u8, }, }> = thing(10, -4);
+        \\ _ = a;
+    , .Type);
 }
 
 fn testInlayHints(source: []const u8, kind: types.InlayHintKind) !void {