diff --git a/tests/helper.zig b/tests/helper.zig
new file mode 100644
index 0000000..1f2e139
--- /dev/null
+++ b/tests/helper.zig
@@ -0,0 +1,102 @@
+const std = @import("std");
+
+pub const Placeholder = struct {
+    loc: Loc,
+
+    pub const Loc = std.zig.Token.Loc;
+
+    pub fn placeholderSlice(self: Placeholder, source: []const u8) []const u8 {
+        return source[self.loc.start..self.loc.end];
+    }
+};
+
+/// returns an array of all placeholder locations
+pub fn collectPlaceholder(allocator: std.mem.Allocator, source: []const u8) ![]Placeholder {
+    var placeholders = std.ArrayListUnmanaged(Placeholder){};
+    errdefer placeholders.deinit(allocator);
+
+    var source_index: usize = 0;
+    while (std.mem.indexOfScalarPos(u8, source, source_index, '<')) |start_index| {
+        const end_index = std.mem.indexOfScalarPos(u8, source, start_index + 1, '>') orelse return error.Invalid;
+
+        try placeholders.append(allocator, .{ .loc = .{
+            .start = start_index,
+            .end = end_index,
+        } });
+
+        source_index = end_index + 1;
+    }
+
+    return placeholders.toOwnedSlice(allocator);
+}
+
+/// returns `source` without any placeholders
+pub fn clearPlaceholders(allocator: std.mem.Allocator, source: []const u8) ![]const u8 {
+    var output = std.ArrayListUnmanaged(u8){};
+    errdefer output.deinit(allocator);
+
+    var source_index: usize = 0;
+    while (std.mem.indexOfScalarPos(u8, source, source_index, '<')) |start_index| {
+        try output.appendSlice(allocator, source[source_index..start_index]);
+
+        source_index = std.mem.indexOfScalarPos(u8, source, start_index + 1, '>') orelse return error.Invalid;
+        source_index += 1;
+    }
+    try output.appendSlice(allocator, source[source_index..source.len]);
+
+    return output.toOwnedSlice(allocator);
+}
+
+const CollectClearPlaceholdersResult = struct {
+    /// placeholders relative to the `source` parameter in `collectClearPlaceholders`
+    placeholders: []Placeholder,
+    /// placeholders locations to `source`
+    placeholder_locations: []usize,
+    /// source without any placeholders
+    source: []const u8,
+
+    pub fn deinit(self: @This(), allocator: std.mem.Allocator) void {
+        allocator.free(self.placeholders);
+        allocator.free(self.placeholder_locations);
+        allocator.free(self.source);
+    }
+};
+
+/// see `CollectClearPlaceholdersResult`
+pub fn collectClearPlaceholders(allocator: std.mem.Allocator, source: []const u8) !CollectClearPlaceholdersResult {
+    var placeholders = std.ArrayListUnmanaged(Placeholder){};
+    errdefer placeholders.deinit(allocator);
+
+    var locations = std.ArrayListUnmanaged(usize){};
+    errdefer locations.deinit(allocator);
+
+    var new_source = std.ArrayListUnmanaged(u8){};
+    errdefer new_source.deinit(allocator);
+
+    var source_index: usize = 0;
+    var new_source_index: usize = 0;
+    while (std.mem.indexOfScalarPos(u8, source, source_index, '<')) |start_index| {
+        const end_index = std.mem.indexOfScalarPos(u8, source, start_index + 1, '>') orelse return error.Invalid;
+
+        const placeholder = Placeholder{ .loc = .{
+            .start = start_index + 1,
+            .end = end_index,
+        } };
+
+        try placeholders.append(allocator, placeholder);
+
+        new_source_index = new_source_index + (start_index - source_index);
+        try locations.append(allocator, new_source_index);
+        try new_source.appendSlice(allocator, source[source_index..start_index]);
+
+        source_index = end_index + 1;
+    }
+    try new_source.appendSlice(allocator, source[source_index..source.len]);
+
+    return CollectClearPlaceholdersResult{
+        .placeholders = placeholders.toOwnedSlice(allocator),
+        .placeholder_locations = locations.toOwnedSlice(allocator),
+        .source = new_source.toOwnedSlice(allocator),
+    };
+}
+
diff --git a/tests/lsp_features/inlay_hints.zig b/tests/lsp_features/inlay_hints.zig
new file mode 100644
index 0000000..0c14fa8
--- /dev/null
+++ b/tests/lsp_features/inlay_hints.zig
@@ -0,0 +1,163 @@
+const std = @import("std");
+const zls = @import("zls");
+
+const helper = @import("helper");
+const Context = @import("context").Context;
+
+const types = zls.types;
+const requests = zls.requests;
+
+const allocator: std.mem.Allocator = std.testing.allocator;
+
+test "inlayhints - empty" {
+    try testInlayHints("");
+}
+
+test "inlayhints - function call" {
+    try testInlayHints(
+        \\fn foo(alpha: u32) void {}
+        \\const _ = foo(<alpha>5);
+    );
+    try testInlayHints(
+        \\fn foo(alpha: u32, beta: u64) void {}
+        \\const _ = foo(<alpha>5,<beta>4);
+    );
+    try testInlayHints(
+        \\fn foo(alpha: u32, beta: u64) void {}
+        \\const _ = foo(  <alpha>3 + 2 ,  <beta>(3 - 2));
+    );
+    try testInlayHints(
+        \\fn foo(alpha: u32, beta: u64) void {}
+        \\const _ = foo(
+        \\    <alpha>3 + 2,
+        \\    <beta>(3 - 2),
+        \\);
+    );
+}
+
+test "inlayhints - function self parameter" {
+    try testInlayHints(
+        \\const Foo = struct { pub fn bar(self: *Foo, alpha: u32) void {} };
+        \\const foo: Foo = .{};
+        \\const _ = foo.bar(<alpha>5);
+    );
+    try testInlayHints(
+        \\const Foo = struct { pub fn bar(_: Foo, alpha: u32, beta: []const u8) void {} };
+        \\const foo: Foo = .{};
+        \\const _ = foo.bar(<alpha>5,<beta>"");
+    );
+}
+
+test "inlayhints - builtin call" {
+    try testInlayHints(
+        \\const _ = @intCast(<DestType>u32,<int>5);
+    );
+    try testInlayHints(
+        \\const _ = @memcpy(<dest>null,<source>null,<byte_count>0);
+    );
+
+    try testInlayHints(
+        \\const _ = @sizeOf(u32);
+    );
+    try testInlayHints(
+        \\const _ = @TypeOf(5);
+    );
+}
+
+fn testInlayHints(source: []const u8) !void {
+    const phr = try helper.collectClearPlaceholders(allocator, source);
+    defer phr.deinit(allocator);
+
+    var ctx = try Context.init();
+    defer ctx.deinit();
+
+    ctx.server.config.enable_inlay_hints = true;
+    ctx.server.config.inlay_hints_exclude_single_argument = false;
+    ctx.server.config.inlay_hints_show_builtin = true;
+
+    const open_document = requests.OpenDocument{
+        .params = .{
+            .textDocument = .{
+                .uri = "file:///test.zig",
+                // .languageId = "zig",
+                // .version = 420,
+                .text = phr.source,
+            },
+        },
+    };
+
+    const did_open_method = try std.json.stringifyAlloc(allocator, open_document.params, .{});
+    defer allocator.free(did_open_method);
+
+    try ctx.request("textDocument/didOpen", did_open_method, null);
+
+    const range = types.Range{
+        .start = types.Position{ .line = 0, .character = 0 },
+        .end = sourceIndexPosition(phr.source, phr.source.len),
+    };
+
+    const method = try std.json.stringifyAlloc(allocator, .{
+        .textDocument = .{
+            .uri = "file:///test.zig",
+        },
+        .range = range,
+    }, .{});
+    defer allocator.free(method);
+
+    const response_bytes = try ctx.requestAlloc("textDocument/inlayHint", method);
+    defer allocator.free(response_bytes);
+
+    const InlayHint = struct {
+        position: types.Position,
+        label: []const u8,
+        kind: types.InlayHintKind,
+    };
+
+    const Response = struct {
+        jsonrpc: []const u8,
+        id: types.RequestId,
+        result: []InlayHint,
+    };
+
+    const parse_options = std.json.ParseOptions{
+        .allocator = allocator,
+        .ignore_unknown_fields = true,
+    };
+    var token_stream = std.json.TokenStream.init(response_bytes);
+    var response = try std.json.parse(Response, &token_stream, parse_options);
+    defer std.json.parseFree(Response, response, parse_options);
+
+    const hints = response.result;
+
+    try std.testing.expectEqual(phr.placeholder_locations.len, hints.len);
+
+    outer: for (phr.placeholder_locations) |loc, i| {
+        const name = phr.placeholders[i].placeholderSlice(source);
+
+        const position = sourceIndexPosition(phr.source, loc);
+
+        for (hints) |hint| {
+            if (position.line != hint.position.line or position.character != hint.position.character) continue;
+
+            try std.testing.expect(hint.label.len != 0);
+            const trimmedLabel = hint.label[0 .. hint.label.len - 1]; // exclude :
+            try std.testing.expectEqualStrings(name, trimmedLabel);
+            try std.testing.expectEqual(types.InlayHintKind.Parameter, hint.kind);
+
+            continue :outer;
+        }
+        std.debug.print("Placeholder '{s}' at {}:{} (line:colon) not found!", .{ name, position.line, position.character });
+        return error.PlaceholderNotFound;
+    }
+}
+
+fn sourceIndexPosition(source: []const u8, index: usize) types.Position {
+    const line = std.mem.count(u8, source[0..index], &.{'\n'});
+    const last_line_index = if (std.mem.lastIndexOfScalar(u8, source[0..index], '\n')) |idx| idx + 1 else 0;
+    const last_line_character = index - last_line_index;
+
+    return types.Position{
+        .line = @intCast(i64, line),
+        .character = @intCast(i64, last_line_character),
+    };
+}
diff --git a/tests/tests.zig b/tests/tests.zig
index 6a305fe..758c79b 100644
--- a/tests/tests.zig
+++ b/tests/tests.zig
@@ -7,6 +7,7 @@ test {
 
     // LSP features
     _ = @import("lsp_features/semantic_tokens.zig");
+    _ = @import("lsp_features/inlay_hints.zig");
 
     // TODO Language features
 }