diff --git a/src/services/inlayHints.ts b/src/services/inlayHints.ts
index 934bf0ca739..fffe89dac5f 100644
--- a/src/services/inlayHints.ts
+++ b/src/services/inlayHints.ts
@@ -3,6 +3,7 @@ import {
     ArrayTypeNode,
     ArrowFunction,
     CallExpression,
+    CharacterCodes,
     ConditionalTypeNode,
     ConstructorTypeNode,
     createPrinterWithRemoveComments,
@@ -12,6 +13,7 @@ import {
     EmitHint,
     EnumMember,
     equateStringsCaseInsensitive,
+    escapeString,
     Expression,
     findChildOfKind,
     findIndex,
@@ -26,6 +28,7 @@ import {
     getLanguageVariant,
     getLeadingCommentRanges,
     getNameOfDeclaration,
+    getQuotePreference,
     hasContextSensitiveParameters,
     Identifier,
     idText,
@@ -59,9 +62,11 @@ import {
     isPropertyAccessExpression,
     isPropertyDeclaration,
     isSpreadElement,
+    isStringLiteral,
     isTypeNode,
     isVarConst,
     isVariableDeclaration,
+    LiteralExpression,
     LiteralTypeNode,
     MappedTypeNode,
     MethodDeclaration,
@@ -70,7 +75,6 @@ import {
     Node,
     NodeArray,
     NodeBuilderFlags,
-    NumericLiteral,
     OptionalTypeNode,
     ParameterDeclaration,
     ParenthesizedTypeNode,
@@ -78,11 +82,11 @@ import {
     PropertyDeclaration,
     PropertySignature,
     QualifiedName,
+    QuotePreference,
     RestTypeNode,
     Signature,
     skipParentheses,
     some,
-    StringLiteral,
     Symbol,
     SymbolFlags,
     SyntaxKind,
@@ -125,6 +129,7 @@ export function provideInlayHints(context: InlayHintsContext): InlayHint[] {
     const { file, program, span, cancellationToken, preferences } = context;
     const sourceFileText = file.text;
     const compilerOptions = program.getCompilerOptions();
+    const quotePreference = getQuotePreference(file, preferences);
 
     const checker = program.getTypeChecker();
     const result: InlayHint[] = [];
@@ -473,6 +478,11 @@ export function provideInlayHints(context: InlayHintsContext): InlayHint[] {
                 return;
             }
 
+            if (isLiteralExpression(node)) {
+                parts.push({ text: getLiteralText(node) });
+                return;
+            }
+
             switch (node.kind) {
                 case SyntaxKind.Identifier:
                     const identifier = node as Identifier;
@@ -485,12 +495,6 @@ export function provideInlayHints(context: InlayHintsContext): InlayHint[] {
                         parts.push({ text: identifierText });
                     }
                     break;
-                case SyntaxKind.NumericLiteral:
-                    parts.push({ text: (node as NumericLiteral).text });
-                    break;
-                case SyntaxKind.StringLiteral:
-                    parts.push({ text: `"${(node as StringLiteral).text}"` });
-                    break;
                 case SyntaxKind.QualifiedName:
                     const qualifiedName = node as QualifiedName;
                     visitForDisplayParts(qualifiedName.left);
@@ -749,6 +753,13 @@ export function provideInlayHints(context: InlayHintsContext): InlayHint[] {
                 visitForDisplayParts(node);
             });
         }
+
+        function getLiteralText(node: LiteralExpression) {
+            if (isStringLiteral(node)) {
+                return quotePreference === QuotePreference.Single ? `'${escapeString(node.text, CharacterCodes.singleQuote)}'` : `"${escapeString(node.text, CharacterCodes.doubleQuote)}"`;
+            }
+            return node.text;
+        }
     }
 
     function isUndefined(name: __String) {
diff --git a/tests/baselines/reference/inlayHintsInteractiveFunctionParameterTypes5.baseline b/tests/baselines/reference/inlayHintsInteractiveFunctionParameterTypes5.baseline
new file mode 100644
index 00000000000..c4df79dc90d
--- /dev/null
+++ b/tests/baselines/reference/inlayHintsInteractiveFunctionParameterTypes5.baseline
@@ -0,0 +1,16 @@
+export function fn(b = foo) {}
+                    ^
+{
+  "text": "",
+  "displayParts": [
+    {
+      "text": ": "
+    },
+    {
+      "text": "1n"
+    }
+  ],
+  "position": 40,
+  "kind": "Type",
+  "whitespaceBefore": true
+}
\ No newline at end of file
diff --git a/tests/baselines/reference/inlayHintsInteractiveMultifile1.baseline b/tests/baselines/reference/inlayHintsInteractiveMultifile1.baseline
index 809e9d6eda1..11f79a69320 100644
--- a/tests/baselines/reference/inlayHintsInteractiveMultifile1.baseline
+++ b/tests/baselines/reference/inlayHintsInteractiveMultifile1.baseline
@@ -60,7 +60,7 @@ function bar () { return import('./a') }
       "text": "import("
     },
     {
-      "text": "\"/a\""
+      "text": "'/a'"
     },
     {
       "text": ")"
diff --git a/tests/baselines/reference/inlayHintsQuotePreference1.baseline b/tests/baselines/reference/inlayHintsQuotePreference1.baseline
new file mode 100644
index 00000000000..a3bb747939b
--- /dev/null
+++ b/tests/baselines/reference/inlayHintsQuotePreference1.baseline
@@ -0,0 +1,33 @@
+export function fn(a = a1, b = b1) {}
+                    ^
+{
+  "text": "",
+  "displayParts": [
+    {
+      "text": ": "
+    },
+    {
+      "text": "\"\\\"\""
+    }
+  ],
+  "position": 64,
+  "kind": "Type",
+  "whitespaceBefore": true
+}
+
+export function fn(a = a1, b = b1) {}
+                            ^
+{
+  "text": "",
+  "displayParts": [
+    {
+      "text": ": "
+    },
+    {
+      "text": "\"\\\\\""
+    }
+  ],
+  "position": 72,
+  "kind": "Type",
+  "whitespaceBefore": true
+}
\ No newline at end of file
diff --git a/tests/baselines/reference/inlayHintsQuotePreference2.baseline b/tests/baselines/reference/inlayHintsQuotePreference2.baseline
new file mode 100644
index 00000000000..0084f769ce8
--- /dev/null
+++ b/tests/baselines/reference/inlayHintsQuotePreference2.baseline
@@ -0,0 +1,33 @@
+export function fn(a = a1, b = b1) {}
+                    ^
+{
+  "text": "",
+  "displayParts": [
+    {
+      "text": ": "
+    },
+    {
+      "text": "'\\''"
+    }
+  ],
+  "position": 64,
+  "kind": "Type",
+  "whitespaceBefore": true
+}
+
+export function fn(a = a1, b = b1) {}
+                            ^
+{
+  "text": "",
+  "displayParts": [
+    {
+      "text": ": "
+    },
+    {
+      "text": "'\\\\'"
+    }
+  ],
+  "position": 72,
+  "kind": "Type",
+  "whitespaceBefore": true
+}
\ No newline at end of file
diff --git a/tests/cases/fourslash/inlayHintsInteractiveFunctionParameterTypes5.ts b/tests/cases/fourslash/inlayHintsInteractiveFunctionParameterTypes5.ts
new file mode 100644
index 00000000000..0dc3b2da447
--- /dev/null
+++ b/tests/cases/fourslash/inlayHintsInteractiveFunctionParameterTypes5.ts
@@ -0,0 +1,9 @@
+/// <reference path="fourslash.ts" />
+
+////const foo: 1n = 1n;
+////export function fn(b = foo) {}
+
+verify.baselineInlayHints(undefined, {
+    includeInlayFunctionParameterTypeHints: true,
+    interactiveInlayHints: true
+});
diff --git a/tests/cases/fourslash/inlayHintsQuotePreference1.ts b/tests/cases/fourslash/inlayHintsQuotePreference1.ts
new file mode 100644
index 00000000000..0339d46545f
--- /dev/null
+++ b/tests/cases/fourslash/inlayHintsQuotePreference1.ts
@@ -0,0 +1,11 @@
+/// <reference path="fourslash.ts" />
+
+////const a1: '"' = '"';
+////const b1: '\\' = '\\';
+////export function fn(a = a1, b = b1) {}
+
+verify.baselineInlayHints(undefined, {
+    includeInlayFunctionParameterTypeHints: true,
+    interactiveInlayHints: true,
+    quotePreference: "double"
+});
diff --git a/tests/cases/fourslash/inlayHintsQuotePreference2.ts b/tests/cases/fourslash/inlayHintsQuotePreference2.ts
new file mode 100644
index 00000000000..377276bbdb2
--- /dev/null
+++ b/tests/cases/fourslash/inlayHintsQuotePreference2.ts
@@ -0,0 +1,11 @@
+/// <reference path="fourslash.ts" />
+
+////const a1: "'" = "'";
+////const b1: "\\" = "\\";
+////export function fn(a = a1, b = b1) {}
+
+verify.baselineInlayHints(undefined, {
+    includeInlayFunctionParameterTypeHints: true,
+    interactiveInlayHints: true,
+    quotePreference: "single"
+});