diff --git a/open-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java b/open-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java
index a23b7a548..076f8aadf 100644
--- a/open-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java
+++ b/open-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java
@@ -1247,10 +1247,10 @@ protected void visitLambdaExpression(LambdaExpressionTree node, boolean statemen
                 token(",");
                 builder.breakOp(" ");
             }
-            visitVariables(
-                    ImmutableList.of(parameter),
-                    DeclarationKind.NONE,
-                    inlineAnnotationDirection(parameter.getModifiers()));
+            // A lambda parameter is a parameter: its annotations stay on its line, as a method parameter's do. The
+            // vertical direction, a forced break after an annotation with arguments, is for local variable
+            // declarations.
+            visitVariables(ImmutableList.of(parameter), DeclarationKind.NONE, Direction.HORIZONTAL);
             first = false;
         }
         if (parens) {
diff --git a/open-java-format/src/test/resources/com/palantir/javaformat/java/testdata/ojf-issue-101-annotated-lambda-parameters.input b/open-java-format/src/test/resources/com/palantir/javaformat/java/testdata/ojf-issue-101-annotated-lambda-parameters.input
new file mode 100644
index 000000000..e4c539989
--- /dev/null
+++ b/open-java-format/src/test/resources/com/palantir/javaformat/java/testdata/ojf-issue-101-annotated-lambda-parameters.input
@@ -0,0 +1,29 @@
+import java.util.function.BiFunction;
+import java.util.function.Consumer;
+import java.util.function.Function;
+
+class AnnotatedLambdaParameters {
+    BiFunction<Integer, Integer, Integer> withArgs =
+            (final var x,
+                    @SuppressWarnings("unused")
+                    var y) -> x + y;
+
+    Function<String, Integer> typed = ( @SuppressWarnings( "unused" )   String s )->s.length();
+
+    BiFunction<Integer, Integer, Integer> two = (@Deprecated @SuppressWarnings("unused")
+            var x, var y) -> x + y;
+
+    BiFunction<Integer, Integer, Integer> marker = (@Deprecated var x,
+        @Deprecated final var y) -> x + y;
+
+    Consumer<String> block = (@SuppressWarnings({"unused", "rawtypes"})
+            String s) -> { System.out.println(s); };
+
+    BiFunction<Integer, Integer, Integer> tooLongForOneLine = (@SuppressWarnings("unused") Integer first, @SuppressWarnings("unused") Integer second) -> first + second;
+
+    BiFunction<Integer, Integer, Integer> parametersDoNotFitOnOneLine = (@SuppressWarnings("unused") Integer firstParameterWithAVeryLongName, @SuppressWarnings("unused") Integer secondParameterWithAVeryLongName) -> firstParameterWithAVeryLongName + secondParameterWithAVeryLongName;
+
+    void method(@SuppressWarnings("unused") int y, @Deprecated int z) {
+        @SuppressWarnings("unchecked") Function<Object, String> local = o -> (String) o;
+    }
+}
diff --git a/open-java-format/src/test/resources/com/palantir/javaformat/java/testdata/ojf-issue-101-annotated-lambda-parameters.output b/open-java-format/src/test/resources/com/palantir/javaformat/java/testdata/ojf-issue-101-annotated-lambda-parameters.output
new file mode 100644
index 000000000..41a8338d1
--- /dev/null
+++ b/open-java-format/src/test/resources/com/palantir/javaformat/java/testdata/ojf-issue-101-annotated-lambda-parameters.output
@@ -0,0 +1,30 @@
+import java.util.function.BiFunction;
+import java.util.function.Consumer;
+import java.util.function.Function;
+
+class AnnotatedLambdaParameters {
+    BiFunction<Integer, Integer, Integer> withArgs = (final var x, @SuppressWarnings("unused") var y) -> x + y;
+
+    Function<String, Integer> typed = (@SuppressWarnings("unused") String s) -> s.length();
+
+    BiFunction<Integer, Integer, Integer> two = (@Deprecated @SuppressWarnings("unused") var x, var y) -> x + y;
+
+    BiFunction<Integer, Integer, Integer> marker = (@Deprecated var x, @Deprecated final var y) -> x + y;
+
+    Consumer<String> block = (@SuppressWarnings({"unused", "rawtypes"}) String s) -> {
+        System.out.println(s);
+    };
+
+    BiFunction<Integer, Integer, Integer> tooLongForOneLine =
+            (@SuppressWarnings("unused") Integer first, @SuppressWarnings("unused") Integer second) -> first + second;
+
+    BiFunction<Integer, Integer, Integer> parametersDoNotFitOnOneLine =
+            (@SuppressWarnings("unused") Integer firstParameterWithAVeryLongName,
+                    @SuppressWarnings("unused") Integer secondParameterWithAVeryLongName) ->
+                    firstParameterWithAVeryLongName + secondParameterWithAVeryLongName;
+
+    void method(@SuppressWarnings("unused") int y, @Deprecated int z) {
+        @SuppressWarnings("unchecked")
+        Function<Object, String> local = o -> (String) o;
+    }
+}