diff --git a/apps/oxfmt/conformance/run.ts b/apps/oxfmt/conformance/run.ts
index bc1ae5d7ba617..d73a93dd2af66 100644
--- a/apps/oxfmt/conformance/run.ts
+++ b/apps/oxfmt/conformance/run.ts
@@ -95,8 +95,7 @@ const categories: Category[] = [
     ],
     optionSets: [{ printWidth: 80 }],
     notes: {
-      "comment-inside.js":
-        "html embed expressions not yet implemented; css `${}` indentation bug (TODO)",
+      "comment-inside.js": "html embed expressions not yet implemented",
     },
   },
 ];
diff --git a/apps/oxfmt/conformance/snapshots/conformance.snap.md b/apps/oxfmt/conformance/snapshots/conformance.snap.md
index 6abd6b80cdbd3..598710e1f4098 100644
--- a/apps/oxfmt/conformance/snapshots/conformance.snap.md
+++ b/apps/oxfmt/conformance/snapshots/conformance.snap.md
@@ -68,4 +68,4 @@
 
 | File | Note |
 | :--- | :--- |
-| [comment-inside.js](diffs/xxx-in-js-comment/comment-inside.js.md) | html embed expressions not yet implemented; css `${}` indentation bug (TODO) |
+| [comment-inside.js](diffs/xxx-in-js-comment/comment-inside.js.md) | html embed expressions not yet implemented |
diff --git a/apps/oxfmt/conformance/snapshots/diffs/xxx-in-js-comment/comment-inside.js.md b/apps/oxfmt/conformance/snapshots/diffs/xxx-in-js-comment/comment-inside.js.md
index 818b5358b3535..96b466aebaeb6 100644
--- a/apps/oxfmt/conformance/snapshots/diffs/xxx-in-js-comment/comment-inside.js.md
+++ b/apps/oxfmt/conformance/snapshots/diffs/xxx-in-js-comment/comment-inside.js.md
@@ -1,6 +1,6 @@
 # comment-inside.js
 
-> html embed expressions not yet implemented; css `${}` indentation bug (TODO)
+> html embed expressions not yet implemented
 
 ## Option 1
 
@@ -31,29 +31,7 @@
  
  graphql`
    ${
-@@ -32,17 +32,15 @@
-   }
- `;
- 
- css`
--  ${
--    foo
--    /* comment */
-+  ${foo
-+  /* comment */
-   }
- `;
- css`
--  ${
--    foo
--    /* comment */
-+  ${foo
-+  /* comment */
-   }
- `;
- 
- markdown`${
-@@ -61,7 +59,6 @@
+@@ -61,7 +61,6 @@
    <div>
      ${x(
        foo, // fg
@@ -103,13 +81,15 @@ graphql`
 `;
 
 css`
-  ${foo
-  /* comment */
+  ${
+    foo
+    /* comment */
   }
 `;
 css`
-  ${foo
-  /* comment */
+  ${
+    foo
+    /* comment */
   }
 `;
 
diff --git a/crates/oxc_formatter/src/print/template/embed/css.rs b/crates/oxc_formatter/src/print/template/embed/css.rs
index 47b29881da274..f8c7919f0868f 100644
--- a/crates/oxc_formatter/src/print/template/embed/css.rs
+++ b/crates/oxc_formatter/src/print/template/embed/css.rs
@@ -1,5 +1,6 @@
 use oxc_allocator::{Allocator, StringBuilder};
 use oxc_ast::ast::*;
+use oxc_span::GetSpan;
 
 use crate::{
     IndentWidth,
@@ -102,19 +103,40 @@ pub(super) fn format_css_doc<'a>(
                                 write_text_with_line_breaks(f, part, allocator, indent_width);
                             }
                         } else if let Some(idx) = part.parse::<usize>().ok()
-                            && let Some(expr) = expressions.get(idx)
+                            && let Some(&expr) = expressions.get(idx)
                         {
-                            // Format `${expr}` directly to preserve soft line breaks
-                            // so the printer can decide line breaks based on `printWidth`.
-                            // (Regular template expressions use `RemoveSoftLinesBuffer`
-                            // which forces single-line layout.)
-                            // TODO: Expression indentation is incorrect — Prettier indents
-                            // `${ expr }` with the surrounding CSS block, but we don't.
-                            // See `multiparser-comments/comment-inside.js` css cases.
-                            write!(
-                                f,
-                                [group(&format_args!("${", expr, line_suffix_boundary(), "}"))]
-                            );
+                            // Prettier's `printTemplateExpression()` adds indent+softline when:
+                            // - the original source has newlines in the interpolation
+                            // - AND the expression is a comment-bearing node or Identifier/etc
+                            // For CSS embed, the relevant case is comments inside `${...}`.
+                            let has_newline = f.source_text().has_newline_before(expr.span().start)
+                                || f.source_text().has_newline_after(expr.span().end);
+                            let has_comment = has_newline && {
+                                let comments = f.context().comments();
+                                let leading = comments.comments_before(expr.span().start);
+                                let trailing =
+                                    comments.comments_before_character(expr.span().start, b'}');
+                                !leading.is_empty() || !trailing.is_empty()
+                            };
+
+                            let format_expr = format_with(|f| {
+                                if has_comment {
+                                    write!(
+                                        f,
+                                        [
+                                            indent(&format_args!(
+                                                soft_line_break(),
+                                                expr,
+                                                line_suffix_boundary()
+                                            )),
+                                            soft_line_break()
+                                        ]
+                                    );
+                                } else {
+                                    write!(f, [expr, line_suffix_boundary()]);
+                                }
+                            });
+                            write!(f, [group(&format_args!("${", format_expr, "}"))]);
                         }
                     }
                 }