diff --git a/crates/oxc_minifier/src/peephole/fold_constants.rs b/crates/oxc_minifier/src/peephole/fold_constants.rs
index 3db74ad5d23cf..dce5999ac15f2 100644
--- a/crates/oxc_minifier/src/peephole/fold_constants.rs
+++ b/crates/oxc_minifier/src/peephole/fold_constants.rs
@@ -2,6 +2,7 @@ use oxc_ast::ast::*;
 use oxc_ecmascript::{
     constant_evaluation::{ConstantEvaluation, ConstantValue, DetermineValueType, ValueType},
     side_effects::MayHaveSideEffects,
+    ToJsString,
 };
 use oxc_span::GetSpan;
 use oxc_syntax::operator::{BinaryOperator, LogicalOperator};
@@ -16,6 +17,10 @@ impl<'a> PeepholeOptimizations {
     ///
     /// <https://github.com/google/closure-compiler/blob/v20240609/src/com/google/javascript/jscomp/PeepholeFoldConstants.java>
     pub fn fold_constants_exit_expression(&mut self, expr: &mut Expression<'a>, ctx: Ctx<'a, '_>) {
+        if let Expression::TemplateLiteral(t) = expr {
+            self.try_inline_values_in_template_literal(t, ctx);
+        }
+
         if let Some(folded_expr) = match expr {
             Expression::BinaryExpression(e) => Self::try_fold_binary_expr(e, ctx)
                 .or_else(|| Self::try_fold_binary_typeof_comparison(e, ctx)),
@@ -507,6 +512,64 @@ impl<'a> PeepholeOptimizations {
         }
         None
     }
+
+    /// Inline constant values in template literals
+    ///
+    /// - `foo${1}bar${i}` => `foo1bar${i}`
+    fn try_inline_values_in_template_literal(
+        &mut self,
+        t: &mut TemplateLiteral<'a>,
+        ctx: Ctx<'a, '_>,
+    ) {
+        let has_expr_to_inline = t
+            .expressions
+            .iter()
+            .any(|expr| !expr.may_have_side_effects(&ctx) && expr.to_js_string(&ctx).is_some());
+        if !has_expr_to_inline {
+            return;
+        }
+
+        let mut inline_exprs = Vec::new();
+        let new_exprs =
+            ctx.ast.vec_from_iter(t.expressions.drain(..).enumerate().filter_map(|(idx, expr)| {
+                if expr.may_have_side_effects(&ctx) {
+                    Some(expr)
+                } else if let Some(str) = expr.to_js_string(&ctx) {
+                    inline_exprs.push((idx, str));
+                    None
+                } else {
+                    Some(expr)
+                }
+            }));
+        t.expressions = new_exprs;
+
+        // inline the extracted inline-able expressions into quasis
+        // "current_quasis + extracted_value + next_quasis"
+        for (i, (idx, str)) in inline_exprs.into_iter().enumerate() {
+            let idx = idx - i;
+            let next_quasi = (idx + 1 < t.quasis.len()).then(|| t.quasis.remove(idx + 1));
+            let quasi = &mut t.quasis[idx];
+            let new_raw = quasi.value.raw.into_string()
+                + &Self::escape_string_for_template_literal(&str)
+                + next_quasi.as_ref().map(|q| q.value.raw.as_str()).unwrap_or_default();
+            quasi.value.raw = ctx.ast.atom(&new_raw);
+            let new_cooked = if let (Some(cooked1), Some(cooked2)) =
+                (quasi.value.cooked, next_quasi.as_ref().map(|q| q.value.cooked))
+            {
+                let v =
+                    cooked1.into_string() + &str + cooked2.map(|c| c.as_str()).unwrap_or_default();
+                Some(ctx.ast.atom(&v))
+            } else {
+                None
+            };
+            quasi.value.cooked = new_cooked;
+            if next_quasi.is_some_and(|q| q.tail) {
+                quasi.tail = true;
+            }
+        }
+
+        self.mark_current_function_as_changed();
+    }
 }
 
 /// <https://github.com/google/closure-compiler/blob/v20240609/test/com/google/javascript/jscomp/PeepholeFoldConstantsTest.java>
@@ -1643,6 +1706,18 @@ mod test {
         fold("+(void unknown())", "+void unknown()");
     }
 
+    #[test]
+    fn test_inline_values_in_template_literal() {
+        fold("`foo${1}`", "'foo1'");
+        fold("`foo${1}bar`", "'foo1bar'");
+        fold("`foo${1}bar${2}baz`", "'foo1bar2baz'");
+        fold("`foo${1}bar${2}baz${3}qux`", "'foo1bar2baz3qux'");
+        fold("`foo${1}${i}`", "`foo1${i}`");
+        fold("`foo${'${}'}`", "'foo${}'");
+        fold("`foo${'${}'}${i}`", "`foo\\${}${i}`");
+        fold_same("foo`foo${1}bar`");
+    }
+
     mod bigint {
         use super::{
             fold, fold_same, MAX_SAFE_FLOAT, MAX_SAFE_INT, NEG_MAX_SAFE_FLOAT, NEG_MAX_SAFE_INT,
diff --git a/crates/oxc_minifier/src/peephole/replace_known_methods.rs b/crates/oxc_minifier/src/peephole/replace_known_methods.rs
index 6f895580eeed9..ddea9da67877f 100644
--- a/crates/oxc_minifier/src/peephole/replace_known_methods.rs
+++ b/crates/oxc_minifier/src/peephole/replace_known_methods.rs
@@ -739,11 +739,7 @@ impl<'a> PeepholeOptimizations {
                         SPAN,
                         false,
                         TemplateElementValue {
-                            raw: s
-                                .cow_replace("\\", "\\\\")
-                                .cow_replace("`", "\\`")
-                                .cow_replace("${", "\\${")
-                                .cow_replace("\r\n", "\\r\n")
+                            raw: Self::escape_string_for_template_literal(&s)
                                 .into_in(ctx.ast.allocator),
                             cooked: Some(cooked),
                         },
@@ -760,6 +756,20 @@ impl<'a> PeepholeOptimizations {
         }
     }
 
+    pub fn escape_string_for_template_literal(s: &str) -> Cow<'_, str> {
+        if s.contains(['\\', '`', '$', '\r']) {
+            Cow::Owned(
+                s.cow_replace("\\", "\\\\")
+                    .cow_replace("`", "\\`")
+                    .cow_replace("${", "\\${")
+                    .cow_replace("\r\n", "\\r\n")
+                    .into_owned(),
+            )
+        } else {
+            Cow::Borrowed(s)
+        }
+    }
+
     fn try_fold_known_property_access(&mut self, node: &mut Expression<'a>, ctx: Ctx<'a, '_>) {
         let (name, object, span) = match &node {
             Expression::StaticMemberExpression(member) if !member.optional => {
@@ -1761,7 +1771,7 @@ mod test {
         test("x = ''.concat(a, 'b', c)", "x = `${a}b${c}`");
         test("x = ''.concat('a', b, 'c')", "x = `a${b}c`");
         test("x = ''.concat('a', b, 'c', d, 'e', f, 'g', h, 'i', j, 'k', l, 'm', n, 'o', p, 'q', r, 's', t)", "x = `a${b}c${d}e${f}g${h}i${j}k${l}m${n}o${p}q${r}s${t}`");
-        test("x = ''.concat(a, 1)", "x = `${a}${1}`"); // inlining 1 is not implemented yet
+        test("x = ''.concat(a, 1)", "x = `${a}1`");
 
         test("x = '\\\\s'.concat(a)", "x = `\\\\s${a}`");
         test("x = '`'.concat(a)", "x = `\\`${a}`");