diff --git a/crates/ide-assists/src/handlers/inline_call.rs b/crates/ide-assists/src/handlers/inline_call.rs
index 6f028e58d0cd..be244a619eb5 100644
--- a/crates/ide-assists/src/handlers/inline_call.rs
+++ b/crates/ide-assists/src/handlers/inline_call.rs
@@ -19,7 +19,7 @@ use ide_db::{
 };
 use itertools::{Itertools, izip};
 use syntax::{
-    AstNode, NodeOrToken, SyntaxKind,
+    AstNode,
     ast::{
         self, HasArgList, HasGenericArgs, Pat, PathExpr, edit::IndentLevel, edit_in_place::Indent,
     },
@@ -388,27 +388,6 @@ fn inline(
         }
     }
 
-    // We should place the following code after last usage of `usages_for_locals`
-    // because `ted::replace` will change the offset in syntax tree, which makes
-    // `FileReference` incorrect
-    if let Some(imp) =
-        sema.ancestors_with_macros(fn_body.syntax().clone()).find_map(ast::Impl::cast)
-    {
-        if !node.syntax().ancestors().any(|anc| &anc == imp.syntax()) {
-            if let Some(t) = imp.self_ty() {
-                while let Some(self_tok) = body
-                    .syntax()
-                    .descendants_with_tokens()
-                    .filter_map(NodeOrToken::into_token)
-                    .find(|tok| tok.kind() == SyntaxKind::SELF_TYPE_KW)
-                {
-                    let replace_with = t.clone_subtree().syntax().clone_for_update();
-                    ted::replace(self_tok, replace_with);
-                }
-            }
-        }
-    }
-
     let mut func_let_vars: BTreeSet<String> = BTreeSet::new();
 
     // grab all of the local variable declarations in the function
@@ -534,11 +513,17 @@ fn inline(
         }
     }
 
-    if let Some(generic_arg_list) = generic_arg_list.clone() {
-        if let Some((target, source)) = &sema.scope(node.syntax()).zip(sema.scope(fn_body.syntax()))
-        {
-            PathTransform::function_call(target, source, function, generic_arg_list)
-                .apply(body.syntax());
+    // Apply PathTransform for path transformations when needed
+    if let Some((target, source)) = &sema.scope(node.syntax()).zip(sema.scope(fn_body.syntax())) {
+        let needs_transformation = generic_arg_list.is_some() || !target.has_same_self_type(source);
+
+        if needs_transformation {
+            let path_transform = if let Some(generic_arg_list) = generic_arg_list.clone() {
+                PathTransform::function_call(target, source, function, generic_arg_list)
+            } else {
+                PathTransform::generic_transformation(target, source)
+            };
+            path_transform.apply(body.syntax());
         }
     }
 
@@ -1832,4 +1817,72 @@ fn f() {
 "#,
         );
     }
+
+    #[test]
+    fn inline_call_generic_self_constructor() {
+        check_assist(
+            inline_call,
+            r#"
+struct Generic<T>(T);
+
+impl<T> Generic<T> {
+    fn new(value: T) -> Self {
+        Self(value)
+    }
+}
+
+fn main() {
+    let x = Generic::<i32>::new$0(42);
+}
+"#,
+            r#"
+struct Generic<T>(T);
+
+impl<T> Generic<T> {
+    fn new(value: T) -> Self {
+        Self(value)
+    }
+}
+
+fn main() {
+    let x = Generic(42);
+}
+"#,
+        )
+    }
+
+    #[test]
+    fn inline_call_generic_self_type_position() {
+        check_assist(
+            inline_call,
+            r#"
+struct Generic<T>(T);
+
+impl<T> Generic<T> {
+    fn identity(self) -> Self {
+        self
+    }
+}
+
+fn main() {
+    let x = Generic(42);
+    let y = x.identity$0();
+}
+"#,
+            r#"
+struct Generic<T>(T);
+
+impl<T> Generic<T> {
+    fn identity(self) -> Self {
+        self
+    }
+}
+
+fn main() {
+    let x = Generic(42);
+    let y = x;
+}
+"#,
+        )
+    }
 }
diff --git a/crates/ide-db/src/path_transform.rs b/crates/ide-db/src/path_transform.rs
index 232648af661f..f0e0840db182 100644
--- a/crates/ide-db/src/path_transform.rs
+++ b/crates/ide-db/src/path_transform.rs
@@ -248,6 +248,47 @@ fn preorder_rev(item: &SyntaxNode) -> impl Iterator<Item = SyntaxNode> {
     x.into_iter().rev()
 }
 
+fn is_path_in_expression_context(path: &ast::Path) -> bool {
+    let mut current = path.syntax().parent();
+    while let Some(node) = current {
+        // Expression contexts where we need bare type names
+        if let Some(call_expr) = ast::CallExpr::cast(node.clone()) {
+            if let Some(expr) = call_expr.expr() {
+                if expr.syntax().text_range().contains_range(path.syntax().text_range()) {
+                    return true;
+                }
+            }
+        }
+        if ast::PathExpr::cast(node.clone()).is_some() {
+            return true;
+        }
+        if let Some(record_expr) = ast::RecordExpr::cast(node.clone()) {
+            if let Some(record_path) = record_expr.path() {
+                if record_path.syntax().text_range().contains_range(path.syntax().text_range()) {
+                    return true;
+                }
+            }
+        }
+        // Stop at type/pattern boundaries
+        if ast::Type::cast(node.clone()).is_some()
+            || ast::Pat::cast(node.clone()).is_some()
+            || ast::RetType::cast(node.clone()).is_some()
+        {
+            return false;
+        }
+        current = node.parent();
+    }
+    false
+}
+
+fn get_bare_type_name(ty_str: &str) -> String {
+    if let Some(angle_pos) = ty_str.find('<') {
+        ty_str[..angle_pos].to_owned()
+    } else {
+        ty_str.to_owned()
+    }
+}
+
 impl Ctx<'_> {
     fn apply(&self, item: &SyntaxNode) {
         // `transform_path` may update a node's parent and that would break the
@@ -413,10 +454,17 @@ impl Ctx<'_> {
                         true,
                     )
                     .ok()?;
-                let ast_ty = make::ty(ty_str).clone_for_update();
+
+                // Context-aware replacement
+                let replacement = if is_path_in_expression_context(&path) {
+                    let bare_name = get_bare_type_name(ty_str);
+                    make::ty(&bare_name).clone_for_update()
+                } else {
+                    make::ty(ty_str).clone_for_update()
+                };
 
                 if let Some(adt) = ty.as_adt() {
-                    if let ast::Type::PathType(path_ty) = &ast_ty {
+                    if let ast::Type::PathType(path_ty) = &replacement {
                         let cfg = ImportPathConfig {
                             prefer_no_std: false,
                             prefer_prelude: true,
@@ -439,7 +487,7 @@ impl Ctx<'_> {
                     }
                 }
 
-                ted::replace(path.syntax(), ast_ty.syntax());
+                ted::replace(path.syntax(), replacement.syntax());
             }
             hir::PathResolution::Local(_)
             | hir::PathResolution::Def(_)