diff --git a/src/services/formatting/smartIndenter.ts b/src/services/formatting/smartIndenter.ts
index c7f762fea64..30da55b8f37 100644
--- a/src/services/formatting/smartIndenter.ts
+++ b/src/services/formatting/smartIndenter.ts
@@ -429,6 +429,7 @@ namespace ts.formatting {
                 case SyntaxKind.ArrayBindingPattern:
                 case SyntaxKind.ObjectBindingPattern:
                 case SyntaxKind.JsxElement:
+                case SyntaxKind.FunctionType:
                     return true;
             }
             return false;
diff --git a/tests/cases/fourslash/formattingFunctionType.ts b/tests/cases/fourslash/formattingFunctionType.ts
new file mode 100644
index 00000000000..0e63292b5ed
--- /dev/null
+++ b/tests/cases/fourslash/formattingFunctionType.ts
@@ -0,0 +1,17 @@
+/// <reference path='fourslash.ts' />
+
+////function renderElement(
+////    element: Element,
+////    renderNode: (
+////    node: Node/*paramInFuntionType*/
+/////*paramIndent*/
+////    ) => void
+////): void {
+////}
+
+format.document();
+
+goTo.marker("paramInFuntionType");
+verify.currentLineContentIs("        node: Node");
+goTo.marker("paramIndent");
+verify.indentationIs(8);
\ No newline at end of file