diff --git a/web/src/info_overlay.ts b/web/src/info_overlay.ts
index 4a319efb21..15027807ad 100644
--- a/web/src/info_overlay.ts
+++ b/web/src/info_overlay.ts
@@ -65,12 +65,14 @@ const markdown_help_rows = [
     },
     {
         markdown: "@**Joe Smith**",
-        output_html: '<p><span class="user-mention">@Joe Smith</span></p>',
+        output_html:
+            '<p><span class="user-mention"><span class="mention-content-wrapper">@Joe Smith</span></span></p>',
         effect_html: "(notifies Joe Smith)",
     },
     {
         markdown: "@_**Joe Smith**",
-        output_html: '<p><span class="user-mention">Joe Smith</span></p>',
+        output_html:
+            '<p><span class="user-mention"><span class="mention-content-wrapper">Joe Smith</span></span></p>',
         effect_html: "(links to profile but doesn't notify Joe Smith)",
     },
     {
@@ -85,7 +87,7 @@ const markdown_help_rows = [
         // code for that case works ... but it might be better to just
         // user your own name/user ID anyway.
         output_html:
-            '<p><span class="user-group-mention" data-user-group-id="0">@support team</span></p>',
+            '<p><span class="user-group-mention" data-user-group-id="0"><span class="mention-content-wrapper">@support team</span></span></p>',
         effect_html: "(notifies <b>support team</b> group)",
     },
     {
diff --git a/web/src/rendered_markdown.ts b/web/src/rendered_markdown.ts
index 4804c222c7..7f401b73d7 100644
--- a/web/src/rendered_markdown.ts
+++ b/web/src/rendered_markdown.ts
@@ -5,6 +5,7 @@ import assert from "minimalistic-assert";
 
 import code_buttons_container from "../templates/code_buttons_container.hbs";
 import render_markdown_timestamp from "../templates/markdown_timestamp.hbs";
+import render_mention_content_wrapper from "../templates/mention_content_wrapper.hbs";
 
 import * as blueslip from "./blueslip";
 import {show_copied_confirmation} from "./copied_tooltip";
@@ -77,6 +78,16 @@ function get_message_for_message_content($content: JQuery): Message | undefined
     return message_store.get(message_id);
 }
 
+// Function to safely wrap mentioned names in a DOM element.
+// This enables mentions to display inline, while adjusting
+// the outer element's font-size for better appearance on
+// lines of message text.
+function wrap_mention_content_in_dom_element(element: HTMLElement): HTMLElement {
+    const mention_text = $(element).text();
+    $(element).html(render_mention_content_wrapper({mention_text}));
+    return element;
+}
+
 // Helper function to update a mentioned user's name.
 export function set_name_in_mention_element(
     element: HTMLElement,
@@ -91,6 +102,7 @@ export function set_name_in_mention_element(
             display_text = $t({defaultMessage: "{name} (guest)"}, {name});
         }
         $(element).text(display_text);
+        wrap_mention_content_in_dom_element(element);
         return;
     }
 
@@ -99,6 +111,8 @@ export function set_name_in_mention_element(
     } else {
         $(element).text("@" + name);
     }
+
+    wrap_mention_content_in_dom_element(element);
 }
 
 export const update_elements = ($content: JQuery): void => {
@@ -153,11 +167,14 @@ export const update_elements = ($content: JQuery): void => {
                 if (person === undefined) {
                     people.add_inaccessible_user(user_id);
                 }
+                wrap_mention_content_in_dom_element(this);
                 return;
             }
 
             set_name_in_mention_element(this, person.full_name, user_id);
         }
+
+        wrap_mention_content_in_dom_element(this);
     });
 
     $content.find(".topic-mention").each(function (): void {
@@ -166,6 +183,8 @@ export const update_elements = ($content: JQuery): void => {
         if (message && message.topic_wildcard_mentioned) {
             $(this).addClass("user-mention-me");
         }
+
+        wrap_mention_content_in_dom_element(this);
     });
 
     $content.find(".user-group-mention").each(function (): void {
diff --git a/web/styles/rendered_markdown.css b/web/styles/rendered_markdown.css
index e4fda2cce4..6cd06581b8 100644
--- a/web/styles/rendered_markdown.css
+++ b/web/styles/rendered_markdown.css
@@ -169,7 +169,15 @@
         padding: 0 3px;
         border-radius: 3px;
         white-space: nowrap;
-        display: inline-block;
+        /* Reduce the font-size to reduce the
+           footprint of the background highlight. */
+        font-size: 0.95em;
+    }
+
+    .mention-content-wrapper {
+        /* Restore the font-size to match the rest
+           of the message area. */
+        font-size: 1.0526em;
     }
 
     .user-mention {
diff --git a/web/templates/mention_content_wrapper.hbs b/web/templates/mention_content_wrapper.hbs
new file mode 100644
index 0000000000..bd14a52ce9
--- /dev/null
+++ b/web/templates/mention_content_wrapper.hbs
@@ -0,0 +1,3 @@
+{{~!-- --~}}
+<span class="mention-content-wrapper">{{ mention_text }}</span>
+{{~!-- --~}}