diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7cbbb653666e..549d7efa84ec 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,8 @@
 
 ### Fixes
 
+- `[jest-snapshot]` Inline snapshots: do not indent empty lines ([#8277](https://github.com/facebook/jest/pull/8277))
+
 ### Chore & Maintenance
 
 ### Performance
diff --git a/e2e/__tests__/__snapshots__/toMatchInlineSnapshot.test.ts.snap b/e2e/__tests__/__snapshots__/toMatchInlineSnapshot.test.ts.snap
index 6de95cb08b08..67f659ceb42c 100644
--- a/e2e/__tests__/__snapshots__/toMatchInlineSnapshot.test.ts.snap
+++ b/e2e/__tests__/__snapshots__/toMatchInlineSnapshot.test.ts.snap
@@ -40,6 +40,30 @@ test('inline snapshots', () =>
 
 `;
 
+exports[`do not indent empty lines: initial write 1`] = `
+test('inline snapshots', () =>
+  expect(\`hello
+
+world\`).toMatchInlineSnapshot(\`
+    "hello
+
+    world"
+  \`));
+
+`;
+
+exports[`do not indent empty lines: snapshot passed 1`] = `
+test('inline snapshots', () =>
+  expect(\`hello
+
+world\`).toMatchInlineSnapshot(\`
+    "hello
+
+    world"
+  \`));
+
+`;
+
 exports[`handles property matchers: initial write 1`] = `
 test('handles property matchers', () => {
   expect({createdAt: new Date()}).toMatchInlineSnapshot(
diff --git a/e2e/__tests__/toMatchInlineSnapshot.test.ts b/e2e/__tests__/toMatchInlineSnapshot.test.ts
index 655a32d42c22..88219a30a261 100644
--- a/e2e/__tests__/toMatchInlineSnapshot.test.ts
+++ b/e2e/__tests__/toMatchInlineSnapshot.test.ts
@@ -71,6 +71,33 @@ test('basic support', () => {
   }
 });
 
+test('do not indent empty lines', () => {
+  const filename = 'empty-line-indent.test.js';
+  const template = makeTemplate(
+    `test('inline snapshots', () => expect($1).toMatchInlineSnapshot());\n`,
+  );
+
+  {
+    writeFiles(TESTS_DIR, {
+      [filename]: template(['`hello\n\nworld`']),
+    });
+    const {stderr, status} = runJest(DIR, ['-w=1', '--ci=false', filename]);
+    const fileAfter = readFile(filename);
+    expect(stderr).toMatch('1 snapshot written from 1 test suite.');
+    expect(status).toBe(0);
+    expect(wrap(fileAfter)).toMatchSnapshot('initial write');
+  }
+
+  {
+    const {stderr, status} = runJest(DIR, ['-w=1', '--ci=false', filename]);
+    const fileAfter = readFile(filename);
+    expect(stderr).toMatch('Snapshots:   1 passed, 1 total');
+    expect(stderr).not.toMatch('1 snapshot written from 1 test suite.');
+    expect(status).toBe(0);
+    expect(wrap(fileAfter)).toMatchSnapshot('snapshot passed');
+  }
+});
+
 test('handles property matchers', () => {
   const filename = 'handle-property-matchers.test.js';
   const template = makeTemplate(`test('handles property matchers', () => {
diff --git a/packages/jest-snapshot/src/__tests__/inline_snapshots.test.ts b/packages/jest-snapshot/src/__tests__/inline_snapshots.test.ts
index fd47d3d0348a..a6173b61cb86 100644
--- a/packages/jest-snapshot/src/__tests__/inline_snapshots.test.ts
+++ b/packages/jest-snapshot/src/__tests__/inline_snapshots.test.ts
@@ -304,3 +304,36 @@ test('saveInlineSnapshots() indents snapshots after prettier reformats', () => {
       '  `));\n',
   );
 });
+
+test('saveInlineSnapshots() does not indent empty lines', () => {
+  const filename = path.join(__dirname, 'my.test.js');
+  (fs.readFileSync as jest.Mock).mockImplementation(
+    () =>
+      "it('is a test', () => expect(`hello\n\nworld`).toMatchInlineSnapshot());\n",
+  );
+  (prettier.resolveConfig.sync as jest.Mock).mockReturnValue({
+    bracketSpacing: false,
+    singleQuote: true,
+  });
+
+  saveInlineSnapshots(
+    [
+      {
+        frame: {column: 9, file: filename, line: 3} as Frame,
+        snapshot: `\nhello\n\nworld\n`,
+      },
+    ],
+    prettier,
+    babelTraverse,
+  );
+
+  expect(fs.writeFileSync).toHaveBeenCalledWith(
+    filename,
+    "it('is a test', () =>\n" +
+      '  expect(`hello\n\nworld`).toMatchInlineSnapshot(`\n' +
+      '    hello\n' +
+      '\n' +
+      '    world\n' +
+      '  `));\n',
+  );
+});
diff --git a/packages/jest-snapshot/src/index.ts b/packages/jest-snapshot/src/index.ts
index 8d3d12398c8f..b579e279e7a8 100644
--- a/packages/jest-snapshot/src/index.ts
+++ b/packages/jest-snapshot/src/index.ts
@@ -95,13 +95,16 @@ function stripAddedIndentation(inlineSnapshot: string) {
   }
 
   for (let i = 1; i < lines.length - 1; i++) {
-    if (lines[i].indexOf(indentation) !== 0) {
-      // All lines except first and last should have the same indent as the
-      // first line (or more). If this isn't the case we don't want to touch it.
-      return inlineSnapshot;
-    }
+    if (lines[i] !== '') {
+      if (lines[i].indexOf(indentation) !== 0) {
+        // All lines except first and last should either be blank or have the same
+        // indent as the first line (or more). If this isn't the case we don't
+        // want to touch the snapshot at all.
+        return inlineSnapshot;
+      }
 
-    lines[i] = lines[i].substr(indentation.length);
+      lines[i] = lines[i].substr(indentation.length);
+    }
   }
 
   // Last line is a special case because it won't have the same indent as others
diff --git a/packages/jest-snapshot/src/inline_snapshots.ts b/packages/jest-snapshot/src/inline_snapshots.ts
index 3e256df2912f..846d5e80d692 100644
--- a/packages/jest-snapshot/src/inline_snapshots.ts
+++ b/packages/jest-snapshot/src/inline_snapshots.ts
@@ -126,6 +126,11 @@ const indent = (snapshot: string, numIndents: number, indentation: string) => {
         // First line is either a 1-line snapshot or a blank line.
         return line;
       } else if (index !== lines.length - 1) {
+        // Do not indent empty lines.
+        if (line === '') {
+          return line;
+        }
+
         // Not last line, indent one level deeper than expect call.
         return indentation.repeat(numIndents + 1) + line;
       } else {