diff --git a/src/gt4py/next/iterator/transforms/inline_lambdas.py b/src/gt4py/next/iterator/transforms/inline_lambdas.py
index b7eb45d156..a41f74ebc1 100644
--- a/src/gt4py/next/iterator/transforms/inline_lambdas.py
+++ b/src/gt4py/next/iterator/transforms/inline_lambdas.py
@@ -71,9 +71,9 @@ def inline_lambda(  # see todo above
             if eligible
         )
     )
-    syms: set[str] = node.fun.expr.pre_walk_values().if_isinstance(ir.Sym).getattr("id").to_set()
+    syms: set[str] = node.fun.pre_walk_values().if_isinstance(ir.Sym).getattr("id").to_set()
     clashes = refs & syms
-    expr = node.fun.expr
+    fun = node.fun
     if clashes:
         # TODO(tehrengruber): find a better way of generating new symbols in `name_map` that don't collide with each other. E.g. this must still work:
         # (lambda arg, arg_: (lambda arg_: ...)(arg))(a, b)  # noqa: ERA001 [commented-out-code]
@@ -82,14 +82,17 @@ def inline_lambda(  # see todo above
         for sym in clashes:
             name_map[sym] = ir_misc.unique_symbol(sym, refs | syms | {*name_map.values()})
 
-        expr = RenameSymbols().visit(expr, name_map=name_map)
+        # Let's rename the symbols (including params) of the function.
+        # If we would like to preserve the original param names, we could alternatively
+        # rename the eligible symrefs in `args`.
+        fun = RenameSymbols().visit(fun, name_map=name_map)
 
     symbol_map = {
         param.id: arg
-        for param, arg, eligible in zip(node.fun.params, node.args, eligible_params)
+        for param, arg, eligible in zip(fun.params, node.args, eligible_params)
         if eligible
     }
-    new_expr = RemapSymbolRefs().visit(expr, symbol_map=symbol_map)
+    new_expr = RemapSymbolRefs().visit(fun.expr, symbol_map=symbol_map)
 
     if all(eligible_params):
         new_expr.location = node.location
@@ -97,9 +100,7 @@ def inline_lambda(  # see todo above
         new_expr = ir.FunCall(
             fun=ir.Lambda(
                 params=[
-                    param
-                    for param, eligible in zip(node.fun.params, eligible_params)
-                    if not eligible
+                    param for param, eligible in zip(fun.params, eligible_params) if not eligible
                 ],
                 expr=new_expr,
             ),
diff --git a/tests/next_tests/unit_tests/iterator_tests/transforms_tests/test_inline_lambdas.py b/tests/next_tests/unit_tests/iterator_tests/transforms_tests/test_inline_lambdas.py
index c10d48ad06..005e9b047c 100644
--- a/tests/next_tests/unit_tests/iterator_tests/transforms_tests/test_inline_lambdas.py
+++ b/tests/next_tests/unit_tests/iterator_tests/transforms_tests/test_inline_lambdas.py
@@ -55,6 +55,20 @@
             False: im.plus(im.call("opaque")(), im.call("opaque")()),
         },
     ),
+    (
+        # symbol clash when partially inlining (opcount preserving)
+        "symbol_clash",
+        # (λ(x, y) → f(x, x + y))(y + y, x)
+        im.call(im.lambda_("x", "y")(im.call("f")("x", im.plus("x", "y"))))(im.plus("y", "y"), "x"),
+        {
+            # (λ(x_) → f(x_, x_ + x))(y + y)
+            True: im.call(im.lambda_("x_")(im.call("f")("x_", im.plus("x_", "x"))))(
+                im.plus("y", "y")
+            ),
+            # f(y + y, (y + y) + x)  # noqa: ERA001
+            False: im.call("f")(im.plus("y", "y"), im.plus(im.plus("y", "y"), "x")),
+        },
+    ),
 ]