diff --git a/crates/gpui/src/elements/text.rs b/crates/gpui/src/elements/text.rs
index 942a0a326526431dc65f389e9cff67bac252d571..770c1f871432afbecc9ffd4e903dfeddcfcba6ee 100644
--- a/crates/gpui/src/elements/text.rs
+++ b/crates/gpui/src/elements/text.rs
@@ -372,11 +372,17 @@ impl TextLayout {
                         (None, "".into(), TruncateFrom::End)
                     };
 
+                // Only use cached layout if:
+                // 1. We have a cached size
+                // 2. wrap_width matches (or both are None)
+                // 3. truncate_width is None (if truncate_width is Some, we need to re-layout
+                //    because the previous layout may have been computed without truncation)
                 if let Some(text_layout) = element_state.0.borrow().as_ref()
-                    && text_layout.size.is_some()
+                    && let Some(size) = text_layout.size
                     && (wrap_width.is_none() || wrap_width == text_layout.wrap_width)
+                    && truncate_width.is_none()
                 {
-                    return text_layout.size.unwrap();
+                    return size;
                 }
 
                 let mut line_wrapper = cx.text_system().line_wrapper(text_style.font(), font_size);
diff --git a/crates/ui/src/components/label/label_like.rs b/crates/ui/src/components/label/label_like.rs
index f6e7a1b893d54fff425618d5c604f591144a7385..03fde4083d5e9a8e07f38c830edd5116f14e6d70 100644
--- a/crates/ui/src/components/label/label_like.rs
+++ b/crates/ui/src/components/label/label_like.rs
@@ -241,10 +241,16 @@ impl RenderOnce for LabelLike {
             .when(self.strikethrough, |this| this.line_through())
             .when(self.single_line, |this| this.whitespace_nowrap())
             .when(self.truncate, |this| {
-                this.overflow_x_hidden().text_ellipsis()
+                this.min_w_0()
+                    .overflow_x_hidden()
+                    .whitespace_nowrap()
+                    .text_ellipsis()
             })
             .when(self.truncate_start, |this| {
-                this.overflow_x_hidden().text_ellipsis_start()
+                this.min_w_0()
+                    .overflow_x_hidden()
+                    .whitespace_nowrap()
+                    .text_ellipsis_start()
             })
             .text_color(color)
             .font_weight(