diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index fa6680684..f771c9428 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -18,6 +18,7 @@ Scripting improvements
 - ``$fish_user_paths`` is now automatically deduplicated to fix a common user error of appending to it in config.fish when it is universal (:issue:`8117`). :ref:`fish_add_path <cmd-fish_add_path>` remains the recommended way to add to $PATH.
 - ``return`` can now be used outside of functions. In scripts it does the same thing as :ref:`exit <cmd-exit>`, in the commandline it sets ``$status`` without exiting (:issue:`8148`).
 - An oversight prevented all syntax checks from running on commands given to ``fish -c`` (:issue:`8171`).
+- ``fish_indent`` now correctly reformats tokens that end with a backslash followed by a newline (:issue:`8197`).
 
 Interactive improvements
 ------------------------
diff --git a/src/fish_indent.cpp b/src/fish_indent.cpp
index 4f2e06e0b..26830a134 100644
--- a/src/fish_indent.cpp
+++ b/src/fish_indent.cpp
@@ -550,7 +550,28 @@ struct pretty_printer_t {
 
     template <type_t Type>
     void emit_node_text(const leaf_t<Type> &node) {
-        emit_text(node.range, gap_text_flags_before_node(node));
+        source_range_t range = node.range;
+
+        // Weird special-case: a token may end in an escaped newline. Notably, the newline is
+        // not part of the following gap text, handle indentation here (#8197).
+        bool ends_with_escaped_nl = node.range.length >= 2 &&
+                                    source.at(node.range.end() - 2) == L'\\' &&
+                                    source.at(node.range.end() - 1) == L'\n';
+        if (ends_with_escaped_nl) {
+            range = {range.start, range.length - 2};
+        }
+
+        emit_text(range, gap_text_flags_before_node(node));
+
+        if (ends_with_escaped_nl) {
+            // By convention, escaped newlines are preceded with a space.
+            output.append(L" \\\n");
+            // TODO Maybe check "allow_escaped_newlines" and use the precomputed indents.
+            // The cases where this matters are probably very rare.
+            current_indent++;
+            emit_space_or_indent();
+            current_indent--;
+        }
     }
 
     // Emit one newline.
diff --git a/tests/checks/indent.fish b/tests/checks/indent.fish
index 7f41361aa..6c06c3e98 100644
--- a/tests/checks/indent.fish
+++ b/tests/checks/indent.fish
@@ -416,3 +416,19 @@ echo "\
 a=1 \\
     a=2 echo" | $fish_indent --check
 echo $status #CHECK: 0
+
+echo 'first-word\\
+ second-word' | $fish_indent
+# CHECK: first-word \
+# CHECK: {{^}}    second-word
+
+echo 'begin
+    first-indented-word\\
+        second-indented-word' | $fish_indent
+# CHECK: begin
+# CHECK: {{^}}    first-indented-word \
+# CHECK: {{^}}        second-indented-word
+
+echo 'multiline-\\
+-word' | $fish_indent --check
+echo $status #CHECK: 0