diff --git a/pkgs/racket-test-core/tests/racket/optimize.rktl b/pkgs/racket-test-core/tests/racket/optimize.rktl
index bb1bcca073..c592cd45de 100644
--- a/pkgs/racket-test-core/tests/racket/optimize.rktl
+++ b/pkgs/racket-test-core/tests/racket/optimize.rktl
@@ -6583,4 +6583,12 @@
 
 ;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
 
+(module regression-test-to-make-sure-inlining-does-not-go-crazy racket/base
+  (define (f x)
+    (lambda (y)
+      (letrec ([recursion (f x)])
+        (+ x y)))))
+
+;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
+
 (report-errs)
diff --git a/racket/src/racket/src/optimize.c b/racket/src/racket/src/optimize.c
index f596bb9dc1..6dbf879580 100644
--- a/racket/src/racket/src/optimize.c
+++ b/racket/src/racket/src/optimize.c
@@ -8096,6 +8096,8 @@ static Scheme_Object *optimize_lets(Scheme_Object *form, Optimize_Info *info, in
                avoid the possibility of N^2 behavior. */
             if (!OPT_DISCOURAGE_EARLY_INLINE)
               rhs_info->letrec_not_twice++;
+            inline_fuel = rhs_info->inline_fuel;
+            rhs_info->inline_fuel >>= 1;
             use_psize = rhs_info->use_psize;
             rhs_info->use_psize = info->use_psize;
 
@@ -8111,6 +8113,7 @@ static Scheme_Object *optimize_lets(Scheme_Object *form, Optimize_Info *info, in
             
             if (!OPT_DISCOURAGE_EARLY_INLINE)
               --rhs_info->letrec_not_twice;
+            rhs_info->inline_fuel = inline_fuel;
             rhs_info->use_psize = use_psize;
 
             irlv->value = value;