diff --git a/extensions/html-language-features/server/src/modes/formatting.ts b/extensions/html-language-features/server/src/modes/formatting.ts
index aca8ee3b3c2..6b8c669a6cb 100644
--- a/extensions/html-language-features/server/src/modes/formatting.ts
+++ b/extensions/html-language-features/server/src/modes/formatting.ts
@@ -54,7 +54,11 @@ export async function format(languageModes: LanguageModes, document: TextDocumen
 	// perform a html format and apply changes to a new document
 	const htmlMode = languageModes.getMode('html')!;
 	const htmlEdits = await htmlMode.format!(document, formatRange, formattingOptions, settings);
-	const htmlFormattedContent = TextDocument.applyEdits(document, htmlEdits);
+	let htmlFormattedContent = TextDocument.applyEdits(document, htmlEdits);
+	if (formattingOptions.insertFinalNewline && endOffset === content.length && !htmlFormattedContent.endsWith('\n')) {
+		htmlFormattedContent = htmlFormattedContent + '\n';
+		htmlEdits.push(TextEdit.insert(endPos, '\n'));
+	}
 	const newDocument = TextDocument.create(document.uri + '.tmp', document.languageId, document.version, htmlFormattedContent);
 	try {
 		// run embedded formatters on html formatted content: - formatters see correct initial indent
diff --git a/extensions/html-language-features/server/src/modes/htmlMode.ts b/extensions/html-language-features/server/src/modes/htmlMode.ts
index baca7e0369f..58a3ded2bee 100644
--- a/extensions/html-language-features/server/src/modes/htmlMode.ts
+++ b/extensions/html-language-features/server/src/modes/htmlMode.ts
@@ -49,9 +49,6 @@ export function getHTMLMode(htmlLanguageService: HTMLLanguageService, workspace:
 			} else {
 				formatSettings.contentUnformatted = 'script';
 			}
-			if (formatParams.insertFinalNewline) {
-				formatSettings.endWithNewline = true;
-			}
 			merge(formatParams, formatSettings);
 			return htmlLanguageService.format(document, range, formatSettings);
 		},
diff --git a/extensions/html-language-features/server/src/test/formatting.test.ts b/extensions/html-language-features/server/src/test/formatting.test.ts
index ebc319d20b6..adf9b21e177 100644
--- a/extensions/html-language-features/server/src/test/formatting.test.ts
+++ b/extensions/html-language-features/server/src/test/formatting.test.ts
@@ -85,11 +85,12 @@ suite('HTML Embedded Formatting', () => {
 	});
 
 	test('EndWithNewline', async () => {
-		const options : FormattingOptions = FormattingOptions.create(2, true);
+		const options: FormattingOptions = FormattingOptions.create(2, true);
 		options.insertFinalNewline = true;
-		
+
 		await assertFormat('<html><body><p>Hello</p></body></html>', '<html>\n\n<body>\n  <p>Hello</p>\n</body>\n\n</html>\n', {}, options);
 		await assertFormat('<html>|<body><p>Hello</p></body>|</html>', '<html><body>\n  <p>Hello</p>\n</body></html>', {}, options);
+		await assertFormat('<html>|<body><p>Hello</p></body></html>|', '<html><body>\n  <p>Hello</p>\n</body>\n\n</html>\n', {}, options);
 		await assertFormat('<html><head><script>\nvar x=1;\n</script></head></html>', '<html>\n\n<head>\n  <script>\n    var x = 1;\n  </script>\n</head>\n\n</html>\n', {}, options);
 	});
 
