diff --git a/src/vs/editor/common/model/indentationGuesser.ts b/src/vs/editor/common/model/indentationGuesser.ts
index ba6a7f64089..b3fb3ce0ac2 100644
--- a/src/vs/editor/common/model/indentationGuesser.ts
+++ b/src/vs/editor/common/model/indentationGuesser.ts
@@ -192,10 +192,7 @@ export function guessIndentation(source: ITextBuffer, defaultTabSize: number, de
 
 	// Guess tabSize only if inserting spaces...
 	if (insertSpaces) {
-		let tabSizeScore = (insertSpaces ? 0 : 0.1 * linesCount);
-
-		// console.log("score threshold: " + tabSizeScore);
-
+		let tabSizeScore = 0;
 		ALLOWED_TAB_SIZE_GUESSES.forEach((possibleTabSize) => {
 			const possibleTabSizeScore = spacesDiffCount[possibleTabSize];
 			if (possibleTabSizeScore > tabSizeScore) {
@@ -204,14 +201,14 @@ export function guessIndentation(source: ITextBuffer, defaultTabSize: number, de
 			}
 		});
 
-		// Let a tabSize of 2 win even if it is not the maximum
-		// (only in case 4 was guessed)
-		if (tabSize === 4 && spacesDiffCount[4] > 0 && spacesDiffCount[2] > 0 && spacesDiffCount[2] >= spacesDiffCount[4] / 2) {
+		// Let a tabSize of 2 win over 4 only if it has at least 2/3 of the occurrences of 4
+		// This helps detect 2-space indentation in cases like YAML files where there might be
+		// some 4-space diffs from deeper nesting, while still preferring 4 when it's clearly predominant
+		if (tabSize === 4 && spacesDiffCount[4] > 0 && spacesDiffCount[2] > 0 && spacesDiffCount[2] >= spacesDiffCount[4] * 2 / 3) {
 			tabSize = 2;
 		}
 	}
 
-
 	// console.log('--------------------------');
 	// console.log('linesIndentedWithTabsCount: ' + linesIndentedWithTabsCount + ', linesIndentedWithSpacesCount: ' + linesIndentedWithSpacesCount);
 	// console.log('spacesDiffCount: ' + spacesDiffCount);
diff --git a/src/vs/editor/test/common/model/textModel.test.ts b/src/vs/editor/test/common/model/textModel.test.ts
index c6c281bfe2b..286389ef0e9 100644
--- a/src/vs/editor/test/common/model/textModel.test.ts
+++ b/src/vs/editor/test/common/model/textModel.test.ts
@@ -708,6 +708,74 @@ suite('Editor Model - TextModel', () => {
 		]);
 	});
 
+	test('issue #65668: YAML file indented with 2 spaces', () => {
+		// Full YAML file from the issue - should detect as 2 spaces
+		assertGuess(true, 2, [
+			'version: 2',
+			'',
+			'jobs:',
+			'  build:',
+			'    docker:',
+			'      - circleci/golang:1.11',
+			'',
+			'  environment:',
+			'    TEST_RESULTS: /tmp/test-results',
+			'',
+			'  steps:',
+			'    - checkout',
+			'    - run: mkdir -p $TEST_RESULTS',
+			'',
+			'    - restore_cache:',
+			'        keys:',
+			'          - v1-pkg-cache',
+			'',
+			'    - run:',
+			'        name: dep ensure',
+			'        command: dep ensure -v',
+			'',
+			'    - run:',
+			'        name: Run unit tests',
+			'        command: |',
+			'          trap "go-junit-report <${TEST_RESULTS}/go-test.out > ${TEST_RESULTS}/go-test-report.xml" EXIT',
+			'          go test -v ./... | tee ${TEST_RESULTS}/go-test.out',
+			'',
+			'    - run:',
+			'        name: Build',
+			'        command: go build -v',
+			'',
+			'    - save_cache:',
+			'        key: v1-pkg-cache',
+			'        paths:',
+			'          - "/go/pkg"',
+			'',
+			'    - store_artifacts:',
+			'        path: /tmp/test-results',
+			'        destination: raw-test-output',
+			'',
+			'    - store_test_results:',
+			'        path: /tmp/test-results',
+		]);
+	});
+
+	test('issue #249040: 4-space indent should win over 2-space when predominant', () => {
+		// File with mostly 4-space indents but some 2-space indents should detect as 4 spaces
+		assertGuess(true, 4, [
+			'function foo() {',
+			'    let a = 1;',
+			'    let b = 2;',
+			'    if (true) {',
+			'        console.log(a);',
+			'        console.log(b);',
+			'    }',
+			'    const obj = {',
+			'      x: 1,',  // 2-space indent here
+			'      y: 2',   // 2-space indent here
+			'    };',
+			'    return obj;',
+			'}',
+		]);
+	});
+
 	test('validatePosition', () => {
 
 		const m = createTextModel('line one\nline two');