diff --git a/crates/text/src/layout.rs b/crates/text/src/layout.rs
index 05cc4beb..94a0b5f2 100644
--- a/crates/text/src/layout.rs
+++ b/crates/text/src/layout.rs
@@ -93,12 +93,24 @@ impl BoxGeom {
         } else {
             text_rect
         };
-        let inner = Rect::new(
-            r.x0 + bp.inset_l.unwrap_or(7.2),
-            r.y0 + bp.inset_t.unwrap_or(3.6),
-            (r.x1 - bp.inset_r.unwrap_or(7.2)).max(r.x0 + bp.inset_l.unwrap_or(7.2)),
-            (r.y1 - bp.inset_b.unwrap_or(3.6)).max(r.y0 + bp.inset_t.unwrap_or(3.6)),
-        );
+        // Insets wider than the shape scale down proportionally to fit inside it (#1632).
+        let (mut ins_l, mut ins_r) = (bp.inset_l.unwrap_or(7.2).max(0.0), bp.inset_r.unwrap_or(7.2).max(0.0));
+        let (mut ins_t, mut ins_b) = (bp.inset_t.unwrap_or(3.6).max(0.0), bp.inset_b.unwrap_or(3.6).max(0.0));
+        let w = r.width().max(0.0);
+        let total_x = ins_l + ins_r;
+        if total_x > w && total_x > 0.0 {
+            let s = w / total_x;
+            ins_l *= s;
+            ins_r *= s;
+        }
+        let h = r.height().max(0.0);
+        let total_y = ins_t + ins_b;
+        if total_y > h && total_y > 0.0 {
+            let s = h / total_y;
+            ins_t *= s;
+            ins_b *= s;
+        }
+        let inner = Rect::new(r.x0 + ins_l, r.y0 + ins_t, (r.x1 - ins_r).max(r.x0 + ins_l), (r.y1 - ins_b).max(r.y0 + ins_t));
         // Text that follows a WordArt arch or circle is set on one line per paragraph.
         let follow = bp.warp.as_deref().is_some_and(deckcraft_geom::warp::is_follow);
         let wrap = bp.wrap.unwrap_or(true) && !follow && !matches!(bp.autofit, Some(AutoFit::Shape) if shape.text_box && !bp.wrap.unwrap_or(true));
diff --git a/crates/text/src/tests.rs b/crates/text/src/tests.rs
index f9f3f310..a5d3b324 100644
--- a/crates/text/src/tests.rs
+++ b/crates/text/src/tests.rs
@@ -1928,3 +1928,24 @@ fn a_paragraph_with_its_own_start_at_restarts_the_count_there() {
     // A later paragraph with a new start begins a fresh run.
     check(&[1, 1, 7, 7], &[1, 2, 7, 8]);
 }
+
+/// #1632: when insets are wider than the shape, they scale down proportionally so the text
+/// rectangle stays inside the shape bounds and unwrapped text does not project outside it.
+#[test]
+fn insets_wider_than_the_shape_scale_down_within_the_shape_bounds() {
+    let (p, mut sh) = setup("Collaboration Hub", 14.17, 14.17);
+    sh.ph = None;
+    let bp = &mut sh.text.as_mut().unwrap().body;
+    bp.wrap = Some(false);
+    bp.inset_l = Some(127.5);
+    bp.inset_r = Some(11.33);
+    bp.inset_t = Some(11.33);
+    bp.inset_b = Some(11.33);
+    sh.text.as_mut().unwrap().paragraphs[0].props = deckcraft_model::text::ParaProps { align: Some(Align::Center), ..Default::default() };
+    let l = lay(&p, &sh, 14.17, 14.17);
+    assert_eq!(l.lines.len(), 1);
+    let line = &l.lines[0];
+    let mid = (line.caret_x[0] + *line.caret_x.last().unwrap()) / 2.0;
+    // The text center must remain inside the 14.17 pt wide shape, not pushed ~127.5 pt to the right.
+    assert!((0.0..=14.17).contains(&mid), "line center {mid} should be within [0, 14.17]");
+}