diff --git a/src/components/nodes/InlineParameterPanel.tsx b/src/components/nodes/InlineParameterPanel.tsx
new file mode 100644
index 00000000..01e00269
--- /dev/null
+++ b/src/components/nodes/InlineParameterPanel.tsx
@@ -0,0 +1,62 @@
+"use client";
+
+import { ReactNode } from "react";
+
+interface InlineParameterPanelProps {
+  expanded: boolean;
+  onToggle: () => void;
+  children: ReactNode;
+  nodeId: string;
+}
+
+/**
+ * Collapsible parameter container for inline display within generation nodes.
+ * Provides a chevron toggle button and smooth expand/collapse transitions.
+ */
+export function InlineParameterPanel({
+  expanded,
+  onToggle,
+  children,
+  nodeId,
+}: InlineParameterPanelProps) {
+  return (
+    <div className="w-full">
+      {/* Chevron toggle button - acts as visual boundary */}
+      <button
+        type="button"
+        onClick={onToggle}
+        className="nodrag nopan w-full flex items-center justify-center py-1 text-neutral-500 hover:text-neutral-300 transition-colors"
+        aria-label={expanded ? "Collapse parameters" : "Expand parameters"}
+        aria-expanded={expanded}
+        aria-controls={`params-${nodeId}`}
+      >
+        <svg
+          className="w-4 h-4 transition-transform duration-200"
+          style={{ transform: expanded ? "rotate(180deg)" : "rotate(0deg)" }}
+          viewBox="0 0 24 24"
+          fill="none"
+          stroke="currentColor"
+          strokeWidth="2"
+          strokeLinecap="round"
+          strokeLinejoin="round"
+        >
+          <polyline points="6 9 12 15 18 9" />
+        </svg>
+      </button>
+
+      {/* Collapsible content area */}
+      <div
+        id={`params-${nodeId}`}
+        className="overflow-hidden transition-all duration-200"
+        style={{
+          maxHeight: expanded ? "2000px" : "0",
+          opacity: expanded ? 1 : 0,
+        }}
+      >
+        <div className="nodrag nopan nowheel bg-neutral-900/60 px-3 pb-3">
+          <div className="space-y-2">{children}</div>
+        </div>
+      </div>
+    </div>
+  );
+}
diff --git a/src/hooks/useInlineParameters.ts b/src/hooks/useInlineParameters.ts
new file mode 100644
index 00000000..455742d4
--- /dev/null
+++ b/src/hooks/useInlineParameters.ts
@@ -0,0 +1,24 @@
+import { useState, useCallback } from "react";
+
+const INLINE_PARAMS_KEY = "node-banana-inline-parameters";
+
+export function useInlineParameters() {
+  const [enabled, setEnabled] = useState(() => {
+    try {
+      return localStorage.getItem(INLINE_PARAMS_KEY) === "true";
+    } catch {
+      return false;
+    }
+  });
+
+  const setInlineParameters = useCallback((value: boolean) => {
+    try {
+      localStorage.setItem(INLINE_PARAMS_KEY, String(value));
+    } catch {
+      // localStorage not available
+    }
+    setEnabled(value);
+  }, []);
+
+  return { inlineParametersEnabled: enabled, setInlineParameters };
+}
diff --git a/src/types/nodes.ts b/src/types/nodes.ts
index 65725dbd..963c41f7 100644
--- a/src/types/nodes.ts
+++ b/src/types/nodes.ts
@@ -177,6 +177,7 @@ export interface NanoBananaNodeData extends BaseNodeData {
   useImageSearch: boolean; // Only available for Nano Banana 2
   parameters?: Record<string, unknown>; // Model-specific parameters for external providers
   inputSchema?: ModelInputDef[]; // Model's input schema for dynamic handles
+  parametersExpanded?: boolean; // Collapse state for inline parameter display
   status: NodeStatus;
   error: string | null;
   imageHistory: CarouselImageItem[]; // Carousel history (IDs only)
@@ -195,6 +196,7 @@ export interface GenerateVideoNodeData extends BaseNodeData {
   selectedModel?: SelectedModel; // Required for video generation (no legacy fallback)
   parameters?: Record<string, unknown>; // Model-specific parameters
   inputSchema?: ModelInputDef[]; // Model's input schema for dynamic handles
+  parametersExpanded?: boolean; // Collapse state for inline parameter display
   status: NodeStatus;
   error: string | null;
   videoHistory: CarouselVideoItem[]; // Carousel history (IDs only)
@@ -214,6 +216,7 @@ export interface Generate3DNodeData extends BaseNodeData {
   selectedModel?: SelectedModel;
   parameters?: Record<string, unknown>;
   inputSchema?: ModelInputDef[];
+  parametersExpanded?: boolean; // Collapse state for inline parameter display
   status: NodeStatus;
   error: string | null;
 }
@@ -238,6 +241,7 @@ export interface GenerateAudioNodeData extends BaseNodeData {
   selectedModel?: SelectedModel; // Required for audio generation
   parameters?: Record<string, unknown>; // Model-specific parameters (voice, speed, etc.)
   inputSchema?: ModelInputDef[]; // Model's input schema for dynamic handles
+  parametersExpanded?: boolean; // Collapse state for inline parameter display
   status: NodeStatus;
   error: string | null;
   audioHistory: CarouselAudioItem[]; // Carousel history (IDs only)
@@ -258,6 +262,7 @@ export interface LLMGenerateNodeData extends BaseNodeData {
   model: LLMModelType;
   temperature: number;
   maxTokens: number;
+  parametersExpanded?: boolean; // Collapse state for inline parameter display
   status: NodeStatus;
   error: string | null;
 }