diff --git a/packages/flutter/lib/src/material/chip.dart b/packages/flutter/lib/src/material/chip.dart
index 04e0bd7744c..71642ee3ce1 100644
--- a/packages/flutter/lib/src/material/chip.dart
+++ b/packages/flutter/lib/src/material/chip.dart
@@ -2488,7 +2488,7 @@ class _RenderChip extends RenderBox {
 
   @override
   double computeMaxIntrinsicWidth(double height) {
-    final double overallPadding = theme.padding.vertical +
+    final double overallPadding = theme.padding.horizontal +
         theme.labelPadding.horizontal;
     return overallPadding +
         _maxWidth(avatar, height) +
diff --git a/packages/flutter/test/material/chip_test.dart b/packages/flutter/test/material/chip_test.dart
index 9f7cfa340c8..ef47837f1f1 100644
--- a/packages/flutter/test/material/chip_test.dart
+++ b/packages/flutter/test/material/chip_test.dart
@@ -2916,6 +2916,18 @@ void main() {
 
     await tapGesture.up();
   });
+
+  testWidgets('intrinsicHeight implementation meets constraints', (WidgetTester tester) async {
+    // Regression text for https://github.com/flutter/flutter/issues/49478.
+    await tester.pumpWidget(_wrapForChip(
+      child: const Chip(
+        label: Text('text'),
+        padding: EdgeInsets.symmetric(horizontal: 20),
+      ),
+    ));
+
+    expect(tester.takeException(), isNull);
+  });
 }
 
 class _MaterialStateOutlinedBorder extends StadiumBorder implements MaterialStateOutlinedBorder {