diff --git a/change/@fluentui-react-link-70273175-18df-48c3-b42f-26b8aaf364f0.json b/change/@fluentui-react-link-70273175-18df-48c3-b42f-26b8aaf364f0.json
new file mode 100644
index 0000000000000..6c0c2aa59799f
--- /dev/null
+++ b/change/@fluentui-react-link-70273175-18df-48c3-b42f-26b8aaf364f0.json
@@ -0,0 +1,7 @@
+{
+  "type": "patch",
+  "comment": "fix: move inline styling and context resolution out of the base hook",
+  "packageName": "@fluentui/react-link",
+  "email": "vgenaev@gmail.com",
+  "dependentChangeType": "patch"
+}
diff --git a/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDefault.stories.tsx b/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDefault.stories.tsx
index f69452e2b9203..b2ece5504e3e8 100644
--- a/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDefault.stories.tsx
+++ b/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDefault.stories.tsx
@@ -10,11 +10,11 @@ export const Default = (): React.ReactNode => (
 
     <p className={styles.paragraph}>
       By continuing you agree to our{' '}
-      <Link href="#" inline className={`${styles.link} ${styles.inline}`}>
+      <Link href="#" className={`${styles.link} ${styles.inline}`}>
         Terms of Service
       </Link>{' '}
       and{' '}
-      <Link href="#" inline className={`${styles.link} ${styles.inline}`}>
+      <Link href="#" className={`${styles.link} ${styles.inline}`}>
         Privacy Policy
       </Link>
       .
diff --git a/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDescription.md b/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDescription.md
index a7cdacb18259f..ea6918bf61c44 100644
--- a/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDescription.md
+++ b/packages/react-components/react-headless-components-preview/stories/src/Link/LinkDescription.md
@@ -1,3 +1,3 @@
 A link navigates the user to another page, section, or resource.
 
-Use Link for navigation actions and Button for in-page operations. Links support an `inline` prop that renders them within a text flow, and a `disabled` prop that prevents navigation while preserving accessibility.
+Use Link for navigation actions and Button for in-page operations. Links support a `disabled` prop that prevents navigation while preserving accessibility.
diff --git a/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarDefault.stories.tsx b/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarDefault.stories.tsx
index 117f14f4502b6..b5d30292b705f 100644
--- a/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarDefault.stories.tsx
+++ b/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarDefault.stories.tsx
@@ -18,7 +18,7 @@ export const Default = (): React.ReactNode => (
     <MessageBarBody className={styles.body}>
       <MessageBarTitle className={styles.title}>Descriptive title</MessageBarTitle>
       Message providing information to the user with actionable insights.{' '}
-      <Link className={`${linkStyles.link} ${linkStyles.inline}`} href="#" inline>
+      <Link className={`${linkStyles.link} ${linkStyles.inline}`} href="#">
         Learn more
       </Link>
     </MessageBarBody>
diff --git a/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarIntent.stories.tsx b/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarIntent.stories.tsx
index c998815da7a51..b9db05963aa38 100644
--- a/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarIntent.stories.tsx
+++ b/packages/react-components/react-headless-components-preview/stories/src/MessageBar/MessageBarIntent.stories.tsx
@@ -44,7 +44,7 @@ export const Intent = (): React.ReactNode => (
         <MessageBarBody className={styles.body}>
           <MessageBarTitle className={styles.title}>{item.title}</MessageBarTitle>
           Message providing information to the user with actionable insights.{' '}
-          <Link className={`${linkStyles.link} ${linkStyles.inline}`} href="#" inline>
+          <Link className={`${linkStyles.link} ${linkStyles.inline}`} href="#">
             Learn more
           </Link>
         </MessageBarBody>
diff --git a/packages/react-components/react-link/library/etc/react-link.api.md b/packages/react-components/react-link/library/etc/react-link.api.md
index 8bb58f3bd9285..e5f9003a00934 100644
--- a/packages/react-components/react-link/library/etc/react-link.api.md
+++ b/packages/react-components/react-link/library/etc/react-link.api.md
@@ -18,10 +18,10 @@ import type { SlotClassNames } from '@fluentui/react-utilities';
 export const Link: ForwardRefComponent<LinkProps>;
 
 // @public
-export type LinkBaseProps = DistributiveOmit<LinkProps, 'appearance'>;
+export type LinkBaseProps = DistributiveOmit<LinkProps, 'appearance' | 'inline'>;
 
 // @public
-export type LinkBaseState = DistributiveOmit<LinkState, 'appearance' | 'backgroundAppearance'>;
+export type LinkBaseState = DistributiveOmit<LinkState, 'appearance' | 'backgroundAppearance' | 'inline'>;
 
 // @public (undocumented)
 export const linkClassNames: SlotClassNames<LinkSlots>;
diff --git a/packages/react-components/react-link/library/src/components/Link/Link.types.ts b/packages/react-components/react-link/library/src/components/Link/Link.types.ts
index 915a86c312535..fc75eb723ccb0 100644
--- a/packages/react-components/react-link/library/src/components/Link/Link.types.ts
+++ b/packages/react-components/react-link/library/src/components/Link/Link.types.ts
@@ -37,10 +37,10 @@ export type LinkProps = ComponentProps<LinkSlots> & {
 };
 
 /**
- * Link props without design-specific props (appearance).
+ * Link props without design-specific props (appearance, inline).
  * Use this when building a base link that is unstyled or uses a custom design system.
  */
-export type LinkBaseProps = DistributiveOmit<LinkProps, 'appearance'>;
+export type LinkBaseProps = DistributiveOmit<LinkProps, 'appearance' | 'inline'>;
 
 export type LinkState = ComponentState<LinkSlots> &
   Required<Pick<LinkProps, 'appearance' | 'disabled' | 'disabledFocusable' | 'inline'>> & {
@@ -48,6 +48,6 @@ export type LinkState = ComponentState<LinkSlots> &
   };
 
 /**
- * Link state without design-specific state (appearance, backgroundAppearance).
+ * Link state without design-specific state (appearance, backgroundAppearance, inline).
  */
-export type LinkBaseState = DistributiveOmit<LinkState, 'appearance' | 'backgroundAppearance'>;
+export type LinkBaseState = DistributiveOmit<LinkState, 'appearance' | 'backgroundAppearance' | 'inline'>;
diff --git a/packages/react-components/react-link/library/src/components/Link/useLink.test.tsx b/packages/react-components/react-link/library/src/components/Link/useLink.test.tsx
new file mode 100644
index 0000000000000..6e9fea6cc1640
--- /dev/null
+++ b/packages/react-components/react-link/library/src/components/Link/useLink.test.tsx
@@ -0,0 +1,49 @@
+import * as React from 'react';
+import { renderHook } from '@testing-library/react-hooks';
+
+import { LinkContextProvider } from '../../contexts/linkContext';
+import type { LinkBaseState } from './Link.types';
+import { useLink_unstable, useLinkBase_unstable } from './useLink';
+
+const useLinkBaseTypeTests = () => {
+  // @ts-expect-error - inline is a styled Link prop, not a LinkBase prop
+  useLinkBase_unstable({ inline: true }, null);
+
+  const state: LinkBaseState = useLinkBase_unstable({}, null);
+  // @ts-expect-error - inline is not exposed by LinkBaseState
+  state.inline;
+};
+
+useLinkBaseTypeTests;
+
+describe('useLink_unstable', () => {
+  it('defaults inline to false', () => {
+    const { result } = renderHook(() => useLink_unstable({}, null));
+
+    expect(result.current.inline).toBe(false);
+  });
+
+  it('sets inline from props', () => {
+    const { result } = renderHook(() => useLink_unstable({ inline: true }, null));
+
+    expect(result.current.inline).toBe(true);
+  });
+
+  it('sets inline from context when the prop is absent', () => {
+    const wrapper = ({ children }: { children?: React.ReactNode }) => (
+      <LinkContextProvider value={{ inline: true }}>{children}</LinkContextProvider>
+    );
+    const { result } = renderHook(() => useLink_unstable({}, null), { wrapper });
+
+    expect(result.current.inline).toBe(true);
+  });
+
+  it('prefers an explicit inline prop over context', () => {
+    const wrapper = ({ children }: { children?: React.ReactNode }) => (
+      <LinkContextProvider value={{ inline: true }}>{children}</LinkContextProvider>
+    );
+    const { result } = renderHook(() => useLink_unstable({ inline: false }, null), { wrapper });
+
+    expect(result.current.inline).toBe(false);
+  });
+});
diff --git a/packages/react-components/react-link/library/src/components/Link/useLink.ts b/packages/react-components/react-link/library/src/components/Link/useLink.ts
index 03c5e2b72264d..aa96de0ec1b3e 100644
--- a/packages/react-components/react-link/library/src/components/Link/useLink.ts
+++ b/packages/react-components/react-link/library/src/components/Link/useLink.ts
@@ -17,20 +17,22 @@ export const useLink_unstable = (
   ref: React.Ref<HTMLAnchorElement | HTMLButtonElement | HTMLSpanElement>,
 ): LinkState => {
   const backgroundAppearance = useBackgroundAppearance();
-  const { appearance = 'default', ...baseProps } = props;
+  const { inline: inlineContext } = useLinkContext();
+  const { appearance = 'default', inline: inlineProp, ...baseProps } = props;
 
   const state = useLinkBase_unstable(baseProps, ref);
 
   return {
     appearance,
     backgroundAppearance,
+    inline: inlineProp ?? !!inlineContext,
     ...state,
   };
 };
 
 /**
  * Base hook for Link component, which manages state related to ARIA, keyboard handling,
- * disabled behavior, and slot structure. This hook excludes design-specific props (appearance).
+ * disabled behavior, and slot structure. This hook excludes design-specific props (appearance, inline).
  *
  * @param props - User provided props to the Link component.
  * @param ref - User provided ref to be passed to the Link component.
@@ -39,8 +41,7 @@ export const useLinkBase_unstable = (
   props: LinkBaseProps,
   ref: React.Ref<HTMLAnchorElement | HTMLButtonElement | HTMLSpanElement>,
 ): LinkBaseState => {
-  const { inline: inlineContext } = useLinkContext();
-  const { disabled = false, disabledFocusable = false, inline = false } = props;
+  const { disabled = false, disabledFocusable = false } = props;
 
   const elementType = props.as || (props.href ? 'a' : 'button');
 
@@ -56,7 +57,6 @@ export const useLinkBase_unstable = (
     // Props passed at the top-level
     disabled,
     disabledFocusable,
-    inline: inline ?? !!inlineContext,
 
     // Slots definition
     components: {