diff --git a/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit1.yaml b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit1.yaml
new file mode 100644
index 000000000000..c38ace21d31e
--- /dev/null
+++ b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit1.yaml
@@ -0,0 +1,21 @@
+<fold text='---'>---
+<fold text='v…: <2 items>'>veryLongKeyName:
+  - one
+  - two</fold>
+
+key: <fold text='v…'>|
+  very
+  very
+  very
+  long
+  value
+</fold></fold>
+<fold text='---'>---
+- <fold text='j…'>|
+  just
+  long
+  scalar
+  value
+  without
+  key</fold>
+...</fold>
diff --git a/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit2.yaml b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit2.yaml
new file mode 100644
index 000000000000..42f97b29f688
--- /dev/null
+++ b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit2.yaml
@@ -0,0 +1,21 @@
+<fold text='---'>---
+<fold text='ve…: <2 items>'>veryLongKeyName:
+  - one
+  - two</fold>
+
+key: <fold text='ve…'>|
+  very
+  very
+  very
+  long
+  value
+</fold></fold>
+<fold text='---'>---
+- <fold text='ju…'>|
+  just
+  long
+  scalar
+  value
+  without
+  key</fold>
+...</fold>
diff --git a/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit8.yaml b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit8.yaml
new file mode 100644
index 000000000000..49ee869d0a53
--- /dev/null
+++ b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/abbreviationLimit8.yaml
@@ -0,0 +1,23 @@
+<fold text='---'>---
+<fold text='ver…Name: <2 items>'>veryLongKeyName:
+  - one
+  - two</fold>
+
+key: <fold text='ver…lue
+'>|
+  very
+  very
+  very
+  long
+  value
+</fold></fold>
+<fold text='---'>---
+- <fold text='jus…
+key'>|
+  just
+  long
+  scalar
+  value
+  without
+  key</fold>
+...</fold>
diff --git a/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/noAbbreviation.yaml b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/noAbbreviation.yaml
new file mode 100644
index 000000000000..c011e88957ae
--- /dev/null
+++ b/plugins/yaml/backend/testData/org/jetbrains/yaml/folding/data/noAbbreviation.yaml
@@ -0,0 +1,31 @@
+<fold text='---'>---
+<fold text='veryLongKeyName: <2 items>'>veryLongKeyName:
+  - one
+  - two</fold>
+
+key: <fold text='very
+very
+very
+long
+value
+'>|
+  very
+  very
+  very
+  long
+  value
+</fold></fold>
+<fold text='---'>---
+- <fold text='just
+long
+scalar
+value
+without
+key'>|
+  just
+  long
+  scalar
+  value
+  without
+  key</fold>
+...</fold>
diff --git a/plugins/yaml/backend/testSrc/folding/YAMLFoldingTest.java b/plugins/yaml/backend/testSrc/folding/YAMLFoldingTest.java
index 9d51453c0958..1cbe58b3f059 100644
--- a/plugins/yaml/backend/testSrc/folding/YAMLFoldingTest.java
+++ b/plugins/yaml/backend/testSrc/folding/YAMLFoldingTest.java
@@ -10,27 +10,57 @@ public class YAMLFoldingTest extends BasePlatformTestCase {
   public static final String TEST_DATA_PATH = PathManagerEx.getCommunityHomePath() + RELATIVE_TEST_DATA_PATH;
 
   public void testFolding() {
-    defaultTest();
+    withFoldingSettings()
+      .execute(() -> defaultTest());
   }
 
   public void testSequenceFolding() {
-    defaultTest();
+    withFoldingSettings()
+      .execute(() -> defaultTest());
   }
 
   public void testRuby18677() {
-    defaultTest();
+    withFoldingSettings()
+      .execute(() -> defaultTest());
   }
 
   public void testRuby22423() {
-    defaultTest();
+    withFoldingSettings()
+      .execute(() -> defaultTest());
   }
-  
+
   public void testComments() {
-    defaultTest();
+    withFoldingSettings()
+      .execute(() -> defaultTest());
   }
 
   public void testRegionFolding() {
-    defaultTest();
+    withFoldingSettings()
+      .execute(() -> defaultTest());
+  }
+
+  public void testAbbreviationLimit1() {
+    withFoldingSettings()
+      .withAbbreviationLengthLimit(1)
+      .execute(() -> defaultTest());
+  }
+
+  public void testAbbreviationLimit2() {
+    withFoldingSettings()
+      .withAbbreviationLengthLimit(2)
+      .execute(() -> defaultTest());
+  }
+
+  public void testAbbreviationLimit8() {
+    withFoldingSettings()
+      .withAbbreviationLengthLimit(8)
+      .execute(() -> defaultTest());
+  }
+
+  public void testNoAbbreviation() {
+    withFoldingSettings()
+      .withUseAbbreviation(false)
+      .execute(() -> defaultTest());
   }
 
   public void defaultTest() {
@@ -41,4 +71,43 @@ public class YAMLFoldingTest extends BasePlatformTestCase {
   protected String getTestDataPath() {
     return TEST_DATA_PATH + "/folding/data/";
   }
-} 
\ No newline at end of file
+
+  protected static class YamlFoldingSettingsBuilder {
+    private boolean useAbbreviation = true;
+    private int abbreviationLengthLimit = 20;
+
+    public YamlFoldingSettingsBuilder withUseAbbreviation(boolean value) {
+      this.useAbbreviation = value;
+      return this;
+    }
+
+    public YamlFoldingSettingsBuilder withAbbreviationLengthLimit(int value) {
+      this.abbreviationLengthLimit = value;
+      return this;
+    }
+
+    public void execute(ThrowableRunnable<? extends RuntimeException> runnable) {
+      YAMLFoldingSettings settings = YAMLFoldingSettings.getInstance();
+      boolean originalUseAbbreviation = settings.useAbbreviation;
+      int originalAbbreviationLengthLimit = settings.abbreviationLengthLimit;
+      try {
+        settings.useAbbreviation = useAbbreviation;
+        settings.abbreviationLengthLimit = abbreviationLengthLimit;
+        runnable.run();
+      }
+      finally {
+        settings.useAbbreviation = originalUseAbbreviation;
+        settings.abbreviationLengthLimit = originalAbbreviationLengthLimit;
+      }
+    }
+  }
+
+  protected YamlFoldingSettingsBuilder withFoldingSettings() {
+    return new YamlFoldingSettingsBuilder();
+  }
+
+  @FunctionalInterface
+  public interface ThrowableRunnable<E extends Exception> {
+    void run() throws E;
+  }
+}
diff --git a/plugins/yaml/resources/intellij.yaml.xml b/plugins/yaml/resources/intellij.yaml.xml
index 4e11a09add27..3c242cdc2694 100644
--- a/plugins/yaml/resources/intellij.yaml.xml
+++ b/plugins/yaml/resources/intellij.yaml.xml
@@ -32,6 +32,8 @@
     <renameInputValidator implementation="org.jetbrains.yaml.refactoring.rename.YamlKeyValueRenameInputValidator" order="first"/>
     <applicationService serviceImplementation="org.jetbrains.yaml.smart.YAMLEditorOptions"/>
     <applicationSettings service="org.jetbrains.yaml.smart.YAMLEditorOptions"/>
+    <applicationService serviceImplementation="org.jetbrains.yaml.folding.YAMLFoldingSettings"/>
+    <codeFoldingOptionsProvider instance="org.jetbrains.yaml.folding.YAMLFoldingOptionsProvider"/>
     <rdct.remoteSettingProvider implementation="org.jetbrains.yaml.smart.YAMLRemoteSettingInfoProvider"/>
     <editorSmartKeysConfigurable instance="org.jetbrains.yaml.smart.YAMLSmartOptionsProvider"
                                  id="editor.preferences.yamlOptions"
@@ -39,4 +41,4 @@
                                  key="yaml.smartkeys.option.title"/>
     <copyPastePreProcessor implementation="org.jetbrains.yaml.smart.YAMLCopyPasteProcessor"/>
   </extensions>
-</idea-plugin>  
\ No newline at end of file
+</idea-plugin>  
diff --git a/plugins/yaml/resources/messages/YAMLBundle.properties b/plugins/yaml/resources/messages/YAMLBundle.properties
index 65760eb8d3f6..6aa95d2e45cf 100644
--- a/plugins/yaml/resources/messages/YAMLBundle.properties
+++ b/plugins/yaml/resources/messages/YAMLBundle.properties
@@ -120,4 +120,8 @@ yaml.intention.name.inline.collection=Inline collection
 yaml.intention.name.expand.collection=Expand collection
 yaml.intention.name.expand.all.collections.inside=Expand all collections inside
 yaml.progress.title.inlining.collection=Inlining collection\u2026
-yaml.progress.title.expanding.yaml.collection=Expanding the yaml collection\u2026
\ No newline at end of file
+yaml.progress.title.expanding.yaml.collection=Expanding the yaml collection\u2026
+
+YAMLFoldingSettings.title=YAML
+YAMLFoldingSettings.use.abbreviation=Use abbreviation for folded names and values with limit of
+YAMLFoldingSettings.abbreviation.units.of.measurement={0,choice,1#character|2#characters}
\ No newline at end of file
diff --git a/plugins/yaml/src/folding/YAMLFoldingBuilder.java b/plugins/yaml/src/folding/YAMLFoldingBuilder.java
index 8d9d90449d64..bcde1a15c5fe 100644
--- a/plugins/yaml/src/folding/YAMLFoldingBuilder.java
+++ b/plugins/yaml/src/folding/YAMLFoldingBuilder.java
@@ -18,15 +18,13 @@ import org.jetbrains.annotations.Nullable;
 import org.jetbrains.yaml.YAMLElementTypes;
 import org.jetbrains.yaml.psi.*;
 import org.jetbrains.yaml.psi.impl.YAMLArrayImpl;
-import org.jetbrains.yaml.psi.impl.YAMLBlockMappingImpl;
 import org.jetbrains.yaml.psi.impl.YAMLBlockSequenceImpl;
-import org.jetbrains.yaml.psi.impl.YAMLHashImpl;
 
 import java.util.List;
 
 public class YAMLFoldingBuilder extends CustomFoldingBuilder {
 
-  private static final int PLACEHOLDER_LEN = 20;
+  private static final int LIMIT_FOR_ELLIPSIS_IN_THE_END = 2;
 
   @Override
   protected void buildLanguageFoldRegions(@NotNull List<FoldingDescriptor> descriptors,
@@ -148,14 +146,18 @@ public class YAMLFoldingBuilder extends CustomFoldingBuilder {
     return false;
   }
 
-  private static String normalizePlaceHolderText(@Nullable String text) {
+  protected static String normalizePlaceHolderText(@Nullable String text) {
     if (text == null) {
       return null;
     }
 
-    if (text.length() <= PLACEHOLDER_LEN) {
+    var settings = YAMLFoldingSettings.getInstance();
+    if (!settings.useAbbreviation || text.length() <= settings.abbreviationLengthLimit) {
       return text;
     }
-    return StringUtil.trimMiddle(text, PLACEHOLDER_LEN);
+    if (settings.abbreviationLengthLimit <= LIMIT_FOR_ELLIPSIS_IN_THE_END) {
+      return text.substring(0, settings.abbreviationLengthLimit) + "…";
+    }
+    return StringUtil.trimMiddle(text, settings.abbreviationLengthLimit);
   }
 }
diff --git a/plugins/yaml/src/folding/YAMLFoldingSettings.kt b/plugins/yaml/src/folding/YAMLFoldingSettings.kt
new file mode 100644
index 000000000000..882e77549359
--- /dev/null
+++ b/plugins/yaml/src/folding/YAMLFoldingSettings.kt
@@ -0,0 +1,62 @@
+// Copyright 2000-2025 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
+package org.jetbrains.yaml.folding
+
+import com.intellij.application.options.editor.CodeFoldingOptionsProvider
+import com.intellij.openapi.application.ApplicationManager
+import com.intellij.openapi.components.PersistentStateComponent
+import com.intellij.openapi.components.SettingsCategory
+import com.intellij.openapi.components.State
+import com.intellij.openapi.components.Storage
+import com.intellij.openapi.options.BeanConfigurable
+import com.intellij.ui.dsl.builder.Panel
+import com.intellij.ui.dsl.builder.bindIntText
+import com.intellij.ui.dsl.builder.bindSelected
+import com.intellij.ui.dsl.builder.selected
+import com.intellij.util.xmlb.XmlSerializerUtil
+import org.jetbrains.yaml.YAMLBundle
+
+@State(name = "YAMLFoldingSettings", storages = [Storage("editor.xml")], category = SettingsCategory.CODE)
+class YAMLFoldingSettings : PersistentStateComponent<YAMLFoldingSettings?> {
+  @JvmField
+  var useAbbreviation: Boolean = true
+
+  @JvmField
+  var abbreviationLengthLimit: Int = 20
+
+
+  override fun getState(): YAMLFoldingSettings? {
+    return this
+  }
+
+  override fun loadState(state: YAMLFoldingSettings) {
+    XmlSerializerUtil.copyBean<YAMLFoldingSettings>(state, this)
+  }
+
+  companion object {
+    @JvmStatic
+    fun getInstance(): YAMLFoldingSettings = requireNotNull(ApplicationManager.getApplication().getService(YAMLFoldingSettings::class.java)) {
+      "JsonFoldingSettings service is not available"
+    }
+  }
+}
+
+internal class YAMLFoldingOptionsProvider :
+  BeanConfigurable<YAMLFoldingSettings>(YAMLFoldingSettings.getInstance(), YAMLBundle.message("YAMLFoldingSettings.title")),
+  CodeFoldingOptionsProvider {
+
+  override fun Panel.createContent() {
+    group(YAMLBundle.message("YAMLFoldingSettings.title")) {
+      row {
+        val s = checkBox(YAMLBundle.message("YAMLFoldingSettings.use.abbreviation"))
+          .bindSelected(instance::useAbbreviation)
+
+        intTextField(1..Int.MAX_VALUE)
+          .bindIntText(instance::abbreviationLengthLimit)
+          .enabledIf(s.selected)
+
+        label(YAMLBundle.message("YAMLFoldingSettings.abbreviation.units.of.measurement", instance.abbreviationLengthLimit))
+
+      }
+    }
+  }
+}