diff --git a/editor/src/messages/tool/transform_layer/transform_layer_message_handler.rs b/editor/src/messages/tool/transform_layer/transform_layer_message_handler.rs
index d489c95377..7d6d1e52a8 100644
--- a/editor/src/messages/tool/transform_layer/transform_layer_message_handler.rs
+++ b/editor/src/messages/tool/transform_layer/transform_layer_message_handler.rs
@@ -234,7 +234,6 @@ impl MessageHandler<TransformLayerMessage, TransformLayerMessageContext<'_>> for
 					TransformOperation::Grabbing(translation) => {
 						let translation_viewport = self.state.local_to_viewport_transform().matrix2 * translation.to_dvec(&self.state, document);
 						let pivot = document_to_viewport.transform_point2(self.grab_target);
-						let quad = Quad::from_box([pivot, pivot + translation_viewport]);
 
 						responses.add(SelectToolMessage::PivotShift {
 							offset: Some(translation_viewport),
@@ -242,7 +241,27 @@ impl MessageHandler<TransformLayerMessage, TransformLayerMessageContext<'_>> for
 						});
 
 						let typed_string = (!self.typing.digits.is_empty() && self.transform_operation.can_begin_typing()).then(|| self.typing.string.clone());
-						overlay_context.translation_box(translation_viewport / document_to_viewport.matrix2.y_axis.length(), quad, typed_string);
+
+						// When constrained to a single axis in local space, the translation vector is tilted along the layer's
+						// local axis. Draw one dashed line (with a single measurement label) along that axis, instead of the
+						// axis-aligned box, which would incorrectly show both the X and Y screen-space components.
+						if self.state.is_transforming_in_local_space && axis_constraint != Axis::Both {
+							let end_point = pivot + translation_viewport;
+							overlay_context.dashed_line(pivot, end_point, None, None, Some(2.), Some(2.), Some(0.5));
+
+							let axis_direction = self.state.constraint_axis(axis_constraint).unwrap_or(DVec2::X).normalize_or(DVec2::X);
+							let length = translation_viewport.dot(axis_direction) / document_to_viewport.matrix2.y_axis.length();
+							let label = match typed_string {
+								Some(typed_string) => typed_string,
+								None => format!("{length:.2}").trim_end_matches('0').trim_end_matches('.').to_string(),
+							};
+							let text_position = pivot.midpoint(end_point) + translation_viewport.perp().normalize_or(DVec2::X) * 24.;
+							let transform = DAffine2::from_translation(text_position);
+							overlay_context.text(&label, COLOR_OVERLAY_BLUE, None, transform, 16., [Pivot::Middle, Pivot::Middle]);
+						} else {
+							let quad = Quad::from_box([pivot, pivot + translation_viewport]);
+							overlay_context.translation_box(translation_viewport / document_to_viewport.matrix2.y_axis.length(), quad, typed_string);
+						}
 					}
 					TransformOperation::Scaling(scale) => {
 						let scale = scale.to_f64(self.state.is_rounded_to_intervals);