diff --git a/changelog/@unreleased/pr-728.v2.yml b/changelog/@unreleased/pr-728.v2.yml
new file mode 100644
index 000000000..ac748641f
--- /dev/null
+++ b/changelog/@unreleased/pr-728.v2.yml
@@ -0,0 +1,5 @@
+type: improvement
+improvement:
+  description: Fix lambda compactness regression
+  links:
+  - https://github.com/palantir/palantir-java-format/pull/728
diff --git a/palantir-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java b/palantir-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java
index 8a6cdcd78..5f48f7fc5 100644
--- a/palantir-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java
+++ b/palantir-java-format/src/main/java/com/palantir/javaformat/java/JavaInputAstVisitor.java
@@ -35,7 +35,6 @@
 import static com.sun.source.tree.Tree.Kind.BLOCK;
 import static com.sun.source.tree.Tree.Kind.EXTENDS_WILDCARD;
 import static com.sun.source.tree.Tree.Kind.IF;
-import static com.sun.source.tree.Tree.Kind.LAMBDA_EXPRESSION;
 import static com.sun.source.tree.Tree.Kind.METHOD_INVOCATION;
 import static com.sun.source.tree.Tree.Kind.NEW_ARRAY;
 import static com.sun.source.tree.Tree.Kind.NEW_CLASS;
@@ -107,7 +106,6 @@
 import com.sun.source.tree.IntersectionTypeTree;
 import com.sun.source.tree.LabeledStatementTree;
 import com.sun.source.tree.LambdaExpressionTree;
-import com.sun.source.tree.LambdaExpressionTree.BodyKind;
 import com.sun.source.tree.LiteralTree;
 import com.sun.source.tree.MemberReferenceTree;
 import com.sun.source.tree.MemberSelectTree;
@@ -2785,13 +2783,7 @@ private void visitRegularDot(List<ExpressionTree> items, boolean needDot) {
         int length = needDot0 ? minLength : 0;
         for (ExpressionTree e : items) {
             if (needDot) {
-                // Also break if invoked with a multi-statement lambda -- palantir-break-lambda-arg
-                // foo
-                //     .doSomething(() -> {
-                //         bar();
-                //      })
-                //     .doSomethingElse();
-                if (length > minLength || methodHasMultiStatementLambdaArg(e)) {
+                if (length > minLength) {
                     builder.breakOp(Break.builder()
                             .fillMode(FillMode.UNIFIED)
                             .flat("")
@@ -2816,17 +2808,6 @@ private void visitRegularDot(List<ExpressionTree> items, boolean needDot) {
         }
     }
 
-    private boolean methodHasMultiStatementLambdaArg(ExpressionTree e) {
-        if (!e.getKind().equals(METHOD_INVOCATION)) {
-            return false;
-        }
-        return ((MethodInvocationTree) e)
-                .getArguments().stream()
-                        .filter(argExpr -> argExpr.getKind().equals(LAMBDA_EXPRESSION))
-                        .map(argExpr -> (LambdaExpressionTree) argExpr)
-                        .anyMatch(lambda -> lambda.getBodyKind().equals(BodyKind.STATEMENT));
-    }
-
     // avoid formattings like:
     //
     // when(
diff --git a/palantir-java-format/src/test/resources/com/palantir/javaformat/java/testdata/palantir-break-lambda-arg.output b/palantir-java-format/src/test/resources/com/palantir/javaformat/java/testdata/palantir-break-lambda-arg.output
index 20c6bc7be..d4df67643 100644
--- a/palantir-java-format/src/test/resources/com/palantir/javaformat/java/testdata/palantir-break-lambda-arg.output
+++ b/palantir-java-format/src/test/resources/com/palantir/javaformat/java/testdata/palantir-break-lambda-arg.output
@@ -1,7 +1,6 @@
 class PalantirLambdaBreakChain {
     void foo() {
-        return hello
-                .read(txn -> {
+        return hello.read(txn -> {
                     doSomeWork();
                     doSomeMoreWork();
                 })