diff --git a/CHANGES.md b/CHANGES.md
index c1b8cb413..6cedd13a7 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -2,7 +2,10 @@
 
 ## Fixes
 
+- Respect codeActionLiteralSupport capability (#1046)
+
 - Fix a document syncing issue when utf-16 is the position encoding (#1004)
+
 - Disable "Type-annotate" action for code that is already annotated.
   ([#1037](https://github.com/ocaml/ocaml-lsp/pull/1037)), fixes
   [#1036](https://github.com/ocaml/ocaml-lsp/issues/1036)
diff --git a/ocaml-lsp-server/src/ocaml_lsp_server.ml b/ocaml-lsp-server/src/ocaml_lsp_server.ml
index 2e6fe4b5d..9e65259ef 100644
--- a/ocaml-lsp-server/src/ocaml_lsp_server.ml
+++ b/ocaml-lsp-server/src/ocaml_lsp_server.ml
@@ -30,21 +30,24 @@ let view_metrics server =
 let initialize_info (client_capabilities : ClientCapabilities.t) :
     InitializeResult.t =
   let codeActionProvider =
-    let codeActionKinds =
-      Action_inferred_intf.kind :: Action_destruct.kind
-      :: List.map
-           ~f:(fun (c : Code_action.t) -> c.kind)
-           [ Action_type_annotate.t
-           ; Action_remove_type_annotation.t
-           ; Action_construct.t
-           ; Action_refactor_open.unqualify
-           ; Action_refactor_open.qualify
-           ; Action_add_rec.t
-           ; Action_inline.t
-           ]
-      |> List.sort_uniq ~compare:Poly.compare
-    in
-    `CodeActionOptions (CodeActionOptions.create ~codeActionKinds ())
+    match client_capabilities.textDocument with
+    | Some { codeAction = Some { codeActionLiteralSupport = Some _; _ }; _ } ->
+      let codeActionKinds =
+        Action_inferred_intf.kind :: Action_destruct.kind
+        :: List.map
+             ~f:(fun (c : Code_action.t) -> c.kind)
+             [ Action_type_annotate.t
+             ; Action_remove_type_annotation.t
+             ; Action_construct.t
+             ; Action_refactor_open.unqualify
+             ; Action_refactor_open.qualify
+             ; Action_add_rec.t
+             ; Action_inline.t
+             ]
+        |> List.sort_uniq ~compare:Poly.compare
+      in
+      `CodeActionOptions (CodeActionOptions.create ~codeActionKinds ())
+    | _ -> `Bool true
   in
   let textDocumentSync =
     `TextDocumentSyncOptions
diff --git a/ocaml-lsp-server/test/e2e-new/start_stop.ml b/ocaml-lsp-server/test/e2e-new/start_stop.ml
index 005c7f9fc..03f6fb237 100644
--- a/ocaml-lsp-server/test/e2e-new/start_stop.ml
+++ b/ocaml-lsp-server/test/e2e-new/start_stop.ml
@@ -16,7 +16,20 @@ let%expect_test "start/stop" =
           in
           WindowClientCapabilities.create ~showDocument ()
         in
-        ClientCapabilities.create ~window ()
+        let textDocument =
+          let codeAction =
+            let codeActionLiteralSupport =
+              let codeActionKind =
+                CodeActionClientCapabilities.create_codeActionKind ~valueSet:[]
+              in
+              CodeActionClientCapabilities.create_codeActionLiteralSupport
+                ~codeActionKind
+            in
+            CodeActionClientCapabilities.create ~codeActionLiteralSupport ()
+          in
+          TextDocumentClientCapabilities.create ~codeAction ()
+        in
+        ClientCapabilities.create ~window ~textDocument ()
       in
       Client.start client (InitializeParams.create ~capabilities ())
     in