diff --git a/crates/hir/src/hir_def/declaration.rs b/crates/hir/src/hir_def/declaration.rs
index 99b832f6..27a6b241 100644
--- a/crates/hir/src/hir_def/declaration.rs
+++ b/crates/hir/src/hir_def/declaration.rs
@@ -112,9 +112,30 @@ pub enum NetStrength {
 #[derive(Debug, PartialEq, Eq, Clone)]
 pub struct ParamDecl {
     pub ty: DataTy,
+    pub kind: ParamDeclKind,
+    pub is_port: bool,
     pub decls: DeclsRange,
 }
 
+#[derive(Debug, PartialEq, Eq, Clone, Copy)]
+pub enum ParamDeclKind {
+    Parameter,
+    LocalParam,
+}
+
+impl ParamDeclKind {
+    pub fn is_overridable(self) -> bool {
+        matches!(self, Self::Parameter)
+    }
+
+    pub fn keyword(self) -> &'static str {
+        match self {
+            Self::Parameter => "parameter",
+            Self::LocalParam => "localparam",
+        }
+    }
+}
+
 #[derive(Debug, PartialEq, Eq, Clone)]
 pub struct GenvarDecl {
     pub ty: DataTy,
@@ -246,12 +267,24 @@ impl LowerDeclarationCtx<'_> {
     pub(crate) fn lower_param_decl_base(
         &mut self,
         param_decl: ast::ParameterDeclarationBase,
+    ) -> DeclarationId {
+        self.lower_param_decl_base_with_context(param_decl, None, false, false)
+    }
+
+    pub(crate) fn lower_param_decl_base_with_context(
+        &mut self,
+        param_decl: ast::ParameterDeclarationBase,
+        inherited_kind: Option<ParamDeclKind>,
+        force_local: bool,
+        is_port: bool,
     ) -> DeclarationId {
         use ast::ParameterDeclarationBase::*;
         match param_decl {
-            ParameterDeclaration(param_decl) => self.lower_param_decl(param_decl),
+            ParameterDeclaration(param_decl) => {
+                self.lower_param_decl(param_decl, inherited_kind, force_local, is_port)
+            }
             TypeParameterDeclaration(type_param_decl) => {
-                self.lower_type_param_decl(type_param_decl)
+                self.lower_type_param_decl(type_param_decl, inherited_kind, force_local, is_port)
             }
         }
     }
@@ -259,7 +292,15 @@ impl LowerDeclarationCtx<'_> {
     fn lower_type_param_decl(
         &mut self,
         type_param_decl: ast::TypeParameterDeclaration,
+        inherited_kind: Option<ParamDeclKind>,
+        force_local: bool,
+        is_port: bool,
     ) -> DeclarationId {
+        let kind = lower_param_decl_kind(
+            type_param_decl.keyword().map(|keyword| keyword.kind()),
+            inherited_kind,
+            force_local,
+        );
         let start = self.decls.nxt_idx();
         let ty = DataTy::Builtin(
             self.db.intern_ty(crate::hir_def::expr::data_ty::BuiltinDataTy::default()),
@@ -267,19 +308,30 @@ impl LowerDeclarationCtx<'_> {
         let decls = DeclsRange::new(start..self.decls.nxt_idx());
 
         alloc_idx_and_src! {
-            ParamDecl { ty, decls } => self.declarations,
+            ParamDecl { ty, kind, is_port, decls } => self.declarations,
             type_param_decl => self.declaration_srcs,
         }
     }
 
-    fn lower_param_decl(&mut self, param_decl: ast::ParameterDeclaration) -> DeclarationId {
+    fn lower_param_decl(
+        &mut self,
+        param_decl: ast::ParameterDeclaration,
+        inherited_kind: Option<ParamDeclKind>,
+        force_local: bool,
+        is_port: bool,
+    ) -> DeclarationId {
+        let kind = lower_param_decl_kind(
+            param_decl.keyword().map(|keyword| keyword.kind()),
+            inherited_kind,
+            force_local,
+        );
         let ty = self.expr_ctx().lower_data_ty(param_decl.type_());
 
         let parent = self.declarations.nxt_idx().into();
         let decls = self.decl_ctx().lower_declarators(param_decl.declarators(), parent);
 
         alloc_idx_and_src! {
-            ParamDecl { ty, decls } => self.declarations,
+            ParamDecl { ty, kind, is_port, decls } => self.declarations,
             param_decl => self.declaration_srcs,
         }
     }
@@ -315,3 +367,19 @@ impl LowerDeclarationCtx<'_> {
         }
     }
 }
+
+fn lower_param_decl_kind(
+    keyword: Option<TokenKind>,
+    inherited_kind: Option<ParamDeclKind>,
+    force_local: bool,
+) -> ParamDeclKind {
+    if force_local {
+        return ParamDeclKind::LocalParam;
+    }
+
+    match keyword {
+        Some(TokenKind::LOCAL_PARAM_KEYWORD) => ParamDeclKind::LocalParam,
+        Some(TokenKind::PARAMETER_KEYWORD) => ParamDeclKind::Parameter,
+        _ => inherited_kind.unwrap_or(ParamDeclKind::Parameter),
+    }
+}
diff --git a/crates/hir/src/hir_def/module.rs b/crates/hir/src/hir_def/module.rs
index c2856f46..96ee362d 100644
--- a/crates/hir/src/hir_def/module.rs
+++ b/crates/hir/src/hir_def/module.rs
@@ -32,7 +32,8 @@ use super::{
     alloc_idx_and_src,
     block::{BlockInfo, BlockSrc, LocalBlockId},
     declaration::{
-        Declaration, DeclarationId, DeclarationSrc, LowerDeclaration, impl_lower_declaration,
+        Declaration, DeclarationId, DeclarationSrc, LowerDeclaration, ParamDeclKind,
+        impl_lower_declaration,
     },
     expr::{
         Expr, ExprSrc, LowerExpr,
@@ -151,6 +152,19 @@ impl Module {
         self.param_ports.clone()?.nth(idx)
     }
 
+    pub fn overridable_param_id_by_idx(&self, idx: usize) -> Option<DeclId> {
+        self.declarations
+            .values()
+            .filter_map(|declaration| match declaration {
+                Declaration::ParamDecl(param_decl) if param_decl.kind.is_overridable() => {
+                    Some(param_decl.decls.clone())
+                }
+                _ => None,
+            })
+            .flatten()
+            .nth(idx)
+    }
+
     pub fn non_ansi_port_id_by_idx(&self, idx: usize) -> Option<NonAnsiPortId> {
         let Ports::NonAnsi { ports, .. } = &self.ports else {
             return None;
@@ -331,9 +345,19 @@ impl LowerModuleCtx<'_> {
 
     pub(crate) fn lower_module_decl(&mut self, decl: ast::ModuleDeclaration) {
         let header = decl.header();
+        let has_param_ports = header.parameters().is_some();
         if let Some(param_ports) = header.parameters() {
+            let mut inherited_kind = ParamDeclKind::Parameter;
             for decls in param_ports.declarations().children() {
-                self.declaration_ctx().lower_param_decl_base(decls);
+                let decl_id = self.declaration_ctx().lower_param_decl_base_with_context(
+                    decls,
+                    Some(inherited_kind),
+                    false,
+                    true,
+                );
+                if let Declaration::ParamDecl(param_decl) = self.module.get(decl_id) {
+                    inherited_kind = param_decl.kind;
+                }
                 self.region_tree.handle_node(decls.syntax());
             }
 
@@ -367,9 +391,15 @@ impl LowerModuleCtx<'_> {
                 }
                 NetDeclaration(net_decl) => self.declaration_ctx().lower_net_decl(net_decl).into(),
                 LocalVariableDeclaration(_) => continue,
-                ParameterDeclarationStatement(param_decl) => {
-                    self.declaration_ctx().lower_param_decl_base(param_decl.parameter()).into()
-                }
+                ParameterDeclarationStatement(param_decl) => self
+                    .declaration_ctx()
+                    .lower_param_decl_base_with_context(
+                        param_decl.parameter(),
+                        None,
+                        has_param_ports,
+                        false,
+                    )
+                    .into(),
                 TypedefDeclaration(typedef_decl) => self.lower_typedef(typedef_decl).into(),
                 GenvarDeclaration(genvar_decl) => {
                     self.declaration_ctx().lower_genvar_decl(genvar_decl).into()
diff --git a/crates/ide/src/code_action.rs b/crates/ide/src/code_action.rs
index 03de8863..4426f9fd 100644
--- a/crates/ide/src/code_action.rs
+++ b/crates/ide/src/code_action.rs
@@ -16,8 +16,8 @@ pub use diagnostics::{
 pub(crate) use edits::{apply_missing_list_edit, line_indent};
 pub(crate) use engine::code_action;
 pub(crate) use module_members::{
-    all_parameter_names, leading_parameter_names, missing_member_entry_text, port_names,
-    remaining_ordered_port_names,
+    all_overridable_parameter_names, leading_overridable_parameter_names,
+    missing_member_entry_text, port_names, remaining_ordered_port_names,
 };
 
 #[cfg(test)]
diff --git a/crates/ide/src/code_action/fixtures/code_actions/missing_parameter_honors_parameter_port_keyword_inheritance.sv b/crates/ide/src/code_action/fixtures/code_actions/missing_parameter_honors_parameter_port_keyword_inheritance.sv
new file mode 100644
index 00000000..8ddd293a
--- /dev/null
+++ b/crates/ide/src/code_action/fixtures/code_actions/missing_parameter_honors_parameter_port_keyword_inheritance.sv
@@ -0,0 +1,3 @@
+//- repair: MissingParameter
+module child #(localparam int L = 1, int H = 2, parameter int A = 3, int B = 4) (); endmodule
+module top; child #(/*caret*/.A(1)) u(); endmodule
diff --git a/crates/ide/src/code_action/fixtures/code_actions/missing_parameter_skips_localparams.sv b/crates/ide/src/code_action/fixtures/code_actions/missing_parameter_skips_localparams.sv
new file mode 100644
index 00000000..ce9c8104
--- /dev/null
+++ b/crates/ide/src/code_action/fixtures/code_actions/missing_parameter_skips_localparams.sv
@@ -0,0 +1,3 @@
+//- repair: MissingParameter
+module child #(parameter A = 1, parameter B = 2) (); localparam L = 3; endmodule
+module top; localparam L = 4; child #(/*caret*/.A(1)) u(); endmodule
diff --git a/crates/ide/src/code_action/handlers/add_missing_parameters.rs b/crates/ide/src/code_action/handlers/add_missing_parameters.rs
index b9f466d7..414cf6a8 100644
--- a/crates/ide/src/code_action/handlers/add_missing_parameters.rs
+++ b/crates/ide/src/code_action/handlers/add_missing_parameters.rs
@@ -12,8 +12,8 @@ use utils::get::{Get, GetRef};
 use crate::{
     code_action::{
         CodeActionCollector, CodeActionCtx, CodeActionId, CodeActionKind, RepairKind,
-        all_parameter_names, apply_missing_list_edit, leading_parameter_names,
-        missing_member_entry_text,
+        all_overridable_parameter_names, apply_missing_list_edit,
+        leading_overridable_parameter_names, missing_member_entry_text,
     },
     module_resolution::resolve_hir_instantiation_target,
 };
@@ -65,7 +65,7 @@ pub(super) fn add_missing_parameters(
         .unwrap_or_default();
 
     let names: Vec<_> = if is_ordered {
-        leading_parameter_names(&target_module)
+        leading_overridable_parameter_names(&target_module)
             .into_iter()
             .skip(instantiation.param_assigns.len())
             .collect()
@@ -81,7 +81,7 @@ pub(super) fn add_missing_parameters(
             }
         }
 
-        all_parameter_names(&target_module)
+        all_overridable_parameter_names(&target_module)
             .into_iter()
             .filter(|name| !assigned_names.contains(name))
             .collect()
diff --git a/crates/ide/src/code_action/handlers/convert_ordered_connections.rs b/crates/ide/src/code_action/handlers/convert_ordered_connections.rs
index 52eb0ae3..c24b1e99 100644
--- a/crates/ide/src/code_action/handlers/convert_ordered_connections.rs
+++ b/crates/ide/src/code_action/handlers/convert_ordered_connections.rs
@@ -14,7 +14,7 @@ use utils::get::{Get, GetRef};
 use crate::{
     code_action::{
         CodeActionCollector, CodeActionCtx, CodeActionId, CodeActionKind, RepairKind,
-        leading_parameter_names, port_names,
+        leading_overridable_parameter_names, port_names,
     },
     module_resolution::resolve_hir_instantiation_target,
 };
@@ -115,7 +115,7 @@ pub(super) fn convert_ordered_params(
     let instantiation = module.get(instantiation_id);
     let target_module_id = resolve_hir_instantiation_target(db, ctx.file_id(), instantiation)?;
     let target_module = db.module(target_module_id);
-    let param_names = leading_parameter_names(&target_module);
+    let param_names = leading_overridable_parameter_names(&target_module);
 
     let replacements = instantiation
         .param_assigns
diff --git a/crates/ide/src/code_action/handlers/sort_named_instantiation_items.rs b/crates/ide/src/code_action/handlers/sort_named_instantiation_items.rs
index 9ee0c222..0e6064ac 100644
--- a/crates/ide/src/code_action/handlers/sort_named_instantiation_items.rs
+++ b/crates/ide/src/code_action/handlers/sort_named_instantiation_items.rs
@@ -20,8 +20,8 @@ use utils::{
 
 use crate::{
     code_action::{
-        CodeActionCollector, CodeActionCtx, CodeActionId, CodeActionKind, all_parameter_names,
-        line_indent, port_names,
+        CodeActionCollector, CodeActionCtx, CodeActionId, CodeActionKind,
+        all_overridable_parameter_names, line_indent, port_names,
     },
     module_resolution::resolve_hir_instantiation_target,
 };
@@ -61,7 +61,7 @@ pub(super) fn sort_named_parameter_assignments(
     let (module, module_src_map) = db.module_with_source_map(module_id);
     let instantiation = module.get(instantiation_id);
     let target_module_id = resolve_hir_instantiation_target(db, ctx.file_id(), instantiation)?;
-    let parameter_order = all_parameter_names(&db.module(target_module_id));
+    let parameter_order = all_overridable_parameter_names(&db.module(target_module_id));
     let parameter_order_map: FxHashMap<_, _> =
         parameter_order.iter().enumerate().map(|(index, name)| (name.as_ref(), index)).collect();
 
diff --git a/crates/ide/src/code_action/module_members.rs b/crates/ide/src/code_action/module_members.rs
index 6e7df959..d1f37c7d 100644
--- a/crates/ide/src/code_action/module_members.rs
+++ b/crates/ide/src/code_action/module_members.rs
@@ -38,21 +38,26 @@ pub(crate) fn remaining_ordered_port_names(module: &Module, connected: usize) ->
     }
 }
 
-pub(crate) fn leading_parameter_names(module: &Module) -> Vec<SmolStr> {
+pub(crate) fn leading_overridable_parameter_names(module: &Module) -> Vec<SmolStr> {
     module
         .declarations
         .values()
         .take_while(|declaration| matches!(declaration, Declaration::ParamDecl(_)))
+        .filter(|declaration| {
+            matches!(declaration, Declaration::ParamDecl(param_decl) if param_decl.kind.is_overridable())
+        })
         .flat_map(|declaration| declaration.decls())
         .filter_map(|decl| module.get(decl).name.clone())
         .collect()
 }
 
-pub(crate) fn all_parameter_names(module: &Module) -> Vec<SmolStr> {
+pub(crate) fn all_overridable_parameter_names(module: &Module) -> Vec<SmolStr> {
     module
         .declarations
         .values()
-        .filter(|declaration| matches!(declaration, Declaration::ParamDecl(_)))
+        .filter(|declaration| {
+            matches!(declaration, Declaration::ParamDecl(param_decl) if param_decl.kind.is_overridable())
+        })
         .flat_map(|declaration| declaration.decls())
         .filter_map(|decl| module.get(decl).name.clone())
         .collect()
diff --git a/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_availability_matrix.snap b/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_availability_matrix.snap
index 09e80a50..72739f27 100644
--- a/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_availability_matrix.snap
+++ b/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_availability_matrix.snap
@@ -17,6 +17,8 @@ reformat_number_literal_requires_enough_digits:
   - Convert literal to hexadecimal
 missing_parameter_repair_is_not_offered_when_nothing_is_missing:
   <none>
+missing_parameter_repair_skips_body_params_when_header_has_parameter_ports:
+  <none>
 named_port_shorthand_collapse_requires_same_name:
   <none>
 named_port_shorthand_requires_all_connections_named:
diff --git a/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_edit_fixtures@missing_parameter_honors_parameter_port_keyword_inheritance.sv.snap b/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_edit_fixtures@missing_parameter_honors_parameter_port_keyword_inheritance.sv.snap
new file mode 100644
index 00000000..fd745ab0
--- /dev/null
+++ b/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_edit_fixtures@missing_parameter_honors_parameter_port_keyword_inheritance.sv.snap
@@ -0,0 +1,7 @@
+---
+source: crates/ide/src/code_action/tests.rs
+expression: fixed
+input_file: crates/ide/src/code_action/fixtures/code_actions/missing_parameter_honors_parameter_port_keyword_inheritance.sv
+---
+module child #(localparam int L = 1, int H = 2, parameter int A = 3, int B = 4) (); endmodule
+module top; child #(.A(1), .B()) u(); endmodule
diff --git a/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_edit_fixtures@missing_parameter_skips_localparams.sv.snap b/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_edit_fixtures@missing_parameter_skips_localparams.sv.snap
new file mode 100644
index 00000000..300c39cb
--- /dev/null
+++ b/crates/ide/src/code_action/snapshots/ide__code_action__tests__code_action_edit_fixtures@missing_parameter_skips_localparams.sv.snap
@@ -0,0 +1,7 @@
+---
+source: crates/ide/src/code_action/tests.rs
+expression: fixed
+input_file: crates/ide/src/code_action/fixtures/code_actions/missing_parameter_skips_localparams.sv
+---
+module child #(parameter A = 1, parameter B = 2) (); localparam L = 3; endmodule
+module top; localparam L = 4; child #(.A(1), .B()) u(); endmodule
diff --git a/crates/ide/src/code_action/tests.rs b/crates/ide/src/code_action/tests.rs
index ae79149a..fa7b9bd8 100644
--- a/crates/ide/src/code_action/tests.rs
+++ b/crates/ide/src/code_action/tests.rs
@@ -416,6 +416,11 @@ fn code_action_availability_matrix() {
             kind: LabelCaseKind::Repair(RepairKind::MissingParameter),
             text: "module child #(parameter A = 1) (); endmodule\nmodule top; child #(/*caret*/.A(1)) u(); endmodule\n",
         },
+        LabelCase {
+            name: "missing_parameter_repair_skips_body_params_when_header_has_parameter_ports",
+            kind: LabelCaseKind::Repair(RepairKind::MissingParameter),
+            text: "module child #(parameter A = 1) (); parameter B = 2; endmodule\nmodule top; child #(/*caret*/.A(1)) u(); endmodule\n",
+        },
         LabelCase {
             name: "named_port_shorthand_collapse_requires_same_name",
             kind: LabelCaseKind::NoDiagnostics,
diff --git a/crates/ide/src/completion/engine/fixtures/filters_body_named_param_names_when_header_has_parameter_ports.v b/crates/ide/src/completion/engine/fixtures/filters_body_named_param_names_when_header_has_parameter_ports.v
new file mode 100644
index 00000000..2b01c777
--- /dev/null
+++ b/crates/ide/src/completion/engine/fixtures/filters_body_named_param_names_when_header_has_parameter_ports.v
@@ -0,0 +1,2 @@
+module child #(parameter A = 1) (); parameter B = 2; endmodule
+module top; child #(./*caret*/) u(); endmodule
diff --git a/crates/ide/src/completion/engine/instantiation.rs b/crates/ide/src/completion/engine/instantiation.rs
index f184ff05..7277151b 100644
--- a/crates/ide/src/completion/engine/instantiation.rs
+++ b/crates/ide/src/completion/engine/instantiation.rs
@@ -2,7 +2,7 @@ use hir::{
     db::HirDb,
     hir_def::{
         Ident,
-        declaration::{Declaration, DeclarationSrc},
+        declaration::Declaration,
         expr::declarator::DeclaratorParent,
         module::{ModuleId, port::Ports},
     },
@@ -11,7 +11,7 @@ use syntax::{
     SyntaxAncestors,
     ast::{self, AstNode},
 };
-use utils::get::{Get, GetRef};
+use utils::get::GetRef;
 
 use crate::db::root_db::RootDb;
 
@@ -59,8 +59,7 @@ pub(super) fn overridable_params_of_module_in_order(
     db: &RootDb,
     module_id: ModuleId,
 ) -> Vec<Ident> {
-    let (module, module_src_map) = db.module_with_source_map(module_id);
-    let tree = db.parse(module_id.file_id);
+    let module = db.module(module_id);
 
     let mut names = Vec::new();
 
@@ -71,22 +70,10 @@ pub(super) fn overridable_params_of_module_in_order(
         let DeclaratorParent::DeclarationId(declaration_id) = decl.parent else {
             continue;
         };
-        let Declaration::ParamDecl(_) = module.get(declaration_id) else {
-            continue;
-        };
-
-        let Some(DeclarationSrc::ParameterDeclaration(ptr)) = module_src_map.get(declaration_id)
-        else {
-            continue;
-        };
-        let Some(ast_decl) = ptr.to_node(&tree).and_then(ast::ParameterDeclaration::cast) else {
-            continue;
-        };
-
-        let Some(keyword) = ast_decl.keyword() else {
+        let Declaration::ParamDecl(param_decl) = module.get(declaration_id) else {
             continue;
         };
-        if keyword.kind() != syntax::Token![parameter] {
+        if !param_decl.kind.is_overridable() {
             continue;
         }
 
diff --git a/crates/ide/src/completion/engine/snapshots/ide__completion__engine__tests__completion_fixtures@filters_body_named_param_names_when_header_has_parameter_ports.v.snap b/crates/ide/src/completion/engine/snapshots/ide__completion__engine__tests__completion_fixtures@filters_body_named_param_names_when_header_has_parameter_ports.v.snap
new file mode 100644
index 00000000..d5df3404
--- /dev/null
+++ b/crates/ide/src/completion/engine/snapshots/ide__completion__engine__tests__completion_fixtures@filters_body_named_param_names_when_header_has_parameter_ports.v.snap
@@ -0,0 +1,23 @@
+---
+source: crates/ide/src/completion/engine/tests.rs
+expression: items
+input_file: crates/ide/src/completion/engine/fixtures/filters_body_named_param_names_when_header_has_parameter_ports.v
+---
+[
+    CompletionItem {
+        label: "A",
+        kind: Text,
+        edit: Some(
+            TextEditItem {
+                ins: "A()",
+                del: 84..84,
+            },
+        ),
+        snippet_edit: Some(
+            TextEditItem {
+                ins: "A(${1:expr})",
+                del: 84..84,
+            },
+        ),
+    },
+]
diff --git a/crates/ide/src/completion/engine/typed_filter.rs b/crates/ide/src/completion/engine/typed_filter.rs
index 7b32e85b..51baee45 100644
--- a/crates/ide/src/completion/engine/typed_filter.rs
+++ b/crates/ide/src/completion/engine/typed_filter.rs
@@ -3,7 +3,7 @@ use hir::{
     db::HirDb,
     hir_def::{
         Ident,
-        declaration::{Declaration, DeclarationId, DeclarationSrc},
+        declaration::Declaration,
         expr::declarator::DeclaratorParent,
         module::{ModuleId, port::Ports},
     },
@@ -13,7 +13,7 @@ use hir::{
         Ty, TyClass, packed_bit_width, type_class, type_of_decl, type_of_path_resolution,
     },
 };
-use utils::get::{Get, GetRef};
+use utils::get::GetRef;
 
 use crate::db::root_db::RootDb;
 
@@ -51,11 +51,13 @@ pub(super) fn expected_param_ty(
     let DeclaratorParent::DeclarationId(declaration_id) = target_module.get(decl_id).parent else {
         return None;
     };
-    let Declaration::ParamDecl(_) = target_module.get(declaration_id) else {
+    let Declaration::ParamDecl(param_decl) = target_module.get(declaration_id) else {
         return None;
     };
 
-    is_overridable_parameter_decl(db, target_module_id, declaration_id)
+    param_decl
+        .kind
+        .is_overridable()
         .then(|| type_of_decl(db, InContainer::new(target_module_id.into(), decl_id)).ty)
 }
 
@@ -148,19 +150,3 @@ pub(super) fn is_compatible_typed_value(db: &RootDb, expected: &Ty, candidate: &
         _ => false,
     }
 }
-
-fn is_overridable_parameter_decl(
-    db: &RootDb,
-    module_id: ModuleId,
-    declaration_id: DeclarationId,
-) -> bool {
-    let (_, module_src_map) = db.module_with_source_map(module_id);
-    let tree = db.parse(module_id.file_id);
-    let Some(DeclarationSrc::ParameterDeclaration(ptr)) = module_src_map.get(declaration_id) else {
-        return false;
-    };
-    let Some(node) = ptr.to_node(&tree) else {
-        return false;
-    };
-    node.first_token().is_some_and(|kw| kw.kind() == syntax::Token![parameter])
-}
diff --git a/crates/ide/src/inlay_hint.rs b/crates/ide/src/inlay_hint.rs
index f409f394..addb4405 100644
--- a/crates/ide/src/inlay_hint.rs
+++ b/crates/ide/src/inlay_hint.rs
@@ -349,7 +349,7 @@ fn process_instantiation(
                 let assign_src = src_map.get(assign_id)?;
                 check_or_throw!(collector.intersect(assign_src.range()));
 
-                let param_id = target_module.param_port_id_by_idx(id)?;
+                let param_id = target_module.overridable_param_id_by_idx(id)?;
                 let param_name = target_module.get(param_id).name.as_ref()?;
                 check_or_throw!(!should_skip(module.get(*assign_expr), param_name));
                 let target_src = InFile::new(target_file, target_src_map.get(param_id)?);
diff --git a/crates/ide/src/inlay_hint/fixtures/ordered_parameter_hints_skip_localparams.sv b/crates/ide/src/inlay_hint/fixtures/ordered_parameter_hints_skip_localparams.sv
new file mode 100644
index 00000000..09d6a90d
--- /dev/null
+++ b/crates/ide/src/inlay_hint/fixtures/ordered_parameter_hints_skip_localparams.sv
@@ -0,0 +1,3 @@
+//- config: parameter
+module child #(localparam L = 1, parameter P = 2) (); endmodule
+module top; child #(3) u(); endmodule
diff --git a/crates/ide/src/module_resolution.rs b/crates/ide/src/module_resolution.rs
index 9428c64c..5a3d7324 100644
--- a/crates/ide/src/module_resolution.rs
+++ b/crates/ide/src/module_resolution.rs
@@ -140,7 +140,8 @@ fn resolve_named_param_in_module(
     };
     let module = db.module(module_id);
     if let DeclaratorParent::DeclarationId(declaration_id) = module.get(decl_id).parent
-        && let Declaration::ParamDecl(_) = module.get(declaration_id)
+        && let Declaration::ParamDecl(param_decl) = module.get(declaration_id)
+        && param_decl.kind.is_overridable()
     {
         Some(PathResolution::ParamDecl(InModule::new(module_id, decl_id)))
     } else {
diff --git a/crates/ide/src/module_resolution/fixtures/named_param_rejects_body_param_when_header_has_parameter_ports.sv b/crates/ide/src/module_resolution/fixtures/named_param_rejects_body_param_when_header_has_parameter_ports.sv
new file mode 100644
index 00000000..707a1281
--- /dev/null
+++ b/crates/ide/src/module_resolution/fixtures/named_param_rejects_body_param_when_header_has_parameter_ports.sv
@@ -0,0 +1,7 @@
+//- root: best_effort
+//- query: named_param
+//- focus: /project/top.sv
+//- file: /project/child.sv
+module child #(parameter PORT = 1) (); parameter BODY = 2; endmodule
+//- file: /project/top.sv
+module top; child #(./*caret*/BODY(1)) u(); endmodule
diff --git a/crates/ide/src/render.rs b/crates/ide/src/render.rs
index 2580e5bf..94dd758e 100644
--- a/crates/ide/src/render.rs
+++ b/crates/ide/src/render.rs
@@ -467,7 +467,7 @@ fn render_declaration_prefix(
             prefix.push_str(&ty);
             prefix
         }
-        Declaration::ParamDecl(_) => format!("parameter {ty}"),
+        Declaration::ParamDecl(param_decl) => format!("{} {ty}", param_decl.kind.keyword()),
         Declaration::GenvarDecl(_) => format!("genvar {ty}"),
         Declaration::SpecparamDecl(_) => {
             if ty.is_empty() {
diff --git a/crates/ide/src/signature_help.rs b/crates/ide/src/signature_help.rs
index ce801814..2303ef14 100644
--- a/crates/ide/src/signature_help.rs
+++ b/crates/ide/src/signature_help.rs
@@ -276,8 +276,16 @@ fn sig_help_for_instantiation(
         }
     }
 
-    for port_decl in
-        target_module.declarations.values().take_while(|d| matches!(d, Declaration::ParamDecl(_)))
+    for port_decl in target_module
+        .declarations
+        .values()
+        .take_while(|declaration| matches!(declaration, Declaration::ParamDecl(_)))
+        .filter(|declaration| {
+            matches!(
+                declaration,
+                Declaration::ParamDecl(param_decl) if param_decl.kind.is_overridable()
+            )
+        })
     {
         let mut buf = String::new();
         if !res.config.params_only {
diff --git a/crates/ide/src/snapshots/ide__inlay_hint__tests__inlay_hint_fixtures@ordered_parameter_hints_skip_localparams.sv.snap b/crates/ide/src/snapshots/ide__inlay_hint__tests__inlay_hint_fixtures@ordered_parameter_hints_skip_localparams.sv.snap
new file mode 100644
index 00000000..2f3a9862
--- /dev/null
+++ b/crates/ide/src/snapshots/ide__inlay_hint__tests__inlay_hint_fixtures@ordered_parameter_hints_skip_localparams.sv.snap
@@ -0,0 +1,6 @@
+---
+source: crates/ide/src/inlay_hint.rs
+expression: hint_snapshot(hints)
+input_file: crates/ide/src/inlay_hint/fixtures/ordered_parameter_hints_skip_localparams.sv
+---
+ParamAssign @ 84 "P:" padding=(false, true) target=Some((43, 48)) edit=Some("TextEdit { changes: [TextEditItem { ins: \".P(\", del: 84..84 }, TextEditItem { ins: \")\", del: 85..85 }] }")
diff --git a/crates/ide/src/snapshots/ide__module_resolution__tests__module_resolution_fixtures@named_param_rejects_body_param_when_header_has_parameter_ports.sv.snap b/crates/ide/src/snapshots/ide__module_resolution__tests__module_resolution_fixtures@named_param_rejects_body_param_when_header_has_parameter_ports.sv.snap
new file mode 100644
index 00000000..37cff7e8
--- /dev/null
+++ b/crates/ide/src/snapshots/ide__module_resolution__tests__module_resolution_fixtures@named_param_rejects_body_param_when_header_has_parameter_ports.sv.snap
@@ -0,0 +1,6 @@
+---
+source: crates/ide/src/module_resolution.rs
+expression: fixture_snapshot(fixture)
+input_file: crates/ide/src/module_resolution/fixtures/named_param_rejects_body_param_when_header_has_parameter_ports.sv
+---
+None
diff --git a/crates/ide/src/verilog_2005.rs b/crates/ide/src/verilog_2005.rs
index 38f2299d..3cc58d29 100644
--- a/crates/ide/src/verilog_2005.rs
+++ b/crates/ide/src/verilog_2005.rs
@@ -2681,7 +2681,7 @@ endmodule
         .unwrap()
         .expect("parameter hover expected");
     assert!(
-        param_hover.info.as_str().contains("parameter logic DEPTH = WIDTH + 1"),
+        param_hover.info.as_str().contains("localparam logic DEPTH = WIDTH + 1"),
         "parameter hover should use parameter-specific renderer: {}",
         param_hover.info.as_str()
     );
@@ -2966,6 +2966,39 @@ endmodule
     );
 }
 
+#[test]
+fn parameter_signature_help_skips_body_params_when_header_has_parameter_ports() {
+    let text = r#"
+module child #(parameter PORT = 1) ();
+  parameter BODY = 2;
+endmodule
+
+module top;
+  child #(/*marker:param*/1) u();
+endmodule
+"#;
+    let (host, file_id, _clean_text, markers) = setup_marked(text);
+    let signature = host
+        .make_analysis()
+        .signature_help(
+            position(file_id, &markers, "param"),
+            crate::signature_help::SignatureHelpConfig { params_only: false },
+        )
+        .unwrap()
+        .expect("signature help expected for ordered parameter assignment");
+
+    assert!(
+        signature.label.contains("PORT"),
+        "port parameter expected in signature help: {}",
+        signature.label
+    );
+    assert!(
+        !signature.label.contains("BODY"),
+        "body parameter should be local when the target has parameter ports: {}",
+        signature.label
+    );
+}
+
 #[test]
 fn verilog_2005_direct_generate_subroutine_resolves_locally() {
     let text = r#"