diff --git a/packages/flutter/lib/src/material/chip.dart b/packages/flutter/lib/src/material/chip.dart
index 95a9338b4f..c3bfbc3f82 100644
--- a/packages/flutter/lib/src/material/chip.dart
+++ b/packages/flutter/lib/src/material/chip.dart
@@ -1728,9 +1728,6 @@ class _RenderChip extends RenderBox with SlottedContainerRenderObjectMixin<_Chip
   bool get isDrawingCheckmark => theme.showCheckmark && !checkmarkAnimation.isDismissed;
   bool get deleteIconShowing => !deleteDrawerAnimation.isDismissed;
 
-  @override
-  bool get sizedByParent => false;
-
   static Rect _boxRect(RenderBox box) => _boxParentData(box).offset & box.size;
 
   static BoxParentData _boxParentData(RenderBox box) => box.parentData! as BoxParentData;
@@ -1775,29 +1772,22 @@ class _RenderChip extends RenderBox with SlottedContainerRenderObjectMixin<_Chip
     return (BaselineOffset(label.getDistanceToActualBaseline(baseline)) + _boxParentData(label).offset.dy).offset;
   }
 
-  Size _layoutLabel(BoxConstraints contentConstraints, double iconSizes, Size size, Size rawSize, [ChildLayouter layoutChild = ChildLayoutHelper.layoutChild]) {
+  BoxConstraints _labelConstraintsFrom(BoxConstraints contentConstraints, double iconWidth, double contentSize, Size rawLabelSize) {
     // Now that we know the label height and the width of the icons, we can
     // determine how much to shrink the width constraints for the "real" layout.
-    final double maxLabelWidth = contentConstraints.maxWidth.isFinite
-      ? math.max(
-          0.0,
-          contentConstraints.maxWidth - iconSizes - theme.labelPadding.horizontal - theme.padding.horizontal,
-        )
-      : size.width;
-    final BoxConstraints labelConstraints = BoxConstraints(
-      minHeight: rawSize.height,
-      maxHeight: size.height,
-      maxWidth: maxLabelWidth,
+    final double freeSpace = contentConstraints.maxWidth - iconWidth - theme.labelPadding.horizontal - theme.padding.horizontal;
+    final double maxLabelWidth = math.max(0.0, freeSpace);
+    return BoxConstraints(
+      minHeight: rawLabelSize.height,
+      maxHeight: contentSize,
+      maxWidth: maxLabelWidth.isFinite ? maxLabelWidth : rawLabelSize.width,
     );
-    final Size updatedSize = layoutChild(label, labelConstraints);
-    return theme.labelPadding.inflateSize(updatedSize);
   }
 
   Size _layoutAvatar(double contentSize, [ChildLayouter layoutChild = ChildLayoutHelper.layoutChild]) {
-    final double requestedSize = math.max(0.0, contentSize);
     final BoxConstraints avatarConstraints = avatarBoxConstraints ?? BoxConstraints.tightFor(
-      width: requestedSize,
-      height: requestedSize,
+      width: contentSize,
+      height: contentSize,
     );
     final Size avatarBoxSize = layoutChild(avatar, avatarConstraints);
     if (!theme.showCheckmark && !theme.showAvatar) {
@@ -1808,10 +1798,9 @@ class _RenderChip extends RenderBox with SlottedContainerRenderObjectMixin<_Chip
   }
 
   Size _layoutDeleteIcon(double contentSize, [ChildLayouter layoutChild = ChildLayoutHelper.layoutChild]) {
-    final double requestedSize = math.max(0.0, contentSize);
     final BoxConstraints deleteIconConstraints = deleteIconBoxConstraints ?? BoxConstraints.tightFor(
-      width: requestedSize,
-      height: requestedSize,
+      width: contentSize,
+      height: contentSize,
     );
     final Size boxSize = layoutChild(deleteIcon, deleteIconConstraints);
     if (!deleteIconShowing) {
@@ -1851,25 +1840,36 @@ class _RenderChip extends RenderBox with SlottedContainerRenderObjectMixin<_Chip
     return _computeSizes(constraints, ChildLayoutHelper.dryLayoutChild).size;
   }
 
+  @override
+  double? computeDryBaseline(BoxConstraints constraints, TextBaseline baseline) {
+    final _ChipSizes sizes = _computeSizes(constraints, ChildLayoutHelper.dryLayoutChild);
+    final BaselineOffset labelBaseline = BaselineOffset(label.getDryBaseline(sizes.labelConstraints, baseline))
+        + (sizes.content - sizes.label.height + sizes.densityAdjustment.dy) / 2
+        + theme.padding.top + theme.labelPadding.top;
+    return labelBaseline.offset;
+  }
+
   _ChipSizes _computeSizes(BoxConstraints constraints, ChildLayouter layoutChild) {
     final BoxConstraints contentConstraints = constraints.loosen();
     // Find out the height of the label within the constraints.
-    final Offset densityAdjustment = Offset(0.0, theme.visualDensity.baseSizeAdjustment.dy / 2.0);
-    final Size rawLabelSize = layoutChild(label, contentConstraints);
+    final Size rawLabelSize = label.getDryLayout(contentConstraints);
     final double contentSize = math.max(
       _kChipHeight - theme.padding.vertical + theme.labelPadding.vertical,
       rawLabelSize.height + theme.labelPadding.vertical,
     );
+    assert(contentSize >= rawLabelSize.height);
     final Size avatarSize = _layoutAvatar(contentSize, layoutChild);
     final Size deleteIconSize = _layoutDeleteIcon(contentSize, layoutChild);
-    final Size labelSize = _layoutLabel(
+
+    final BoxConstraints labelConstraints = _labelConstraintsFrom(
       contentConstraints,
       avatarSize.width + deleteIconSize.width,
-      Size(rawLabelSize.width, contentSize),
+      contentSize,
       rawLabelSize,
-      layoutChild,
     );
 
+    final Size labelSize = theme.labelPadding.inflateSize(layoutChild(label, labelConstraints));
+    final Offset densityAdjustment = Offset(0.0, theme.visualDensity.baseSizeAdjustment.dy / 2.0);
     // This is the overall size of the content: it doesn't include
     // theme.padding, that is added in at the end.
     final Size overallSize = Size(
@@ -1887,6 +1887,7 @@ class _RenderChip extends RenderBox with SlottedContainerRenderObjectMixin<_Chip
       content: contentSize,
       densityAdjustment: densityAdjustment,
       avatar: avatarSize,
+      labelConstraints: labelConstraints,
       label: labelSize,
       deleteIcon: deleteIconSize,
     );
@@ -2232,6 +2233,7 @@ class _ChipSizes {
     required this.overall,
     required this.content,
     required this.avatar,
+    required this.labelConstraints,
     required this.label,
     required this.deleteIcon,
     required this.densityAdjustment,
@@ -2240,6 +2242,7 @@ class _ChipSizes {
   final Size overall;
   final double content;
   final Size avatar;
+  final BoxConstraints labelConstraints;
   final Size label;
   final Size deleteIcon;
   final Offset densityAdjustment;
diff --git a/packages/flutter/test/material/chip_test.dart b/packages/flutter/test/material/chip_test.dart
index 70fbff590b..8a08a44511 100644
--- a/packages/flutter/test/material/chip_test.dart
+++ b/packages/flutter/test/material/chip_test.dart
@@ -5781,6 +5781,18 @@ void main() {
     // Test rendered icon color.
     expect(getIconStyle(tester, deleteIcon)?.color, deleteIconColor);
   });
+
+  testWidgets('Chip label only does layout once', (WidgetTester tester) async {
+    final RenderLayoutCount renderLayoutCount = RenderLayoutCount();
+    final Widget layoutCounter = Center(
+      key: GlobalKey(),
+      child: WidgetToRenderBoxAdapter(renderBox: renderLayoutCount),
+    );
+
+    await tester.pumpWidget(wrapForChip(child: RawChip(label: layoutCounter)));
+
+    expect(renderLayoutCount.layoutCount, 1);
+  });
 }
 
 class _MaterialStateOutlinedBorder extends StadiumBorder implements MaterialStateOutlinedBorder {
@@ -5800,3 +5812,16 @@ class _MaterialStateBorderSide extends MaterialStateBorderSide {
   @override
   BorderSide? resolve(Set<MaterialState> states) => resolver(states);
 }
+
+class RenderLayoutCount extends RenderBox {
+  int layoutCount = 0;
+
+  @override
+  Size computeDryLayout(covariant BoxConstraints constraints) => constraints.biggest;
+
+  @override
+  void performLayout() {
+    layoutCount += 1;
+    size = constraints.biggest;
+  }
+}