diff --git a/tests/dbt/test_docs.py b/tests/dbt/test_docs.py
new file mode 100644
index 0000000000..7c21edb970
--- /dev/null
+++ b/tests/dbt/test_docs.py
@@ -0,0 +1,28 @@
+from pathlib import Path
+import pytest
+
+from sqlmesh.core.config.model import ModelDefaultsConfig
+from sqlmesh.dbt.context import DbtContext
+from sqlmesh.dbt.manifest import ManifestHelper
+from sqlmesh.dbt.profile import Profile
+
+
+pytestmark = pytest.mark.dbt
+
+
+@pytest.mark.xdist_group("dbt_manifest")
+def test_docs_inline():
+    project_path = Path("tests/fixtures/dbt/sushi_test")
+    profile = Profile.load(DbtContext(project_path))
+
+    helper = ManifestHelper(
+        project_path,
+        project_path,
+        "sushi",
+        profile.target,
+        model_defaults=ModelDefaultsConfig(start="2020-01-01"),
+    )
+    # Inline description in yaml
+    assert helper.models()["waiters"].description == "waiters docs block"
+    # Docs block from .md file
+    assert helper.models()["top_waiters"].description == "description of top waiters"
diff --git a/tests/fixtures/dbt/sushi_test/models/schema.yml b/tests/fixtures/dbt/sushi_test/models/schema.yml
index a64ce3c1fc..ac99269207 100644
--- a/tests/fixtures/dbt/sushi_test/models/schema.yml
+++ b/tests/fixtures/dbt/sushi_test/models/schema.yml
@@ -2,6 +2,7 @@ version: 2
 
 models:
   - name: top_waiters
+    description: description of top waiters
     columns:
       - name: waiter_id
         data_type: int
@@ -18,6 +19,7 @@ models:
         warn_after: {count: 8, period: hour}
         error_after: {count: 9, period: hour}
   - name: waiters
+    description: '{{ doc("waiters") }}'
   - name: waiter_as_customer_by_day
   - name: waiter_revenue_by_day
     versions:
diff --git a/tests/fixtures/dbt/sushi_test/models/waiters_doc_block.md b/tests/fixtures/dbt/sushi_test/models/waiters_doc_block.md
new file mode 100644
index 0000000000..99d1582c91
--- /dev/null
+++ b/tests/fixtures/dbt/sushi_test/models/waiters_doc_block.md
@@ -0,0 +1,4 @@
+{% docs waiters %}
+waiters docs block
+{% enddocs %}
+