diff --git a/source/blender/editors/include/UI_interface_c.hh b/source/blender/editors/include/UI_interface_c.hh
index d4cde172123..6dc15d98766 100644
--- a/source/blender/editors/include/UI_interface_c.hh
+++ b/source/blender/editors/include/UI_interface_c.hh
@@ -2545,6 +2545,12 @@ bool uiTemplateEventFromKeymapItem(uiLayout *layout,
                                    const wmKeyMapItem *kmi,
                                    bool text_fallback);
 
+/* Draw keymap item for status bar. Returns number of items consumed,
+ * as X/Y/Z items may get merged to use less space. */
+int uiTemplateStatusBarModalItem(uiLayout *layout,
+                                 const wmKeyMap *keymap,
+                                 const EnumPropertyItem *item);
+
 void uiTemplateComponentMenu(uiLayout *layout,
                              PointerRNA *ptr,
                              const char *propname,
diff --git a/source/blender/editors/interface/templates/interface_templates.cc b/source/blender/editors/interface/templates/interface_templates.cc
index 1c0f36c9333..49436bbe3ee 100644
--- a/source/blender/editors/interface/templates/interface_templates.cc
+++ b/source/blender/editors/interface/templates/interface_templates.cc
@@ -6519,6 +6519,89 @@ void uiTemplateKeymapItemProperties(uiLayout *layout, PointerRNA *ptr)
 /** \name Event Icon Template
  * \{ */
 
+static const wmKeyMapItem *keymap_item_from_enum_item(const wmKeyMap *keymap,
+                                                      const EnumPropertyItem *item)
+{
+  if (item == nullptr) {
+    return nullptr;
+  }
+
+  for (wmKeyMapItem *kmi = static_cast<wmKeyMapItem *>(keymap->items.first); kmi; kmi = kmi->next)
+  {
+    if (kmi->val == KM_RELEASE) {
+      /* Assume release events just disable something which was toggled on. */
+      continue;
+    }
+    if (kmi->propvalue == item->value) {
+      return kmi;
+    }
+  }
+
+  return nullptr;
+}
+
+static bool keymap_item_can_collapse(const wmKeyMapItem *kmi_a, const wmKeyMapItem *kmi_b)
+{
+  return (kmi_a->shift == kmi_b->shift && kmi_a->ctrl == kmi_b->ctrl && kmi_a->alt == kmi_b->alt &&
+          kmi_a->oskey == kmi_b->oskey);
+}
+
+int uiTemplateStatusBarModalItem(uiLayout *layout,
+                                 const wmKeyMap *keymap,
+                                 const EnumPropertyItem *item)
+{
+  const wmKeyMapItem *kmi = keymap_item_from_enum_item(keymap, item);
+  if (kmi == nullptr) {
+    return 0;
+  }
+
+  /* Try to merge some known XYZ items to save horizontal space. */
+  const EnumPropertyItem *item_y = (item[1].identifier) ? item + 1 : nullptr;
+  const EnumPropertyItem *item_z = (item_y && item[2].identifier) ? item + 2 : nullptr;
+  const wmKeyMapItem *kmi_y = keymap_item_from_enum_item(keymap, item_y);
+  const wmKeyMapItem *kmi_z = keymap_item_from_enum_item(keymap, item_z);
+
+  if (kmi_y && kmi_z && keymap_item_can_collapse(kmi, kmi_y) &&
+      keymap_item_can_collapse(kmi_y, kmi_z))
+  {
+    const char *xyz_label = nullptr;
+
+    if (STREQ(item->identifier, "AXIS_X") && STREQ(item_y->identifier, "AXIS_Y") &&
+        STREQ(item_z->identifier, "AXIS_Z"))
+    {
+      xyz_label = IFACE_("Axis");
+    }
+    else if (STREQ(item->identifier, "PLANE_X") && STREQ(item_y->identifier, "PLANE_Y") &&
+             STREQ(item_z->identifier, "PLANE_Z"))
+    {
+      xyz_label = IFACE_("Plane");
+    }
+
+    if (xyz_label) {
+      int icon_mod[4];
+      int icon = UI_icon_from_keymap_item(kmi, icon_mod);
+      for (int j = 0; j < ARRAY_SIZE(icon_mod) && icon_mod[j]; j++) {
+        uiItemL(layout, "", icon_mod[j]);
+      }
+      uiItemL(layout, "", icon);
+
+      icon = UI_icon_from_keymap_item(kmi_y, icon_mod);
+      uiItemL(layout, "", icon);
+
+      icon = UI_icon_from_keymap_item(kmi_z, icon_mod);
+      uiItemL(layout, "", icon);
+
+      uiItemS_ex(layout, 0.6f);
+      uiItemL(layout, xyz_label, ICON_NONE);
+      uiItemS_ex(layout, 0.7f);
+      return 3;
+    }
+  }
+
+  /* Single item without merging. */
+  return uiTemplateEventFromKeymapItem(layout, item->name, kmi, false) ? 1 : 0;
+}
+
 bool uiTemplateEventFromKeymapItem(uiLayout *layout,
                                    const char *text,
                                    const wmKeyMapItem *kmi,
diff --git a/source/blender/windowmanager/intern/wm_event_system.cc b/source/blender/windowmanager/intern/wm_event_system.cc
index 6ae52037fff..534b90e6459 100644
--- a/source/blender/windowmanager/intern/wm_event_system.cc
+++ b/source/blender/windowmanager/intern/wm_event_system.cc
@@ -6388,32 +6388,16 @@ bool WM_window_modal_keymap_status_draw(bContext *C, wmWindow *win, uiLayout *la
       continue;
     }
 
-    bool show_text = true;
-
-    {
-      /* WARNING: O(n^2). */
-      wmKeyMapItem *kmi = nullptr;
-      for (kmi = static_cast<wmKeyMapItem *>(keymap->items.first); kmi; kmi = kmi->next) {
-        if (kmi->propvalue == items[i].value) {
-          break;
-        }
-      }
-      if (kmi != nullptr) {
-        if (kmi->val == KM_RELEASE) {
-          /* Assume release events just disable something which was toggled on. */
-          continue;
-        }
-        if (uiTemplateEventFromKeymapItem(row, items[i].name, kmi, false)) {
-          show_text = false;
-        }
-      }
+    const int num_items_used = uiTemplateStatusBarModalItem(row, keymap, items + i);
+    if (num_items_used > 0) {
+      /* Skip items in case consecutive items were merged. */
+      i += num_items_used - 1;
     }
-    if (show_text) {
-      if (std::optional<std::string> str = WM_modalkeymap_operator_items_to_string(
-              op->type, items[i].value, true))
-      {
-        uiItemL(row, fmt::format("{}: {}", *str, items[i].name).c_str(), ICON_NONE);
-      }
+    else if (std::optional<std::string> str = WM_modalkeymap_operator_items_to_string(
+                 op->type, items[i].value, true))
+    {
+      /*  Show text instead */
+      uiItemL(row, fmt::format("{}: {}", *str, items[i].name).c_str(), ICON_NONE);
     }
   }
   return true;