diff --git a/components/ide/jetbrains/backend-plugin/gradle.properties b/components/ide/jetbrains/backend-plugin/gradle.properties
index 2cbce2c7b77a77..846a70cb13f697 100644
--- a/components/ide/jetbrains/backend-plugin/gradle.properties
+++ b/components/ide/jetbrains/backend-plugin/gradle.properties
@@ -10,7 +10,7 @@ platformType=IU
 platformDownloadSources=true
 # Plugin Dependencies -> https://plugins.jetbrains.com/docs/intellij/plugin-dependencies.html
 # Example: platformPlugins = com.intellij.java, com.jetbrains.php:203.4449.22
-platformPlugins=Git4Idea, org.jetbrains.plugins.terminal, com.jetbrains.codeWithMe
+platformPlugins=Git4Idea, org.jetbrains.plugins.terminal, com.jetbrains.codeWithMe, org.jetbrains.plugins.yaml
 # Opt-out flag for bundling Kotlin standard library.
 # See https://plugins.jetbrains.com/docs/intellij/kotlin.html#kotlin-standard-library for details.
 kotlin.stdlib.default.dependency=false
diff --git a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/GitpodProjectManager.kt b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/GitpodProjectManager.kt
index bff55823fdbc3f..6e7b6f71320bb2 100644
--- a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/GitpodProjectManager.kt
+++ b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/GitpodProjectManager.kt
@@ -5,19 +5,31 @@
 package io.gitpod.jetbrains.remote
 
 import com.intellij.ProjectTopics
+import com.intellij.analysis.AnalysisScope
+import com.intellij.codeInspection.actions.RunInspectionIntention
+import com.intellij.codeInspection.ex.InspectionManagerEx
 import com.intellij.openapi.diagnostic.thisLogger
 import com.intellij.openapi.module.Module
 import com.intellij.openapi.module.ModuleManager
+import com.intellij.openapi.project.DumbService
 import com.intellij.openapi.project.ModuleListener
 import com.intellij.openapi.project.Project
 import com.intellij.openapi.projectRoots.ProjectJdkTable
 import com.intellij.openapi.projectRoots.Sdk
 import com.intellij.openapi.roots.ModuleRootModificationUtil
 import com.intellij.openapi.roots.ProjectRootManager
+import com.intellij.openapi.vfs.VfsUtil
+import com.intellij.profile.codeInspection.InspectionProfileManager
+import com.intellij.psi.PsiFile
+import com.intellij.psi.PsiManager
 import com.intellij.util.application
+import io.gitpod.jetbrains.remote.inspections.GitpodConfigInspection
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.gitpodYamlFile
 import kotlinx.coroutines.GlobalScope
 import kotlinx.coroutines.future.await
 import kotlinx.coroutines.launch
+import org.jetbrains.yaml.psi.YAMLFile
+import java.nio.file.Paths
 import java.util.concurrent.CompletableFuture
 
 
@@ -29,6 +41,34 @@ class GitpodProjectManager(
         configureSdks()
     }
 
+    init {
+        application.invokeLater {
+            try {
+                runInspection()
+            } catch (ex: Exception) {
+                thisLogger().error("Failed to run inspection", ex)
+            }
+        }
+    }
+
+    private fun runInspection() {
+        val psiFile = getGitpodYamlPsiFile(project) ?: return
+        val profile = InspectionProfileManager.getInstance(project).currentProfile
+        val inspectionName = GitpodConfigInspection::class.java.simpleName
+        val tool = profile.getInspectionTool(inspectionName, psiFile) ?: return
+        val manager = InspectionManagerEx.getInstance(project) as InspectionManagerEx
+        val scope = AnalysisScope(psiFile)
+        DumbService.getInstance(project).smartInvokeLater {
+            RunInspectionIntention.rerunInspection(tool, manager, scope, psiFile)
+        }
+    }
+
+    private fun getGitpodYamlPsiFile(project: Project): PsiFile? {
+        val basePath = project.basePath ?: return null
+        val vfile = VfsUtil.findFile(Paths.get(basePath, gitpodYamlFile), true) ?: return null
+        return PsiManager.getInstance(project).findFile(vfile) as? YAMLFile ?: return null
+    }
+
     /**
      * It is a workaround for https://youtrack.jetbrains.com/issue/GTW-88
      */
diff --git a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/inspections/GitpodConfigInspection.kt b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/inspections/GitpodConfigInspection.kt
new file mode 100644
index 00000000000000..a49197a5683162
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/inspections/GitpodConfigInspection.kt
@@ -0,0 +1,65 @@
+// Copyright (c) 2022 Gitpod GmbH. All rights reserved.
+// Licensed under the GNU Affero General Public License (AGPL).
+// See License-AGPL.txt in the project root for license information.
+
+package io.gitpod.jetbrains.remote.inspections
+
+import com.intellij.codeInspection.LocalInspectionTool
+import com.intellij.codeInspection.ProblemsHolder
+import com.intellij.diagnostic.VMOptions
+import com.intellij.openapi.util.BuildNumber
+import com.intellij.psi.PsiElementVisitor
+import com.intellij.psi.PsiFile
+import io.gitpod.jetbrains.remote.quickfixes.AddVMOptionsQuickFix
+import io.gitpod.jetbrains.remote.quickfixes.ReplaceVMOptionsQuickFix
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.YamlKey
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.defaultXmxMiB
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.getJetBrainsProductName
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.gitpodYamlFile
+import org.jetbrains.yaml.YAMLUtil
+import org.jetbrains.yaml.psi.YAMLFile
+import org.jetbrains.yaml.psi.YAMLKeyValue
+
+class GitpodConfigInspection : LocalInspectionTool() {
+
+    private val runtimeXmxMiB = Runtime.getRuntime().maxMemory().shr(20)
+
+    override fun buildVisitor(holder: ProblemsHolder, isOnTheFly: Boolean): PsiElementVisitor {
+        return object : PsiElementVisitor() {
+            override fun visitFile(file: PsiFile) {
+                if (file.name != gitpodYamlFile || file !is YAMLFile) return
+                val productCode = BuildNumber.currentVersion().productCode
+                val productName = getJetBrainsProductName(productCode) ?: return
+                val keyValue = YAMLUtil.getQualifiedKeyInFile(file, YamlKey.jetbrains, productName, YamlKey.vmOptions)
+                if (keyValue == null) {
+                    val description = "IDE's max heap size (-Xmx) is ${runtimeXmxMiB}m, but not configured in $gitpodYamlFile"
+                    val quickFix = AddVMOptionsQuickFix(productName, runtimeXmxMiB)
+                    holder.registerProblem(file, description, quickFix)
+                    return
+                }
+                val configuredXmxMiB = getUserConfiguredXmxValue(keyValue)
+                val quickFix = ReplaceVMOptionsQuickFix(runtimeXmxMiB)
+                if (configuredXmxMiB == null && runtimeXmxMiB != defaultXmxMiB) {
+                    val description = "IDE's max heap size (-Xmx) is ${runtimeXmxMiB}m, but not configured in $gitpodYamlFile"
+                    holder.registerProblem(keyValue, description, quickFix)
+                } else if (configuredXmxMiB != null && runtimeXmxMiB != configuredXmxMiB) {
+                    val description = "IDE's max heap size (-Xmx) is ${runtimeXmxMiB}m, but -Xmx${configuredXmxMiB}m configured in $gitpodYamlFile"
+                    holder.registerProblem(keyValue, description, quickFix)
+                }
+            }
+        }
+    }
+
+    private fun getUserConfiguredXmxValue(vmOptionsKeyValue: YAMLKeyValue): Long? {
+        val vmOptions = vmOptionsKeyValue.valueText.trim().split("\\s".toRegex())
+        // the rightmost option is the one to take effect
+        val finalXmx = vmOptions.lastOrNull { it.startsWith("-Xmx") } ?: return null
+        val xmxValue = finalXmx.substringAfter("-Xmx")
+        return try {
+            VMOptions.parseMemoryOption(xmxValue).shr(20)
+        } catch (e: IllegalArgumentException) {
+            // ignore invalid user configuration
+            null
+        }
+    }
+}
\ No newline at end of file
diff --git a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/AddVMOptionsQuickFix.kt b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/AddVMOptionsQuickFix.kt
new file mode 100644
index 00000000000000..7a5e290ec285b6
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/AddVMOptionsQuickFix.kt
@@ -0,0 +1,64 @@
+// Copyright (c) 2022 Gitpod GmbH. All rights reserved.
+// Licensed under the GNU Affero General Public License (AGPL).
+// See License-AGPL.txt in the project root for license information.
+
+package io.gitpod.jetbrains.remote.quickfixes
+
+import com.intellij.codeInspection.LocalQuickFix
+import com.intellij.codeInspection.ProblemDescriptor
+import com.intellij.openapi.diagnostic.thisLogger
+import com.intellij.openapi.project.Project
+import com.intellij.psi.PsiDocumentManager
+import com.intellij.psi.PsiElement
+import com.intellij.psi.codeStyle.CodeStyleManager
+import com.intellij.psi.util.PsiTreeUtil
+import com.intellij.util.IncorrectOperationException
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.YamlKey
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.gitpodYamlFile
+import org.jetbrains.yaml.YAMLElementGenerator
+import org.jetbrains.yaml.psi.YAMLFile
+import org.jetbrains.yaml.psi.YAMLKeyValue
+
+class AddVMOptionsQuickFix(private val productName: String, private val xmxValueMiB: Long) : LocalQuickFix {
+
+    override fun getName() = "Add -Xmx${xmxValueMiB}m to $gitpodYamlFile"
+
+    override fun getFamilyName() = name
+
+    override fun applyFix(project: Project, descriptor: ProblemDescriptor) {
+        val psiFile = descriptor.psiElement as? YAMLFile ?: return
+        val document = psiFile.viewProvider.document ?: return
+        val generator = YAMLElementGenerator.getInstance(project)
+        val jetbrainsKeyValue = findOrCreateYamlKeyValue(psiFile, YamlKey.jetbrains, "", generator) ?: return
+        val productKeyValue = findOrCreateYamlKeyValue(jetbrainsKeyValue, productName, "", generator) ?: return
+        findOrCreateYamlKeyValue(productKeyValue, YamlKey.vmOptions, "-Xmx${xmxValueMiB}m", generator)
+        PsiDocumentManager.getInstance(project).doPostponedOperationsAndUnblockDocument(document)
+        try {
+            CodeStyleManager.getInstance(project).reformat(jetbrainsKeyValue)
+        } catch (e: IncorrectOperationException) {
+            thisLogger().warn("AddVMOptionsQuickFix reformat failed", e)
+        }
+    }
+
+    private fun findOrCreateYamlKeyValue(
+        parent: PsiElement,
+        keyText: String,
+        valueText: String,
+        generator: YAMLElementGenerator
+    ): PsiElement? {
+        var element = findElementByYamlKeyText(parent, keyText)
+        return if (element == null) {
+            element = generator.createYamlKeyValue(keyText, valueText)
+            parent.add(generator.createEol())
+            parent.add(element) ?: return null
+        } else {
+            element
+        }
+    }
+
+    private fun findElementByYamlKeyText(rootElement: PsiElement, keyText: String): PsiElement? {
+        return PsiTreeUtil.collectElements(rootElement) {
+            it is YAMLKeyValue && it.keyText == keyText
+        }.firstOrNull()
+    }
+}
\ No newline at end of file
diff --git a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/ApplyVMOptionsQuickFix.kt b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/ApplyVMOptionsQuickFix.kt
new file mode 100644
index 00000000000000..63616cdfc25294
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/ApplyVMOptionsQuickFix.kt
@@ -0,0 +1,23 @@
+// Copyright (c) 2022 Gitpod GmbH. All rights reserved.
+// Licensed under the GNU Affero General Public License (AGPL).
+// See License-AGPL.txt in the project root for license information.
+
+package io.gitpod.jetbrains.remote.quickfixes
+
+import com.intellij.codeInspection.LocalQuickFix
+import com.intellij.codeInspection.ProblemDescriptor
+import com.intellij.diagnostic.VMOptions
+import com.intellij.openapi.project.Project
+
+class ApplyVMOptionsQuickFix(private val quickFixName: String, private val xmxValueMiB: Long) : LocalQuickFix {
+
+    override fun getName() = quickFixName
+
+    override fun getFamilyName() = name
+
+    override fun applyFix(project: Project, descriptor: ProblemDescriptor) {
+        if (VMOptions.canWriteOptions()) {
+            VMOptions.setOption(VMOptions.MemoryKind.HEAP, xmxValueMiB.toInt())
+        }
+    }
+}
\ No newline at end of file
diff --git a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/ReplaceVMOptionsQuickFix.kt b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/ReplaceVMOptionsQuickFix.kt
new file mode 100644
index 00000000000000..028c2dc2c770a1
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/quickfixes/ReplaceVMOptionsQuickFix.kt
@@ -0,0 +1,36 @@
+// Copyright (c) 2022 Gitpod GmbH. All rights reserved.
+// Licensed under the GNU Affero General Public License (AGPL).
+// See License-AGPL.txt in the project root for license information.
+
+package io.gitpod.jetbrains.remote.quickfixes
+
+import com.intellij.codeInspection.LocalQuickFix
+import com.intellij.codeInspection.ProblemDescriptor
+import com.intellij.openapi.project.Project
+import io.gitpod.jetbrains.remote.utils.GitpodConfig.YamlKey
+import org.jetbrains.yaml.YAMLElementGenerator
+import org.jetbrains.yaml.psi.YAMLKeyValue
+
+class ReplaceVMOptionsQuickFix(private val xmxValueMiB: Long) : LocalQuickFix {
+
+    override fun getName() = "Set Xmx to ${xmxValueMiB}m"
+
+    override fun getFamilyName() = name
+
+    override fun applyFix(project: Project, descriptor: ProblemDescriptor) {
+        val vmOptionsKeyValue = descriptor.psiElement as? YAMLKeyValue ?: return
+        if (vmOptionsKeyValue.keyText != YamlKey.vmOptions) return
+        val vmOptions = vmOptionsKeyValue.valueText.trim().split("\\s".toRegex())
+        val xmxUpdated = "-Xmx${xmxValueMiB}m"
+        val xmxOptions = vmOptions
+            .filter { it.startsWith("-Xmx") }
+            .map { xmxUpdated }
+            .ifEmpty { listOf(xmxUpdated) }
+        val nonXmxOptions = vmOptions
+            .filter { !it.startsWith("-Xmx") }
+        val newVmOptions = (xmxOptions + nonXmxOptions).toSortedSet().joinToString(" ")
+        val generator = YAMLElementGenerator.getInstance(project)
+        val psiElementUpdated = generator.createYamlKeyValue(YamlKey.vmOptions, newVmOptions)
+        vmOptionsKeyValue.replace(psiElementUpdated)
+    }
+}
\ No newline at end of file
diff --git a/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/utils/GitpodConfig.kt b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/utils/GitpodConfig.kt
new file mode 100644
index 00000000000000..faf5a287cdcb2f
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/kotlin/io/gitpod/jetbrains/remote/utils/GitpodConfig.kt
@@ -0,0 +1,34 @@
+// Copyright (c) 2022 Gitpod GmbH. All rights reserved.
+// Licensed under the GNU Affero General Public License (AGPL).
+// See License-AGPL.txt in the project root for license information.
+
+package io.gitpod.jetbrains.remote.utils
+
+/**
+ * Constants and util functions for Gitpod config spec
+ */
+object GitpodConfig {
+
+    // FIXME: get from env var
+    const val defaultXmxMiB = 2048L
+    const val gitpodYamlFile = ".gitpod.yml"
+
+    object YamlKey {
+        const val jetbrains = "jetbrains"
+        const val vmOptions = "vmoptions"
+    }
+
+    /**
+     * map JetBrains IDE productCode to YAML key for .gitpod.yml
+     */
+    fun getJetBrainsProductName(productCode: String): String? {
+        return when (productCode) {
+            "IC" -> "intellij"
+            "IU" -> "intellij"
+            "PS" -> "phpstorm"
+            "PY" -> "pycharm"
+            "GO" -> "goland"
+            else -> null
+        }
+    }
+}
diff --git a/components/ide/jetbrains/backend-plugin/src/main/resources/META-INF/plugin.xml b/components/ide/jetbrains/backend-plugin/src/main/resources/META-INF/plugin.xml
index bbb6f3991a9cdc..b8ad5a2666cccd 100644
--- a/components/ide/jetbrains/backend-plugin/src/main/resources/META-INF/plugin.xml
+++ b/components/ide/jetbrains/backend-plugin/src/main/resources/META-INF/plugin.xml
@@ -19,6 +19,7 @@
         <plugin id="Git4Idea"/>
         <plugin id="org.jetbrains.plugins.terminal"/>
         <plugin id="com.jetbrains.codeWithMe"/>
+        <plugin id="org.jetbrains.plugins.yaml"/>
     </dependencies>
 
     <extensions defaultExtensionNs="com.intellij">
@@ -30,6 +31,13 @@
         <projectService serviceImplementation="io.gitpod.jetbrains.remote.GitpodClientProjectSessionTracker" client="guest" preload="true"/>
         <projectService serviceImplementation="io.gitpod.jetbrains.remote.GitpodProjectManager" preload="true"/>
         <gateway.customization.name implementation="io.gitpod.jetbrains.remote.GitpodGatewayClientCustomizationProvider"/>
+        <localInspection language="yaml" bundle="messages.GitpodBundle"
+                         shortName="GitpodConfigInspection"
+                         groupKey="inspections.group.name"
+                         key="inspections.gitpod.schema.validation.name"
+                         level="WARNING" enabledByDefault="true"
+                         implementationClass="io.gitpod.jetbrains.remote.inspections.GitpodConfigInspection"
+        />
     </extensions>
 
 </idea-plugin>
diff --git a/components/ide/jetbrains/backend-plugin/src/main/resources/inspectionDescriptions/GitpodConfigInspection.html b/components/ide/jetbrains/backend-plugin/src/main/resources/inspectionDescriptions/GitpodConfigInspection.html
new file mode 100644
index 00000000000000..80e06412ddbe23
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/resources/inspectionDescriptions/GitpodConfigInspection.html
@@ -0,0 +1,18 @@
+<!--
+ Copyright (c) 2022 Gitpod GmbH. All rights reserved.
+ Licensed under the GNU Affero General Public License (AGPL).
+ See License-AGPL.txt in the project root for license information.
+-->
+
+<html>
+<body>
+Reports invalid or missing -Xmx configs in the Gitpod configuration.
+<p><b>Example configuration:</b></p>
+<pre><code>
+    jetbrains:
+      intellij:
+        vmoptions: -Xmx4g
+</code></pre>
+<p>More information: <a href="https://www.gitpod.io/docs/references/gitpod-yml#jetbrainsproductvmoptions">https://www.gitpod.io/docs/references/gitpod-yml#jetbrainsproductvmoptions</a></p>
+</body>
+</html>
diff --git a/components/ide/jetbrains/backend-plugin/src/main/resources/messages/GitpodBundle.properties b/components/ide/jetbrains/backend-plugin/src/main/resources/messages/GitpodBundle.properties
new file mode 100644
index 00000000000000..02a647d8960d40
--- /dev/null
+++ b/components/ide/jetbrains/backend-plugin/src/main/resources/messages/GitpodBundle.properties
@@ -0,0 +1,2 @@
+inspections.group.name=Gitpod
+inspections.gitpod.schema.validation.name=Incorrect -Xmx config
\ No newline at end of file