diff --git a/src/lightning/fabric/plugins/precision/fsdp.py b/src/lightning/fabric/plugins/precision/fsdp.py
index 270a67e3a2338..189135e7b19e8 100644
--- a/src/lightning/fabric/plugins/precision/fsdp.py
+++ b/src/lightning/fabric/plugins/precision/fsdp.py
@@ -24,6 +24,7 @@
 from lightning.fabric.plugins.precision.amp import _optimizer_handles_unscaling
 from lightning.fabric.plugins.precision.precision import Precision
 from lightning.fabric.plugins.precision.utils import _convert_fp_tensor, _DtypeContextManager
+from lightning.fabric.utilities import rank_zero_warn
 from lightning.fabric.utilities.types import Optimizable
 
 if TYPE_CHECKING:
@@ -84,19 +85,18 @@ def convert_module(self, module: Module) -> Module:
     def mixed_precision_config(self) -> "TorchMixedPrecision":
         from torch.distributed.fsdp.fully_sharded_data_parallel import MixedPrecision as TorchMixedPrecision
 
-        if self.precision == "16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float16
-        elif self.precision == "bf16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.bfloat16
-        elif self.precision == "16-true":
+        if self.precision in ("16-true", "bf16-true"):
+            rank_zero_warn(
+                f"FSDP with `{self.precision}` enables computation in lower precision. "
+                "FSDP will always retain a full-precision copy of the model parameters for sharding."
+            )
+
+        if self.precision in ("16-true", "16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.float16
-        elif self.precision == "bf16-true":
+        elif self.precision in ("bf16-true", "bf16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.bfloat16
         elif self.precision == "32-true":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float32
+            param_dtype = reduce_dtype = buffer_dtype = torch.float32
         else:
             raise ValueError(f"Was unable to infer precision type, received {self.precision!r}.")
 
diff --git a/src/lightning/pytorch/plugins/precision/fsdp.py b/src/lightning/pytorch/plugins/precision/fsdp.py
index f3bab3e915e91..337c6a465278d 100644
--- a/src/lightning/pytorch/plugins/precision/fsdp.py
+++ b/src/lightning/pytorch/plugins/precision/fsdp.py
@@ -24,6 +24,7 @@
 from lightning.fabric.plugins.precision.amp import _optimizer_handles_unscaling
 from lightning.fabric.plugins.precision.fsdp import _PRECISION_INPUT
 from lightning.fabric.plugins.precision.utils import _convert_fp_tensor, _DtypeContextManager
+from lightning.fabric.utilities import rank_zero_warn
 from lightning.fabric.utilities.types import Optimizable
 from lightning.pytorch.plugins.precision.precision import Precision
 from lightning.pytorch.utilities.exceptions import MisconfigurationException
@@ -94,19 +95,18 @@ def clip_grad_by_norm(self, *_: Any, **__: Any) -> None:
     def mixed_precision_config(self) -> "TorchMixedPrecision":
         from torch.distributed.fsdp.fully_sharded_data_parallel import MixedPrecision as TorchMixedPrecision
 
-        if self.precision == "16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float16
-        elif self.precision == "bf16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.bfloat16
-        elif self.precision == "16-true":
+        if self.precision in ("16-true", "bf16-true"):
+            rank_zero_warn(
+                f"FSDP with `{self.precision}` enables computation in lower precision. "
+                "FSDP will always retain a full-precision copy of the model parameters for sharding."
+            )
+
+        if self.precision in ("16-true", "16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.float16
-        elif self.precision == "bf16-true":
+        elif self.precision in ("bf16-true", "bf16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.bfloat16
         elif self.precision == "32-true":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float32
+            param_dtype = reduce_dtype = buffer_dtype = torch.float32
         else:
             raise MisconfigurationException(f"Was unable to infer precision type, received {self.precision!r}.")
 
diff --git a/tests/tests_fabric/plugins/precision/test_fsdp.py b/tests/tests_fabric/plugins/precision/test_fsdp.py
index b15e8e6c65f57..7507002ab4fd1 100644
--- a/tests/tests_fabric/plugins/precision/test_fsdp.py
+++ b/tests/tests_fabric/plugins/precision/test_fsdp.py
@@ -11,6 +11,7 @@
 # WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
 # See the License for the specific language governing permissions and
 # limitations under the License.
+from contextlib import contextmanager
 from unittest.mock import Mock
 
 import pytest
@@ -21,19 +22,30 @@
 from tests_fabric.helpers.runif import RunIf
 
 
+# Pytest passes args/kwargs to the context manager used with `pytest.warns`.
+# `contextlib.nullcontext` doesn't accept them, so this no-op version does.
+@contextmanager
+def null_ctx(*args, **kwargs):
+    yield
+
+
 @pytest.mark.parametrize(
     ("precision", "expected"),
     [
         ("16-true", (torch.float16, torch.float16, torch.float16)),
         ("bf16-true", (torch.bfloat16, torch.bfloat16, torch.bfloat16)),
-        ("16-mixed", (torch.float32, torch.float16, torch.float16)),
-        ("bf16-mixed", (torch.float32, torch.bfloat16, torch.bfloat16)),
+        ("16-mixed", (torch.float16, torch.float16, torch.float16)),
+        ("bf16-mixed", (torch.bfloat16, torch.bfloat16, torch.bfloat16)),
         ("32-true", (torch.float32, torch.float32, torch.float32)),
     ],
 )
 def test_fsdp_precision_config(precision, expected):
     plugin = FSDPPrecision(precision=precision)
-    config = plugin.mixed_precision_config
+
+    warning_ctx = pytest.warns if precision in ("16-true", "bf16-true") else null_ctx
+
+    with warning_ctx(UserWarning, match="enables computation in lower precision"):
+        config = plugin.mixed_precision_config
 
     assert config.param_dtype == expected[0]
     assert config.buffer_dtype == expected[1]
diff --git a/tests/tests_fabric/strategies/test_fsdp_integration.py b/tests/tests_fabric/strategies/test_fsdp_integration.py
index 5da9b50399a94..532f0f9b8ca94 100644
--- a/tests/tests_fabric/strategies/test_fsdp_integration.py
+++ b/tests/tests_fabric/strategies/test_fsdp_integration.py
@@ -87,15 +87,9 @@ def step(self, model, batch):
 
         precision = self.fabric._precision
         assert isinstance(precision, FSDPPrecision)
-        if precision.precision == "16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float16
-        elif precision.precision == "bf16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.bfloat16
-        elif precision.precision == "16-true":
+        if precision.precision in ("16-true", "16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.float16
-        elif precision.precision == "bf16-true":
+        elif precision.precision in ("bf16-true", "bf16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.bfloat16
         else:
             raise ValueError(f"Unknown precision {precision.precision}")
diff --git a/tests/tests_pytorch/plugins/precision/test_fsdp.py b/tests/tests_pytorch/plugins/precision/test_fsdp.py
index f8731aa424b38..0834ef1f98400 100644
--- a/tests/tests_pytorch/plugins/precision/test_fsdp.py
+++ b/tests/tests_pytorch/plugins/precision/test_fsdp.py
@@ -11,6 +11,7 @@
 # WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
 # See the License for the specific language governing permissions and
 # limitations under the License.
+from contextlib import contextmanager
 from unittest.mock import ANY, MagicMock, Mock
 
 import pytest
@@ -21,19 +22,30 @@
 from tests_pytorch.helpers.runif import RunIf
 
 
+# Pytest passes args/kwargs to the context manager used with `pytest.warns`.
+# `contextlib.nullcontext` doesn't accept them, so this no-op version does.
+@contextmanager
+def null_ctx(*args, **kwargs):
+    yield
+
+
 @pytest.mark.parametrize(
     ("precision", "expected"),
     [
         ("16-true", (torch.float16, torch.float16, torch.float16)),
         ("bf16-true", (torch.bfloat16, torch.bfloat16, torch.bfloat16)),
-        ("16-mixed", (torch.float32, torch.float16, torch.float16)),
-        ("bf16-mixed", (torch.float32, torch.bfloat16, torch.bfloat16)),
+        ("16-mixed", (torch.float16, torch.float16, torch.float16)),
+        ("bf16-mixed", (torch.bfloat16, torch.bfloat16, torch.bfloat16)),
         ("32-true", (torch.float32, torch.float32, torch.float32)),
     ],
 )
 def test_fsdp_precision_config(precision, expected):
     plugin = FSDPPrecision(precision=precision)
-    config = plugin.mixed_precision_config
+
+    warning_ctx = pytest.warns if precision in ("16-true", "bf16-true") else null_ctx
+
+    with warning_ctx(UserWarning, match="enables computation in lower precision"):
+        config = plugin.mixed_precision_config
 
     assert config.param_dtype == expected[0]
     assert config.buffer_dtype == expected[1]
diff --git a/tests/tests_pytorch/strategies/test_fsdp.py b/tests/tests_pytorch/strategies/test_fsdp.py
index f7c15b5930be8..8fd60d84d61a1 100644
--- a/tests/tests_pytorch/strategies/test_fsdp.py
+++ b/tests/tests_pytorch/strategies/test_fsdp.py
@@ -77,15 +77,9 @@ def _assert_layer_fsdp_instance(self) -> None:
         assert isinstance(self.layer, FullyShardedDataParallel)
         assert isinstance(self.trainer.strategy.precision_plugin, FSDPPrecision)
 
-        if self.trainer.precision == "16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float16
-        elif self.trainer.precision == "bf16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.bfloat16
-        elif self.trainer.precision == "16-true":
+        if self.trainer.precision in ("16-true", "16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.float16
-        elif self.trainer.precision == "bf16-true":
+        elif self.trainer.precision in ("bf16-true", "bf16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.bfloat16
         else:
             raise ValueError(f"Unknown precision {self.trainer.precision}")
@@ -138,15 +132,9 @@ def _assert_layer_fsdp_instance(self) -> None:
         assert isinstance(self.layer, torch.nn.Sequential)
         assert isinstance(self.trainer.strategy.precision_plugin, FSDPPrecision)
 
-        if self.trainer.precision == "16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.float16
-        elif self.trainer.precision == "bf16-mixed":
-            param_dtype = torch.float32
-            reduce_dtype = buffer_dtype = torch.bfloat16
-        elif self.trainer.precision == "16-true":
+        if self.trainer.precision in ("16-true", "16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.float16
-        elif self.trainer.precision == "bf16-true":
+        elif self.trainer.precision in ("bf16-true", "bf16-mixed"):
             param_dtype = reduce_dtype = buffer_dtype = torch.bfloat16
         else:
             raise ValueError(f"Unknown precision {self.trainer.precision}")