diff --git a/integration/nestjs-metadata-grpc-js/hero.ts b/integration/nestjs-metadata-grpc-js/hero.ts
index 54483ffd9..b2ca9d0eb 100644
--- a/integration/nestjs-metadata-grpc-js/hero.ts
+++ b/integration/nestjs-metadata-grpc-js/hero.ts
@@ -34,9 +34,9 @@ export interface HeroServiceClient {
 }
 
 export interface HeroServiceController {
-  findOneHero(request: HeroById, metadata?: Metadata): Promise<Hero> | Observable<Hero> | Hero;
+  findOneHero(request: HeroById, metadata?: Metadata): Promise<Hero> | Hero;
 
-  findOneVillain(request: VillainById, metadata?: Metadata): Promise<Villain> | Observable<Villain> | Villain;
+  findOneVillain(request: VillainById, metadata?: Metadata): Promise<Villain> | Villain;
 
   findManyVillain(request: Observable<VillainById>, metadata?: Metadata): Observable<Villain>;
 }
diff --git a/integration/nestjs-metadata-restparameters/hero.ts b/integration/nestjs-metadata-restparameters/hero.ts
index 6ef287bac..4fe80f18f 100644
--- a/integration/nestjs-metadata-restparameters/hero.ts
+++ b/integration/nestjs-metadata-restparameters/hero.ts
@@ -34,13 +34,13 @@ export interface HeroServiceClient {
 }
 
 export interface HeroServiceController {
-  findOneHero(request: HeroById, metadata: Metadata, ...rest: any): Promise<Hero> | Observable<Hero> | Hero;
+  findOneHero(request: HeroById, metadata: Metadata, ...rest: any): Promise<Hero> | Hero;
 
   findOneVillain(
     request: VillainById,
     metadata: Metadata,
     ...rest: any
-  ): Promise<Villain> | Observable<Villain> | Villain;
+  ): Promise<Villain> | Villain;
 
   findManyVillain(request: Observable<VillainById>, metadata: Metadata, ...rest: any): Observable<Villain>;
 }
diff --git a/integration/nestjs-metadata/hero.ts b/integration/nestjs-metadata/hero.ts
index 54483ffd9..b2ca9d0eb 100644
--- a/integration/nestjs-metadata/hero.ts
+++ b/integration/nestjs-metadata/hero.ts
@@ -34,9 +34,9 @@ export interface HeroServiceClient {
 }
 
 export interface HeroServiceController {
-  findOneHero(request: HeroById, metadata?: Metadata): Promise<Hero> | Observable<Hero> | Hero;
+  findOneHero(request: HeroById, metadata?: Metadata): Promise<Hero> | Hero;
 
-  findOneVillain(request: VillainById, metadata?: Metadata): Promise<Villain> | Observable<Villain> | Villain;
+  findOneVillain(request: VillainById, metadata?: Metadata): Promise<Villain> | Villain;
 
   findManyVillain(request: Observable<VillainById>, metadata?: Metadata): Observable<Villain>;
 }
diff --git a/integration/nestjs-restparameters/hero.ts b/integration/nestjs-restparameters/hero.ts
index abf56feb9..c1f897730 100644
--- a/integration/nestjs-restparameters/hero.ts
+++ b/integration/nestjs-restparameters/hero.ts
@@ -33,9 +33,9 @@ export interface HeroServiceClient {
 }
 
 export interface HeroServiceController {
-  findOneHero(request: HeroById, ...rest: any): Promise<Hero> | Observable<Hero> | Hero;
+  findOneHero(request: HeroById, ...rest: any): Promise<Hero> | Hero;
 
-  findOneVillain(request: VillainById, ...rest: any): Promise<Villain> | Observable<Villain> | Villain;
+  findOneVillain(request: VillainById, ...rest: any): Promise<Villain> | Villain;
 
   findManyVillain(request: Observable<VillainById>, ...rest: any): Observable<Villain>;
 }
diff --git a/integration/nestjs-simple-restparameters/hero.ts b/integration/nestjs-simple-restparameters/hero.ts
index b7bb522a5..6133ab148 100644
--- a/integration/nestjs-simple-restparameters/hero.ts
+++ b/integration/nestjs-simple-restparameters/hero.ts
@@ -17,7 +17,7 @@ export interface HeroServiceClient {
 }
 
 export interface HeroServiceController {
-  findCurrentUser(request: Empty, ...rest: any): Promise<User> | Observable<User> | User;
+  findCurrentUser(request: Empty, ...rest: any): Promise<User> | User;
 }
 
 export function HeroServiceControllerMethods() {
diff --git a/integration/nestjs-simple-usedate/hero.ts b/integration/nestjs-simple-usedate/hero.ts
index cf606e35d..37e15f09f 100644
--- a/integration/nestjs-simple-usedate/hero.ts
+++ b/integration/nestjs-simple-usedate/hero.ts
@@ -53,13 +53,13 @@ export interface HeroServiceClient {
 export interface HeroServiceController {
   addOneHero(request: Hero): void;
 
-  findOneHero(request: HeroById): Promise<Hero> | Observable<Hero> | Hero;
+  findOneHero(request: HeroById): Promise<Hero> | Hero;
 
-  findOneVillain(request: VillainById): Promise<Villain> | Observable<Villain> | Villain;
+  findOneVillain(request: VillainById): Promise<Villain> | Villain;
 
   findManyVillain(request: Observable<VillainById>): Observable<Villain>;
 
-  findManyVillainStreamIn(request: Observable<VillainById>): Promise<Villain> | Observable<Villain> | Villain;
+  findManyVillainStreamIn(request: Observable<VillainById>): Promise<Villain> | Villain;
 
   findManyVillainStreamOut(request: VillainById): Observable<Villain>;
 }
diff --git a/integration/nestjs-simple/hero.ts b/integration/nestjs-simple/hero.ts
index a6d0e0788..0993f0bd1 100644
--- a/integration/nestjs-simple/hero.ts
+++ b/integration/nestjs-simple/hero.ts
@@ -49,13 +49,13 @@ export interface HeroServiceClient {
 export interface HeroServiceController {
   addOneHero(request: Hero): void;
 
-  findOneHero(request: HeroById): Promise<Hero> | Observable<Hero> | Hero;
+  findOneHero(request: HeroById): Promise<Hero> | Hero;
 
-  findOneVillain(request: VillainById): Promise<Villain> | Observable<Villain> | Villain;
+  findOneVillain(request: VillainById): Promise<Villain> | Villain;
 
   findManyVillain(request: Observable<VillainById>): Observable<Villain>;
 
-  findManyVillainStreamIn(request: Observable<VillainById>): Promise<Villain> | Observable<Villain> | Villain;
+  findManyVillainStreamIn(request: Observable<VillainById>): Promise<Villain> | Villain;
 
   findManyVillainStreamOut(request: VillainById): Observable<Villain>;
 }
diff --git a/src/generate-nestjs.ts b/src/generate-nestjs.ts
index 59b16aca7..901a04234 100644
--- a/src/generate-nestjs.ts
+++ b/src/generate-nestjs.ts
@@ -55,13 +55,13 @@ export function generateNestjsServiceController(
     let returns: Code;
     if (isEmptyType(methodDesc.outputType)) {
       returns = code`void`;
-    } else if (options.returnObservable || methodDesc.serverStreaming) {
+    } else if (methodDesc.serverStreaming) {
       returns = code`${responseObservable(ctx, methodDesc)}`;
     } else {
       // generate nestjs union type
       returns = code`
         ${responsePromise(ctx, methodDesc)}
-        | ${responseObservable(ctx, methodDesc)}
+        ${options.returnObservable ? "\n| " + responseObservable(ctx, methodDesc) : ''}
         | ${responseType(ctx, methodDesc)}
       `;
     }