diff --git a/packages/playwright-core/src/server/chromium/chromiumSwitches.ts b/packages/playwright-core/src/server/chromium/chromiumSwitches.ts
index 54b80a5d82..34c89af653 100644
--- a/packages/playwright-core/src/server/chromium/chromiumSwitches.ts
+++ b/packages/playwright-core/src/server/chromium/chromiumSwitches.ts
@@ -36,7 +36,8 @@ export const chromiumSwitches = [
   // HttpsUpgrades - https://github.com/microsoft/playwright/pull/27605
   // PaintHolding - https://github.com/microsoft/playwright/issues/28023
   // PlzDedicatedWorker - https://github.com/microsoft/playwright/issues/31747
-  '--disable-features=ImprovedCookieControls,LazyFrameLoading,GlobalMediaControls,DestroyProfileOnBrowserClose,MediaRouter,DialMediaRouteProvider,AcceptCHFrame,AutoExpandDetailsElement,CertificateTransparencyComponentUpdater,AvoidUnnecessaryBeforeUnloadCheckSync,Translate,HttpsUpgrades,PaintHolding,PlzDedicatedWorker',
+  // ThirdPartyStoragePartitioning - https://github.com/microsoft/playwright/issues/32230
+  '--disable-features=ImprovedCookieControls,LazyFrameLoading,GlobalMediaControls,DestroyProfileOnBrowserClose,MediaRouter,DialMediaRouteProvider,AcceptCHFrame,AutoExpandDetailsElement,CertificateTransparencyComponentUpdater,AvoidUnnecessaryBeforeUnloadCheckSync,Translate,HttpsUpgrades,PaintHolding,PlzDedicatedWorker,ThirdPartyStoragePartitioning',
   '--allow-pre-commit-input',
   '--disable-hang-monitor',
   '--disable-ipc-flooding-protection',
diff --git a/tests/library/browsercontext-storage-state.spec.ts b/tests/library/browsercontext-storage-state.spec.ts
index 89bb84d2c3..df56ae9740 100644
--- a/tests/library/browsercontext-storage-state.spec.ts
+++ b/tests/library/browsercontext-storage-state.spec.ts
@@ -15,6 +15,7 @@
  * limitations under the License.
  */
 
+import { attachFrame } from 'tests/config/utils';
 import { browserTest as it, expect } from '../config/browserTest';
 import fs from 'fs';
 
@@ -275,3 +276,47 @@ it('should work when service worker is intefering', async ({ page, context, serv
   const storageState = await context.storageState();
   expect(storageState.origins[0].localStorage[0]).toEqual({ name: 'foo', value: 'bar' });
 });
+
+it('should set local storage in third-party context', async ({ contextFactory, server, browserName }) => {
+  it.fixme(browserName === 'webkit', 'look into setStorageBlockingPolicy');
+
+  const context = await contextFactory({
+    storageState: {
+      cookies: [],
+      origins: [
+        {
+          origin: server.CROSS_PROCESS_PREFIX,
+          localStorage: [{
+            name: 'name1',
+            value: 'value1'
+          }]
+        },
+      ]
+    }
+  });
+  const page = await context.newPage();
+  await page.goto(server.EMPTY_PAGE);
+  const frame = await attachFrame(page, 'frame1', server.CROSS_PROCESS_PREFIX + '/empty.html');
+
+  const localStorage = await frame.evaluate('window.localStorage');
+  expect(localStorage).toEqual({ name1: 'value1' });
+  await context.close();
+});
+
+it('should roundtrip local storage in third-party context', async ({ page, contextFactory, server, browserName }) => {
+  it.fixme(browserName === 'webkit', 'look into setStorageBlockingPolicy');
+
+  await page.goto(server.EMPTY_PAGE);
+  const frame = await attachFrame(page, 'frame1', server.CROSS_PROCESS_PREFIX + '/empty.html');
+  await frame.evaluate(() => window.localStorage.setItem('name1', 'value1'));
+  const storageState = await page.context().storageState();
+
+  const context2 = await contextFactory({ storageState });
+  const page2 = await context2.newPage();
+  await page2.goto(server.EMPTY_PAGE);
+  const frame2 = await attachFrame(page2, 'frame1', server.CROSS_PROCESS_PREFIX + '/empty.html');
+
+  const localStorage = await frame2.evaluate('window.localStorage');
+  expect(localStorage).toEqual({ name1: 'value1' });
+  await context2.close();
+});