diff --git a/packages/playwright-core/src/server/injected/injectedScript.ts b/packages/playwright-core/src/server/injected/injectedScript.ts
index 6bd763d43e..6013f35567 100644
--- a/packages/playwright-core/src/server/injected/injectedScript.ts
+++ b/packages/playwright-core/src/server/injected/injectedScript.ts
@@ -1133,7 +1133,7 @@ export class InjectedScript {
       bubbles: true,
       cancelable: true,
       detail: callId,
-      composed: false,
+      composed: true,
     });
     for (const element of markedElements)
       element.dispatchEvent(customEvent);
diff --git a/packages/playwright-core/src/server/trace/recorder/snapshotter.ts b/packages/playwright-core/src/server/trace/recorder/snapshotter.ts
index 2db04b1278..2340f55a26 100644
--- a/packages/playwright-core/src/server/trace/recorder/snapshotter.ts
+++ b/packages/playwright-core/src/server/trace/recorder/snapshotter.ts
@@ -114,7 +114,7 @@ export class Snapshotter {
         bubbles: true,
         cancelable: true,
         detail: callId,
-        composed: false,
+        composed: true,
       });
       element.dispatchEvent(customEvent);
     }, callId);
diff --git a/packages/playwright-core/src/server/trace/recorder/snapshotterInjected.ts b/packages/playwright-core/src/server/trace/recorder/snapshotterInjected.ts
index ae8e3de5d5..ee503eb043 100644
--- a/packages/playwright-core/src/server/trace/recorder/snapshotterInjected.ts
+++ b/packages/playwright-core/src/server/trace/recorder/snapshotterInjected.ts
@@ -136,7 +136,7 @@ export function frameSnapshotStreamer(snapshotStreamer: string) {
         if (!event.detail)
           return;
         const callId = event.detail as string;
-        (event.target as any).__playwright_target__ = callId;
+        (event.composedPath()[0] as any).__playwright_target__ = callId;
       });
     }
 
diff --git a/packages/trace-viewer/src/snapshotRenderer.ts b/packages/trace-viewer/src/snapshotRenderer.ts
index 0dc67da521..dcea1d9670 100644
--- a/packages/trace-viewer/src/snapshotRenderer.ts
+++ b/packages/trace-viewer/src/snapshotRenderer.ts
@@ -104,9 +104,7 @@ export class SnapshotRenderer {
     const prefix = snapshot.doctype ? `<!DOCTYPE ${snapshot.doctype}>` : '';
     html = prefix + [
       '<style>*,*::before,*::after { visibility: hidden }</style>',
-      `<style>*[__playwright_target__="${this.snapshotName}"] { outline: 2px solid #006ab1 !important; background-color: #6fa8dc7f !important; }</style>`,
-      `<style>*[__playwright_target__="${this._callId}"] { outline: 2px solid #006ab1 !important; background-color: #6fa8dc7f !important; }</style>`,
-      `<script>${snapshotScript()}</script>`
+      `<script>${snapshotScript(this._callId, this.snapshotName)}</script>`
     ].join('') + html;
 
     return { html, pageId: snapshot.pageId, frameId: snapshot.frameId, index: this._index };
@@ -195,8 +193,8 @@ function snapshotNodes(snapshot: FrameSnapshot): NodeSnapshot[] {
   return (snapshot as any)._nodes;
 }
 
-function snapshotScript() {
-  function applyPlaywrightAttributes(unwrapPopoutUrl: (url: string) => string) {
+function snapshotScript(...targetIds: (string | undefined)[]) {
+  function applyPlaywrightAttributes(unwrapPopoutUrl: (url: string) => string, ...targetIds: (string | undefined)[]) {
     const scrollTops: Element[] = [];
     const scrollLefts: Element[] = [];
 
@@ -220,6 +218,14 @@ function snapshotScript() {
         element.removeAttribute('__playwright_selected_');
       }
 
+      for (const targetId of targetIds) {
+        for (const target of root.querySelectorAll(`[__playwright_target__="${targetId}"]`)) {
+          const style = (target as HTMLElement).style;
+          style.outline = '2px solid #006ab1';
+          style.backgroundColor = '#6fa8dc7f';
+        }
+      }
+
       for (const iframe of root.querySelectorAll('iframe, frame')) {
         const src = iframe.getAttribute('__playwright_src__');
         if (!src) {
@@ -303,7 +309,7 @@ function snapshotScript() {
     window.addEventListener('DOMContentLoaded', onDOMContentLoaded);
   }
 
-  return `\n(${applyPlaywrightAttributes.toString()})(${unwrapPopoutUrl.toString()})`;
+  return `\n(${applyPlaywrightAttributes.toString()})(${unwrapPopoutUrl.toString()}${targetIds.map(id => `, "${id}"`).join('')})`;
 }
 
 
diff --git a/tests/library/trace-viewer.spec.ts b/tests/library/trace-viewer.spec.ts
index 4f37c2d930..3614505a74 100644
--- a/tests/library/trace-viewer.spec.ts
+++ b/tests/library/trace-viewer.spec.ts
@@ -630,6 +630,20 @@ test('should highlight target elements', async ({ page, runAndTrace, browserName
   await expect.poll(() => highlightedDivs(frameExpect2)).toEqual(['multi', 'multi']);
 });
 
+test('should highlight target element in shadow dom', async ({ page, server, runAndTrace }) => {
+  const traceViewer = await runAndTrace(async () => {
+    await page.goto(server.PREFIX + '/shadow.html');
+    await page.locator('button').click();
+    await expect(page.locator('h1')).toHaveText('Hellow Shadow DOM v1');
+  });
+
+  const framePageClick = await traceViewer.snapshotFrame('locator.click');
+  await expect(framePageClick.locator('button')).toHaveCSS('background-color', 'rgba(111, 168, 220, 0.498)');
+
+  const frameExpect = await traceViewer.snapshotFrame('expect.toHaveText');
+  await expect(frameExpect.locator('h1')).toHaveCSS('background-color', 'rgba(111, 168, 220, 0.498)');
+});
+
 test('should show action source', async ({ showTraceViewer }) => {
   const traceViewer = await showTraceViewer([traceFile]);
   await traceViewer.selectAction('locator.click');