diff --git a/packages/playwright-test/src/testType.ts b/packages/playwright-test/src/testType.ts
index 623420c4d4..fd35892382 100644
--- a/packages/playwright-test/src/testType.ts
+++ b/packages/playwright-test/src/testType.ts
@@ -200,7 +200,7 @@ export class TestTypeImpl {
     suite._use.push({ fixtures, location });
   }
 
-  private async _step(location: Location, title: string, body: () => Promise<void>): Promise<void> {
+  private async _step<T>(location: Location, title: string, body: () => Promise<T>): Promise<T> {
     const testInfo = currentTestInfo();
     if (!testInfo)
       throw errorWithLocation(location, `test.step() can only be called from a test`);
@@ -212,8 +212,9 @@ export class TestTypeImpl {
       forceNoParent: false
     });
     try {
-      await body();
+      const result = await body();
       step.complete({});
+      return result;
     } catch (e) {
       step.complete({ error: serializeError(e) });
       throw e;
diff --git a/packages/playwright-test/types/test.d.ts b/packages/playwright-test/types/test.d.ts
index 5de024a9ce..b7ac91792a 100644
--- a/packages/playwright-test/types/test.d.ts
+++ b/packages/playwright-test/types/test.d.ts
@@ -2512,7 +2512,7 @@ export interface TestType<TestArgs extends KeyValue, WorkerArgs extends KeyValue
    * @param title Step name.
    * @param body Step body.
    */
-  step(title: string, body: () => Promise<any>): Promise<any>;
+  step<T>(title: string, body: () => Promise<T>): Promise<T>;
   /**
    * `expect` function can be used to create test assertions. Read
    * [expect library documentation](https://jestjs.io/docs/expect) for more details.
diff --git a/tests/playwright-test/test-step.spec.ts b/tests/playwright-test/test-step.spec.ts
index d9294e3864..9dc58e32c1 100644
--- a/tests/playwright-test/test-step.spec.ts
+++ b/tests/playwright-test/test-step.spec.ts
@@ -379,3 +379,25 @@ test('should report custom expect steps', async ({ runInlineTest }) => {
     },
   ]);
 });
+
+test('should return value from step', async ({ runInlineTest }) => {
+  const result = await runInlineTest({
+    'a.test.ts': `
+      const { test } = pwt;
+      test('steps with return values', async ({ page }) => {
+        const v1 = await test.step('my step', () => {
+          return 10;
+        });
+        console.log('v1 = ' + v1);
+        const v2 = await test.step('my step', async () => {
+          return new Promise(f => setTimeout(() => f(v1 + 10), 100));
+        });
+        console.log('v2 = ' + v2);
+      });
+    `
+  }, { reporter: '', workers: 1 });
+  expect(result.exitCode).toBe(0);
+  expect(result.passed).toBe(1);
+  expect(result.output).toContain('v1 = 10');
+  expect(result.output).toContain('v2 = 20');
+});
diff --git a/tests/playwright-test/types-2.spec.ts b/tests/playwright-test/types-2.spec.ts
index da5fa36986..597437426b 100644
--- a/tests/playwright-test/types-2.spec.ts
+++ b/tests/playwright-test/types-2.spec.ts
@@ -136,3 +136,26 @@ test('test.extend options should check types', async ({ runTSC }) => {
   });
   expect(result.exitCode).toBe(0);
 });
+
+test('step should inherit return type from its callback ', async ({ runTSC }) => {
+  const result = await runTSC({
+    'a.spec.ts': `
+      const { test } = pwt;
+      test('my test', async ({ }) => {
+        // @ts-expect-error
+        const bad1: string = await test.step('my step', () => {
+          return 10;
+        });
+        // @ts-expect-error
+        const bad2: string = await test.step('my step', async () => {
+          return 10;
+        });
+        const good: string = await test.step('my step', async () => {
+          return 'foo';
+        });
+        await test.step('my step', async () => { });
+      });
+    `
+  });
+  expect(result.exitCode).toBe(0);
+});
diff --git a/utils/generate_types/overrides-test.d.ts b/utils/generate_types/overrides-test.d.ts
index da33b45c12..286b0838dc 100644
--- a/utils/generate_types/overrides-test.d.ts
+++ b/utils/generate_types/overrides-test.d.ts
@@ -150,7 +150,7 @@ export interface TestType<TestArgs extends KeyValue, WorkerArgs extends KeyValue
   beforeAll(inner: (args: TestArgs & WorkerArgs, testInfo: TestInfo) => Promise<any> | any): void;
   afterAll(inner: (args: TestArgs & WorkerArgs, testInfo: TestInfo) => Promise<any> | any): void;
   use(fixtures: Fixtures<{}, {}, TestArgs, WorkerArgs>): void;
-  step(title: string, body: () => Promise<any>): Promise<any>;
+  step<T>(title: string, body: () => Promise<T>): Promise<T>;
   expect: Expect;
   extend<T extends KeyValue, W extends KeyValue = {}>(fixtures: Fixtures<T, W, TestArgs, WorkerArgs>): TestType<TestArgs & T, WorkerArgs & W>;
   info(): TestInfo;