diff --git a/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts b/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts
index 5cd51a82a0336..b624c4e44ae25 100644
--- a/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts
+++ b/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts
@@ -272,11 +272,11 @@ export class FrameDispatcher extends Dispatcher<Frame, channels.FrameChannel, Br
   }
 
   async highlight(params: channels.FrameHighlightParams, progress: Progress): Promise<void> {
-    return await progress.race(this._frame._page.highlightController.addHighlight(params.selector, { style: params.style }));
+    return await progress.race(this._frame._page.highlightController.addHighlight(params.selector, { style: params.style, frame: this._frame }));
   }
 
   async hideHighlight(params: channels.FrameHideHighlightParams, progress: Progress): Promise<void> {
-    return await progress.race(this._frame._page.highlightController.removeHighlight(params.selector));
+    return await progress.race(this._frame._page.highlightController.removeHighlight(params.selector, this._frame));
   }
 
   async expect(params: channels.FrameExpectParams, progress: Progress): Promise<channels.FrameExpectResult> {
diff --git a/packages/playwright-core/src/server/highlightController.ts b/packages/playwright-core/src/server/highlightController.ts
index 69b829bccdd0f..37358aaf76d24 100644
--- a/packages/playwright-core/src/server/highlightController.ts
+++ b/packages/playwright-core/src/server/highlightController.ts
@@ -14,18 +14,22 @@
  * limitations under the License.
  */
 
+import { Page } from './page';
+
 import type { FrameExecutionContext } from './dom';
-import type { Page } from './page';
+import type { Frame } from './frames';
 import type * as types from './types';
 import type { ParsedSelector } from '@isomorphic/selectorParser';
 
 export type HighlightOptions = {
   style?: string;
   anyFrame?: boolean; // Highlight in all the frames the selector could resolve to, instead of a single one.
+  frame?: Frame; // Resolve the selector relative to this frame, defaults to the main frame.
 };
 
 type HighlightEntry = HighlightOptions & {
   selector: string;
+  frame: Frame;
 };
 
 // Custom selector engines run in the main world, so highlights may live in either world.
@@ -39,20 +43,31 @@ export class HighlightController {
 
   constructor(page: Page) {
     this._page = page;
+    page.on(Page.Events.FrameDetached, frame => {
+      for (const [key, entry] of this._entries) {
+        if (entry.frame === frame)
+          this._entries.delete(key);
+      }
+    });
   }
 
   async addHighlight(selector: string, options: HighlightOptions = {}) {
     // Validate the selector upfront, so that the caller gets a synchronous error.
     this._page.browserContext.selectors().parseSelector(selector, false);
-    this._entries.set(selector, { selector, ...options });
+    const frame = options.frame ?? this._page.mainFrame();
+    this._entries.set(this._key(frame, selector), { selector, ...options, frame });
     await this._resolveNow();
   }
 
-  async removeHighlight(selector: string) {
-    this._entries.delete(selector);
+  async removeHighlight(selector: string, frame?: Frame) {
+    this._entries.delete(this._key(frame ?? this._page.mainFrame(), selector));
     await this._resolveNow();
   }
 
+  private _key(frame: Frame, selector: string) {
+    return frame.guid + ':' + selector;
+  }
+
   dispose() {
     if (this._resolutionTimer) {
       clearTimeout(this._resolutionTimer);
@@ -85,7 +100,7 @@ export class HighlightController {
 
     const perContext = new Map<FrameExecutionContext, { selector: ParsedSelector, cssStyle?: string }[]>();
     for (const entry of this._entries.values()) {
-      const results = await this._page.mainFrame().selectors.resolveFramesForSelector(entry.selector, { strict: false, anyFrame: entry.anyFrame }).catch(() => []);
+      const results = await entry.frame.selectors.resolveFramesForSelector(entry.selector, { strict: false, anyFrame: entry.anyFrame }).catch(() => []);
       for (const { frame, info } of results) {
         const context = frame.existingContext(info.world);
         if (!context)
diff --git a/tests/library/locator-highlight.spec.ts b/tests/library/locator-highlight.spec.ts
index 7b18e1bf20dd3..35f3c4fc0f406 100644
--- a/tests/library/locator-highlight.spec.ts
+++ b/tests/library/locator-highlight.spec.ts
@@ -151,3 +151,24 @@ test('highlight should work with a custom selector engine that runs in the main
 
   await context.close();
 });
+
+test('highlight should resolve relative to the frame of the locator', async ({ browser }) => {
+  const context = await browser.newContext();
+  const page = await context.newPage();
+  await page.setContent('<iframe name="frame" srcdoc="<button>foo</button>"></iframe><button>bar</button>');
+  const frame = page.frame('frame')!;
+
+  await page.locator('button').highlight();
+  await frame.locator('button').highlight();
+  await expect(page.locator('x-pw-highlight')).toHaveCount(1);
+  await expect(frame.locator('x-pw-highlight')).toHaveCount(1);
+
+  await page.locator('button').hideHighlight();
+  await expect(page.locator('x-pw-highlight')).toHaveCount(0);
+  await expect(frame.locator('x-pw-highlight')).toHaveCount(1);
+
+  await frame.locator('button').hideHighlight();
+  await expect(frame.locator('x-pw-highlight')).toHaveCount(0);
+
+  await context.close();
+});