diff --git a/packages/react-native/ReactCommon/react/renderer/core/LayoutableShadowNode.cpp b/packages/react-native/ReactCommon/react/renderer/core/LayoutableShadowNode.cpp
index 86e78064cb6..565c1a2e0f5 100644
--- a/packages/react-native/ReactCommon/react/renderer/core/LayoutableShadowNode.cpp
+++ b/packages/react-native/ReactCommon/react/renderer/core/LayoutableShadowNode.cpp
@@ -261,15 +261,22 @@ ShadowNode::Shared LayoutableShadowNode::findNodeAtPoint(
     return nullptr;
   }
 
+  auto layoutMetrics = layoutableShadowNode->getLayoutMetrics();
   auto transform = layoutableShadowNode->getTransform();
-  auto frame = layoutableShadowNode->getLayoutMetrics().frame;
-  auto transformedFrame = frame * transform;
+  auto transformedFrame = layoutMetrics.frame * transform;
   auto isPointInside = transformedFrame.containsPoint(point);
 
-  if (!isPointInside) {
-    return nullptr;
-  } else if (!layoutableShadowNode->canChildrenBeTouchTarget()) {
+  if (isPointInside && !layoutableShadowNode->canChildrenBeTouchTarget()) {
     return node;
+  } else if (!isPointInside) {
+    auto overflowFrame =
+        insetBy(layoutMetrics.frame, layoutMetrics.overflowInset);
+    auto transformedOverflowFrame = overflowFrame * transform;
+    // If child overflows parent, the touch may be intercepted by the child
+    // only, so we should continue recursing.
+    if (!transformedOverflowFrame.containsPoint(point)) {
+      return nullptr;
+    }
   }
 
   if (Transform::isVerticalInversion(transform) ||
diff --git a/packages/react-native/ReactCommon/react/renderer/core/tests/FindNodeAtPointTest.cpp b/packages/react-native/ReactCommon/react/renderer/core/tests/FindNodeAtPointTest.cpp
index c167f86591a..0776acf8983 100644
--- a/packages/react-native/ReactCommon/react/renderer/core/tests/FindNodeAtPointTest.cpp
+++ b/packages/react-native/ReactCommon/react/renderer/core/tests/FindNodeAtPointTest.cpp
@@ -415,3 +415,37 @@ TEST(FindNodeAtPointTest, invertedList) {
           ->getTag(),
       2);
 }
+
+TEST(FindNodeAtPointTest, considersOverflowAreaOfTheParent) {
+  auto builder = simpleComponentBuilder();
+
+  auto element =
+      Element<ViewShadowNode>()
+          .tag(1)
+          .finalize([](ViewShadowNode& shadowNode) {
+            auto layoutMetrics = EmptyLayoutMetrics;
+            layoutMetrics.frame.size = {100, 100};
+            shadowNode.setLayoutMetrics(layoutMetrics);
+          })
+          .children({Element<ViewShadowNode>()
+                         .tag(2)
+                         .finalize([](ViewShadowNode& shadowNode) {
+                           auto layoutMetrics = EmptyLayoutMetrics;
+                           layoutMetrics.frame.size = {100, 0};
+                           layoutMetrics.overflowInset = {0, 0, 0, -100};
+
+                           shadowNode.setLayoutMetrics(layoutMetrics);
+                         })
+                         .children({Element<ViewShadowNode>().tag(3).finalize(
+                             [](ViewShadowNode& shadowNode) {
+                               auto layoutMetrics = EmptyLayoutMetrics;
+                               layoutMetrics.frame.size = {100, 100};
+                               shadowNode.setLayoutMetrics(layoutMetrics);
+                             })})});
+
+  auto parentShadowNode = builder.build(element);
+  EXPECT_EQ(
+      LayoutableShadowNode::findNodeAtPoint(parentShadowNode, {1, 99})
+          ->getTag(),
+      3);
+}