diff --git a/.changeset/fifty-toys-invite.md b/.changeset/fifty-toys-invite.md
new file mode 100644
index 000000000000..2dd19c3b0431
--- /dev/null
+++ b/.changeset/fifty-toys-invite.md
@@ -0,0 +1,5 @@
+---
+"svelte": patch
+---
+
+fix: never set custom element props as attributes inside templates
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
index 3e8fff654f6d..0548d7a1432c 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
@@ -2152,6 +2152,7 @@ export const template_visitors = {
 				}
 
 				if (
+					!is_custom_element &&
 					attribute.name !== 'autofocus' &&
 					(attribute.value === true || is_text_attribute(attribute))
 				) {
diff --git a/packages/svelte/tests/runtime-legacy/samples/attribute-custom-element-inheritance/_config.js b/packages/svelte/tests/runtime-legacy/samples/attribute-custom-element-inheritance/_config.js
index 0b5365a9f1f3..396048c91acc 100644
--- a/packages/svelte/tests/runtime-legacy/samples/attribute-custom-element-inheritance/_config.js
+++ b/packages/svelte/tests/runtime-legacy/samples/attribute-custom-element-inheritance/_config.js
@@ -1,8 +1,7 @@
 import { test } from '../../test';
 
 export default test({
-	skip: true, // TODO: needs fixing
-
+	mode: ['client'],
 	html: `
 		<my-custom-inheritance-element>Hello World!</my-custom-inheritance-element>
 	`