diff --git a/change/react-native-windows-4a3033f2-c79a-4a04-859f-0c4647cf1b4d.json b/change/react-native-windows-4a3033f2-c79a-4a04-859f-0c4647cf1b4d.json
new file mode 100644
index 00000000000..5ef35d7d587
--- /dev/null
+++ b/change/react-native-windows-4a3033f2-c79a-4a04-859f-0c4647cf1b4d.json
@@ -0,0 +1,7 @@
+{
+  "type": "prerelease",
+  "comment": "Fix DPI scaling for debugging overlay highlights",
+  "packageName": "react-native-windows",
+  "email": "74712637+iamAbhi-916@users.noreply.github.com",
+  "dependentChangeType": "patch"
+}
diff --git a/vnext/Microsoft.ReactNative/Fabric/Composition/DebuggingOverlayComponentView.cpp b/vnext/Microsoft.ReactNative/Fabric/Composition/DebuggingOverlayComponentView.cpp
index 84452bf67aa..365ba85cdb4 100644
--- a/vnext/Microsoft.ReactNative/Fabric/Composition/DebuggingOverlayComponentView.cpp
+++ b/vnext/Microsoft.ReactNative/Fabric/Composition/DebuggingOverlayComponentView.cpp
@@ -86,10 +86,11 @@ void DebuggingOverlayComponentView::HandleCommand(
     if (auto root = rootComponentView()) {
       auto rootVisual = root->OuterVisual();
       auto brush = m_compContext.CreateColorBrush({204, 200, 230, 255});
+      float scaleFactor = m_layoutMetrics.pointScaleFactor;
       for (auto &element : elements) {
         auto overlayVisual = m_compContext.CreateSpriteVisual();
-        overlayVisual.Size({element.width, element.height});
-        overlayVisual.Offset({element.x, element.y, 0.0f});
+        overlayVisual.Size({element.width * scaleFactor, element.height * scaleFactor});
+        overlayVisual.Offset({element.x * scaleFactor, element.y * scaleFactor, 0.0f});
         overlayVisual.Brush(brush);
 
         rootVisual.InsertAt(overlayVisual, root->overlayIndex() + m_activeOverlays);