diff --git a/dom/base/Document.cpp b/dom/base/Document.cpp
index 02cf6acb6720..42c6a3d7c2c3 100644
--- a/dom/base/Document.cpp
+++ b/dom/base/Document.cpp
@@ -15029,14 +15029,17 @@ void Document::HandleEscKey() {
     }
   }
   // Not all dialogs exist in the top layer, so despite already iterating
-  // through all top layer elements we also need to iterate over non-modal
-  // dialogs, as they may have a specified `closedby` value which may allow them
-  // to be closed via Escape key.
-  for (RefPtr<HTMLDialogElement> dialog : Reversed(mOpenDialogs)) {
+  // through all top layer elements we also need to check open dialogs that are
+  // _not_ open via the top-layer (showModal).
+  // The top-most dialog in mOpenDialogs may need to be closed.
+  if (RefPtr<HTMLDialogElement> dialog =
+          mOpenDialogs.SafeLastElement(nullptr)) {
     if (dialog->GetClosedBy() != HTMLDialogElement::ClosedBy::None) {
+      MOZ_ASSERT(StaticPrefs::dom_dialog_light_dismiss_enabled(),
+                 "Light Dismiss must have been enabled for GetClosedBy() "
+                 "returns != ClosedBy::None");
       const mozilla::dom::Optional<nsAString> returnValue;
       dialog->RequestClose(returnValue);
-      return;
     }
   }
 }
diff --git a/testing/web-platform/meta/html/semantics/interactive-elements/the-dialog-element/dialog-closedby-show-stacked.html.ini b/testing/web-platform/meta/html/semantics/interactive-elements/the-dialog-element/dialog-closedby-show-stacked.html.ini
new file mode 100644
index 000000000000..9a51e2aed4e4
--- /dev/null
+++ b/testing/web-platform/meta/html/semantics/interactive-elements/the-dialog-element/dialog-closedby-show-stacked.html.ini
@@ -0,0 +1 @@
+prefs: [dom.closewatcher.enabled: true, dom.dialog.light-dismiss.enabled: true]
diff --git a/testing/web-platform/tests/html/semantics/interactive-elements/the-dialog-element/dialog-closedby-show-stacked.html b/testing/web-platform/tests/html/semantics/interactive-elements/the-dialog-element/dialog-closedby-show-stacked.html
new file mode 100644
index 000000000000..30021a79be3b
--- /dev/null
+++ b/testing/web-platform/tests/html/semantics/interactive-elements/the-dialog-element/dialog-closedby-show-stacked.html
@@ -0,0 +1,127 @@
+<!DOCTYPE html>
+<meta charset="utf-8">
+<link rel="author" href="mailto:wpt@keithcirkel.co.uk">
+<link rel=help href="https://html.spec.whatwg.org/multipage/interactive-elements.html#dialog-light-dismiss">
+<script src="/resources/testharness.js"></script>
+<script src="/resources/testharnessreport.js"></script>
+<script src="/resources/testdriver.js"></script>
+<script src="/resources/testdriver-actions.js"></script>
+<script src="/resources/testdriver-vendor.js"></script>
+<script src="../../popovers/resources/popover-utils.js"></script>
+
+<button id="outside">Outside</button>
+<dialog id=outer closedby="closerequest">
+  <dialog id=inner>
+  </dialog>
+</dialog>
+
+<script>
+function awaitEvent(el, type, signal) {
+  const {promise, resolve} = Promise.withResolvers();
+  el.addEventListener(type, resolve, { once: true, signal });
+  return promise
+}
+
+promise_test(async (t) => {
+  inner.setAttribute('closedby', 'none');
+  outer.show();
+  // Need to ensure that CloseWatcher does not collapse
+  // both of these shows into a single CloseWatcher group.
+  await test_driver.bless();
+  inner.show();
+  assert_true(inner.open, "The inner dialog is open");
+  assert_true(outer.open, "The outer dialog is open");
+
+  let cancelFired = false;
+  inner.addEventListener('cancel', () => cancelFired = true, t.get_signal());
+  outer.addEventListener('cancel', () => cancelFired = true, t.get_signal());
+
+  const ESC = '\uE00C';
+  await test_driver.send_keys(document.documentElement,ESC);
+
+  assert_false(cancelFired, "The cancel event was not fired");
+  assert_true(inner.open, "The inner dialog is still open");
+  assert_true(outer.open, "The outer dialog is still open");
+},'With an inner closedby=none, the outer & inner dialogs stays open when Esc is pressed');
+
+promise_test(async (t) => {
+  inner.setAttribute('closedby', 'none');
+  outer.show();
+  // Need to ensure that CloseWatcher does not collapse
+  // both of these shows into a single CloseWatcher group.
+  await test_driver.bless();
+  inner.show();
+  assert_true(inner.open, "The inner dialog is open");
+  assert_true(outer.open, "The outer dialog is open");
+
+  let cancelFired = false;
+  inner.addEventListener('cancel', () => cancelFired = true, t.get_signal());
+  outer.addEventListener('cancel', () => cancelFired = true, t.get_signal());
+
+  // Try clicking outside
+  await clickOn(outside);
+
+  assert_false(cancelFired, "The cancel event was not fired");
+  assert_true(inner.open, "The inner dialog is open");
+  assert_true(outer.open, "The outer dialog is open");
+},'With an inner closedby=none, the outer & inner dialogs stays open when clicked outside');
+
+promise_test(async (t) => {
+  inner.setAttribute('closedby', 'any');
+  outer.show();
+  // Need to ensure that CloseWatcher does not collapse
+  // both of these shows into a single CloseWatcher group.
+  await test_driver.bless();
+  inner.show();
+  assert_true(inner.open, "The inner dialog is open");
+  assert_true(outer.open, "The outer dialog is open");
+
+  let innerCancelled = false;
+  let outerCancelled = false;
+  inner.addEventListener('cancel', () => innerCancelled = true, t.get_signal());
+  outer.addEventListener('cancel', () => outerCancelled = true, t.get_signal());
+
+  let innerClosed = awaitEvent(inner, 'close', t.get_signal());
+
+  // Try clicking outside
+  const ESC = '\uE00C';
+  await test_driver.send_keys(document.documentElement,ESC);
+
+  await innerClosed;
+
+  assert_false(outerCancelled, "The outer cancel event was not fired");
+  assert_true(innerCancelled, "The inner cancel event was fired");
+
+  assert_false(inner.open, "The inner dialog is NOT open");
+  assert_true(outer.open, "The outer dialog is open");
+},'With an inner closedby=any, the outer dialog stays open but the inner dialogs should close, when Esc is pressed');
+
+promise_test(async (t) => {
+  inner.setAttribute('closedby', 'any');
+  outer.show();
+  // Need to ensure that CloseWatcher does not collapse
+  // both of these shows into a single CloseWatcher group.
+  await test_driver.bless();
+  inner.show();
+  assert_true(inner.open, "The inner dialog is open");
+  assert_true(outer.open, "The outer dialog is open");
+
+  let innerCancelled = false;
+  let outerCancelled = false;
+  inner.addEventListener('cancel', () => innerCancelled = true, t.get_signal());
+  outer.addEventListener('cancel', () => outerCancelled = true, t.get_signal());
+
+  let innerClosed = awaitEvent(inner, 'close', t.get_signal());
+
+  // Try clicking outside
+  await clickOn(outside);
+
+  await innerClosed;
+
+  assert_false(outerCancelled, "The outer cancel event was not fired");
+  assert_true(innerCancelled, "The inner cancel event was fired");
+
+  assert_false(inner.open, "The inner dialog is NOT open");
+  assert_true(outer.open, "The outer dialog is open");
+},'With an inner closedby=any, the outer dialog stays open but the inner dialogs should close, when clicked outside');
+</script>
