diff --git a/Cargo.toml b/Cargo.toml
index 7c5687121e804..a35c8ee752b86 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -1745,6 +1745,16 @@ description = "Illustrates how FontAtlases are populated (used to optimize text
 category = "UI (User Interface)"
 wasm = true
 
+[[example]]
+name = "overflow_debug"
+path = "examples/ui/overflow_debug.rs"
+
+[package.metadata.example.overflow_debug]
+name = "Overflow and Clipping Debug"
+description = "An example to debug overflow and clipping behavior"
+category = "UI (User Interface)"
+wasm = true
+
 [[example]]
 name = "relative_cursor_position"
 path = "examples/ui/relative_cursor_position.rs"
diff --git a/examples/README.md b/examples/README.md
index 92f6e07d0640b..f42f6620bd0b8 100644
--- a/examples/README.md
+++ b/examples/README.md
@@ -331,6 +331,7 @@ Example | Description
 [Button](../examples/ui/button.rs) | Illustrates creating and updating a button
 [Flex Layout](../examples/ui/flex_layout.rs) | Demonstrates how the AlignItems and JustifyContent properties can be composed to layout nodes and position text
 [Font Atlas Debug](../examples/ui/font_atlas_debug.rs) | Illustrates how FontAtlases are populated (used to optimize text rendering internally)
+[Overflow and Clipping Debug](../examples/ui/overflow_debug.rs) | An example to debug overflow and clipping behavior
 [Relative Cursor Position](../examples/ui/relative_cursor_position.rs) | Showcases the RelativeCursorPosition component
 [Text](../examples/ui/text.rs) | Illustrates creating and updating text
 [Text Debug](../examples/ui/text_debug.rs) | An example for debugging text layout
diff --git a/examples/ui/overflow_debug.rs b/examples/ui/overflow_debug.rs
new file mode 100644
index 0000000000000..14e3e0d1f305c
--- /dev/null
+++ b/examples/ui/overflow_debug.rs
@@ -0,0 +1,303 @@
+//! Tests how different transforms behave when clipped with `Overflow::Hidden`
+use bevy::prelude::*;
+use std::f32::consts::{FRAC_PI_2, PI, TAU};
+
+const CONTAINER_SIZE: f32 = 150.0;
+const HALF_CONTAINER_SIZE: f32 = CONTAINER_SIZE / 2.0;
+const LOOP_LENGTH: f32 = 4.0;
+
+fn main() {
+    App::new()
+        .add_plugins(DefaultPlugins)
+        // TODO: Remove once #8144 is fixed
+        .insert_resource(GizmoConfig {
+            enabled: false,
+            ..default()
+        })
+        .insert_resource(AnimationState {
+            playing: false,
+            paused_at: 0.0,
+            paused_total: 0.0,
+            t: 0.0,
+        })
+        .add_systems(Startup, setup)
+        .add_systems(
+            Update,
+            (
+                toggle_overflow,
+                next_container_size,
+                update_transform::<Move>,
+                update_transform::<Scale>,
+                update_transform::<Rotate>,
+                update_animation,
+            ),
+        )
+        .run();
+}
+
+#[derive(Resource)]
+struct AnimationState {
+    playing: bool,
+    paused_at: f32,
+    paused_total: f32,
+    t: f32,
+}
+
+#[derive(Component)]
+struct Container(u8);
+
+trait UpdateTransform {
+    fn update(&self, t: f32, transform: &mut Transform);
+}
+
+#[derive(Component)]
+struct Move;
+
+impl UpdateTransform for Move {
+    fn update(&self, t: f32, transform: &mut Transform) {
+        transform.translation.x = (t * TAU - FRAC_PI_2).sin() * HALF_CONTAINER_SIZE;
+        transform.translation.y = -(t * TAU - FRAC_PI_2).cos() * HALF_CONTAINER_SIZE;
+    }
+}
+
+#[derive(Component)]
+struct Scale;
+
+impl UpdateTransform for Scale {
+    fn update(&self, t: f32, transform: &mut Transform) {
+        transform.scale.x = 1.0 + 0.5 * (t * TAU).cos().max(0.0);
+        transform.scale.y = 1.0 + 0.5 * (t * TAU + PI).cos().max(0.0);
+    }
+}
+
+#[derive(Component)]
+struct Rotate;
+
+impl UpdateTransform for Rotate {
+    fn update(&self, t: f32, transform: &mut Transform) {
+        transform.rotation = Quat::from_axis_angle(Vec3::Z, ((t * TAU).cos() * 45.0).to_radians());
+    }
+}
+
+fn setup(mut commands: Commands, asset_server: Res<AssetServer>) {
+    // Camera
+    commands.spawn(Camera2dBundle::default());
+
+    commands
+        .spawn(NodeBundle {
+            style: Style {
+                size: Size::width(Val::Percent(100.)),
+                flex_direction: FlexDirection::Column,
+                ..default()
+            },
+            ..default()
+        })
+        .with_children(|parent| {
+            parent
+                .spawn(NodeBundle {
+                    style: Style {
+                        size: Size::height(Val::Px(32.)),
+                        align_items: AlignItems::Center,
+                        justify_content: JustifyContent::Center,
+                        ..default()
+                    },
+                    background_color: Color::DARK_GRAY.into(),
+                    ..default()
+                })
+                .with_children(|parent| {
+                    parent.spawn(TextBundle::from_section(
+                        vec![
+                            "Toggle Overflow (O)",
+                            "Next Container Size (S)",
+                            "Toggle Animation (space)",
+                        ]
+                        .join("  ·  "),
+                        TextStyle {
+                            font: asset_server.load("fonts/FiraSans-Bold.ttf"),
+                            font_size: 18.0,
+                            color: Color::WHITE,
+                        },
+                    ));
+                });
+
+            parent
+                .spawn(NodeBundle {
+                    style: Style {
+                        flex_grow: 1.,
+                        flex_direction: FlexDirection::Column,
+                        ..default()
+                    },
+                    ..default()
+                })
+                .with_children(|parent| {
+                    spawn_row(parent, |parent| {
+                        spawn_image(parent, &asset_server, Move);
+                        spawn_image(parent, &asset_server, Scale);
+                        spawn_image(parent, &asset_server, Rotate);
+                    });
+
+                    spawn_row(parent, |parent| {
+                        spawn_text(parent, &asset_server, Move);
+                        spawn_text(parent, &asset_server, Scale);
+                        spawn_text(parent, &asset_server, Rotate);
+                    });
+                });
+        });
+}
+
+fn spawn_row(parent: &mut ChildBuilder, spawn_children: impl FnOnce(&mut ChildBuilder)) {
+    parent
+        .spawn(NodeBundle {
+            style: Style {
+                size: Size::width(Val::Percent(50.)),
+                align_items: AlignItems::Center,
+                justify_content: JustifyContent::SpaceEvenly,
+                ..default()
+            },
+            ..default()
+        })
+        .with_children(spawn_children);
+}
+
+fn spawn_image(
+    parent: &mut ChildBuilder,
+    asset_server: &Res<AssetServer>,
+    update_transform: impl UpdateTransform + Component,
+) {
+    spawn_container(parent, update_transform, |parent| {
+        parent.spawn(ImageBundle {
+            image: UiImage::new(asset_server.load("branding/bevy_logo_dark_big.png")),
+            style: Style {
+                size: Size::height(Val::Px(100.)),
+                position_type: PositionType::Absolute,
+                top: Val::Px(-50.),
+                left: Val::Px(-200.),
+                ..default()
+            },
+            ..default()
+        });
+    });
+}
+
+fn spawn_text(
+    parent: &mut ChildBuilder,
+    asset_server: &Res<AssetServer>,
+    update_transform: impl UpdateTransform + Component,
+) {
+    spawn_container(parent, update_transform, |parent| {
+        parent.spawn(TextBundle::from_section(
+            "Bevy",
+            TextStyle {
+                font: asset_server.load("fonts/FiraSans-Bold.ttf"),
+                font_size: 120.0,
+                color: Color::WHITE,
+            },
+        ));
+    });
+}
+
+fn spawn_container(
+    parent: &mut ChildBuilder,
+    update_transform: impl UpdateTransform + Component,
+    spawn_children: impl FnOnce(&mut ChildBuilder),
+) {
+    let mut transform = Transform::default();
+
+    update_transform.update(0.0, &mut transform);
+
+    parent
+        .spawn((
+            NodeBundle {
+                style: Style {
+                    size: Size::new(Val::Px(CONTAINER_SIZE), Val::Px(CONTAINER_SIZE)),
+                    align_items: AlignItems::Center,
+                    justify_content: JustifyContent::Center,
+                    overflow: Overflow::Hidden,
+                    ..default()
+                },
+                background_color: Color::DARK_GRAY.into(),
+                ..default()
+            },
+            Container(0),
+        ))
+        .with_children(|parent| {
+            parent
+                .spawn((
+                    NodeBundle {
+                        style: Style {
+                            align_items: AlignItems::Center,
+                            justify_content: JustifyContent::Center,
+                            top: Val::Px(transform.translation.x),
+                            left: Val::Px(transform.translation.y),
+                            ..default()
+                        },
+                        transform,
+                        ..default()
+                    },
+                    update_transform,
+                ))
+                .with_children(spawn_children);
+        });
+}
+
+fn update_animation(
+    mut animation: ResMut<AnimationState>,
+    time: Res<Time>,
+    keys: Res<Input<KeyCode>>,
+) {
+    let time = time.elapsed_seconds();
+
+    if keys.just_pressed(KeyCode::Space) {
+        animation.playing = !animation.playing;
+
+        if !animation.playing {
+            animation.paused_at = time;
+        } else {
+            animation.paused_total += time - animation.paused_at;
+        }
+    }
+
+    if animation.playing {
+        animation.t = (time - animation.paused_total) % LOOP_LENGTH / LOOP_LENGTH;
+    }
+}
+
+fn update_transform<T: UpdateTransform + Component>(
+    animation: Res<AnimationState>,
+    mut containers: Query<(&mut Transform, &mut Style, &T)>,
+) {
+    for (mut transform, mut style, update_transform) in &mut containers {
+        update_transform.update(animation.t, &mut transform);
+
+        style.left = Val::Px(transform.translation.x);
+        style.top = Val::Px(transform.translation.y);
+    }
+}
+
+fn toggle_overflow(keys: Res<Input<KeyCode>>, mut containers: Query<&mut Style, With<Container>>) {
+    if keys.just_pressed(KeyCode::O) {
+        for mut style in &mut containers {
+            style.overflow = match style.overflow {
+                Overflow::Visible => Overflow::Hidden,
+                Overflow::Hidden => Overflow::Visible,
+            };
+        }
+    }
+}
+
+fn next_container_size(
+    keys: Res<Input<KeyCode>>,
+    mut containers: Query<(&mut Style, &mut Container)>,
+) {
+    if keys.just_pressed(KeyCode::S) {
+        for (mut style, mut container) in &mut containers {
+            container.0 = (container.0 + 1) % 3;
+
+            style.size = match container.0 {
+                1 => Size::new(Val::Px(CONTAINER_SIZE), Val::Px(30.)),
+                2 => Size::new(Val::Px(30.), Val::Px(CONTAINER_SIZE)),
+                _ => Size::new(Val::Px(CONTAINER_SIZE), Val::Px(CONTAINER_SIZE)),
+            };
+        }
+    }
+}