diff --git a/Rakefile b/Rakefile
index 32ea1d432..ab61ae9dd 100644
--- a/Rakefile
+++ b/Rakefile
@@ -26,6 +26,10 @@ task :translatable_benchmark do
   ruby "./performance/translatable_benchmark.rb"
 end
 
+task :slots_benchmark do
+  ruby "./performance/slots_benchmark.rb"
+end
+
 namespace :coverage do
   task :report do
     require "simplecov"
diff --git a/docs/CHANGELOG.md b/docs/CHANGELOG.md
index 833a12b53..f27a00118 100644
--- a/docs/CHANGELOG.md
+++ b/docs/CHANGELOG.md
@@ -10,6 +10,10 @@ nav_order: 5
 
 ## main
 
+* Ensure content is rendered correctly for forwarded slots.
+
+    *Cameron Dutro*
+
 ## 3.12.0
 
 * Remove offline links from resources.
diff --git a/lib/view_component/slot.rb b/lib/view_component/slot.rb
index 8cda09896..205437040 100644
--- a/lib/view_component/slot.rb
+++ b/lib/view_component/slot.rb
@@ -57,7 +57,17 @@ def to_s
 
           if defined?(@__vc_content_block)
             # render_in is faster than `parent.render`
-            @__vc_component_instance.render_in(view_context, &@__vc_content_block)
+            @__vc_component_instance.render_in(view_context) do |*args|
+              return @__vc_content_block.call(*args) if @__vc_content_block&.source_location.nil?
+
+              block_context = @__vc_content_block.binding.receiver
+
+              if block_context.class < ActionView::Base
+                block_context.capture(*args, &@__vc_content_block)
+              else
+                @__vc_content_block.call(*args)
+              end
+            end
           else
             @__vc_component_instance.render_in(view_context)
           end
diff --git a/performance/components/slots_wrapper_component.html.erb b/performance/components/slots_wrapper_component.html.erb
new file mode 100644
index 000000000..5484c2fd3
--- /dev/null
+++ b/performance/components/slots_wrapper_component.html.erb
@@ -0,0 +1,3 @@
+<%= render(Performance::SlotsComponent.new(name: "Fox Mulder")) do |component| %>
+  <% component.with_header(classes: "foo") { "Header" } %>
+<% end %>
diff --git a/performance/components/slots_wrapper_component.rb b/performance/components/slots_wrapper_component.rb
new file mode 100644
index 000000000..0509b61cc
--- /dev/null
+++ b/performance/components/slots_wrapper_component.rb
@@ -0,0 +1,4 @@
+# frozen_string_literal: true
+
+class Performance::SlotsWrapperComponent < ViewComponent::Base
+end
diff --git a/performance/slots_benchmark.rb b/performance/slots_benchmark.rb
new file mode 100644
index 000000000..9c5d8aec9
--- /dev/null
+++ b/performance/slots_benchmark.rb
@@ -0,0 +1,32 @@
+# frozen_string_literal: true
+
+# Run `bundle exec rake benchmark` to execute benchmark.
+# This is very much a work-in-progress. Please feel free to make/suggest improvements!
+
+require "benchmark/ips"
+
+# Configure Rails Environment
+ENV["RAILS_ENV"] = "production"
+require File.expand_path("../test/sandbox/config/environment.rb", __dir__)
+
+module Performance
+  require_relative "components/slots_component"
+  require_relative "components/slots_wrapper_component"
+end
+
+class BenchmarksController < ActionController::Base
+end
+
+BenchmarksController.view_paths = [File.expand_path("./views", __dir__)]
+controller_view = BenchmarksController.new.view_context
+
+Benchmark.ips do |x|
+  x.time = 10
+  x.warmup = 2
+
+  x.report("slots") do
+    controller_view.render(Performance::SlotsWrapperComponent.new(name: "Fox Mulder"))
+  end
+
+  x.compare!
+end
diff --git a/test/sandbox/app/components/forwarding_slot_wrapper_component.html.erb b/test/sandbox/app/components/forwarding_slot_wrapper_component.html.erb
new file mode 100644
index 000000000..4d1939750
--- /dev/null
+++ b/test/sandbox/app/components/forwarding_slot_wrapper_component.html.erb
@@ -0,0 +1,5 @@
+<%= render(ForwardingSlotComponent.new) do |panel| %>
+  <% panel.with_target_content do |header| %>
+    Target content
+  <% end %>
+<% end %>
diff --git a/test/sandbox/app/components/forwarding_slot_wrapper_component.rb b/test/sandbox/app/components/forwarding_slot_wrapper_component.rb
new file mode 100644
index 000000000..0f49999b8
--- /dev/null
+++ b/test/sandbox/app/components/forwarding_slot_wrapper_component.rb
@@ -0,0 +1,38 @@
+# frozen_string_literal: true
+
+class ForwardingSlotWrapperComponent < ViewComponent::Base
+end
+
+unless defined?(ForwardingSlotComponent)
+  class ForwardingSlotComponent < ViewComponent::Base
+    def initialize
+      @target = TargetSlotComponent.new
+    end
+
+    def with_target_content(&block)
+      @target.with_target_content(&block)
+    end
+
+    def before_render
+      content
+    end
+
+    def call
+      render(@target)
+    end
+  end
+
+  class TargetSlotComponent < ViewComponent::Base
+    renders_one :target_content, "TargetContentComponent"
+
+    def call
+      target_content
+    end
+  end
+
+  class TargetContentComponent < ViewComponent::Base
+    def call
+      content
+    end
+  end
+end
diff --git a/test/sandbox/test/slotable_test.rb b/test/sandbox/test/slotable_test.rb
index 6f3220ee6..164e6508d 100644
--- a/test/sandbox/test/slotable_test.rb
+++ b/test/sandbox/test/slotable_test.rb
@@ -758,4 +758,10 @@ def test_inline_html_escape_with_integer
       render_inline InlineIntegerComponent.new
     end
   end
+
+  def test_forwarded_slot_renders_correctly
+    render_inline(ForwardingSlotWrapperComponent.new)
+
+    assert_text "Target content", count: 1
+  end
 end