diff --git a/packages/playwright/src/transform/babelBundle.ts b/packages/playwright/src/transform/babelBundle.ts
index 20f75bdabd60d..6503009c16820 100644
--- a/packages/playwright/src/transform/babelBundle.ts
+++ b/packages/playwright/src/transform/babelBundle.ts
@@ -41,6 +41,24 @@ function babelTransformOptions(isTypeScript: boolean, isModule: boolean, plugins
 
   if (isTypeScript) {
     plugins.push(
+        // Strip "declare" class fields before these plugins run:
+        // - plugin-proposal-decorators
+        // - plugin-transform-class-properties
+        // - plugin-transform-private-methods
+        // See https://github.com/microsoft/playwright/issues/38586
+        [
+          (): PluginObj => ({
+            name: 'strip-declare-class-fields',
+            visitor: {
+              Class(path) {
+                for (const member of path.get('body.body')) {
+                  if (member.isClassProperty() && member.node.declare)
+                    member.remove();
+                }
+              }
+            }
+          })
+        ],
         [require('@babel/plugin-proposal-decorators'), { version: '2023-05' }],
         [require('@babel/plugin-transform-class-properties')],
         [require('@babel/plugin-transform-class-static-block')],
diff --git a/tests/playwright-test/babel.spec.ts b/tests/playwright-test/babel.spec.ts
index 0d7572de5ba1a..5843ab7384f7f 100644
--- a/tests/playwright-test/babel.spec.ts
+++ b/tests/playwright-test/babel.spec.ts
@@ -37,6 +37,37 @@ test('should succeed', async ({ runInlineTest }) => {
   expect(result.failed).toBe(0);
 });
 
+test('should support declare class fields', {
+  annotation: { type: 'issue', description: 'https://github.com/microsoft/playwright/issues/38586' },
+}, async ({ runInlineTest }) => {
+  const result = await runInlineTest({
+    'one-success.spec.ts': `
+      import { test, expect } from '@playwright/test';
+
+      class Base {
+        constructor(p1, p2) {
+          this.p1 = p1;
+          this.p2 = p2;
+        }
+      }
+
+      class Derived extends Base {
+        p1: string;
+        declare p2: string;
+      }
+
+      test('works', () => {
+        const d = new Derived('value1', 'value2');
+        expect(d.p1).toBe(undefined);
+        expect(d.p2).toBe('value2');
+      })
+    `
+  });
+  expect(result.exitCode).toBe(0);
+  expect(result.passed).toBe(1);
+  expect(result.failed).toBe(0);
+});
+
 test('should treat enums equally', async ({ runInlineTest }) => {
   const result = await runInlineTest({
     'component.tsx': `