diff --git a/change/react-native-windows-57a959a1-829b-488a-9101-1780b1e847cd.json b/change/react-native-windows-57a959a1-829b-488a-9101-1780b1e847cd.json
new file mode 100644
index 00000000000..5996d6b2666
--- /dev/null
+++ b/change/react-native-windows-57a959a1-829b-488a-9101-1780b1e847cd.json
@@ -0,0 +1,7 @@
+{
+  "type": "prerelease",
+  "comment": "fix: Fix tooltip positioning for ContentIsland and dismiss on scroll",
+  "packageName": "react-native-windows",
+  "email": "nitchaudhary@microsoft.com",
+  "dependentChangeType": "patch"
+}
diff --git a/vnext/Microsoft.ReactNative/Fabric/Composition/ScrollViewComponentView.cpp b/vnext/Microsoft.ReactNative/Fabric/Composition/ScrollViewComponentView.cpp
index ca5b83decdc..048bb785702 100644
--- a/vnext/Microsoft.ReactNative/Fabric/Composition/ScrollViewComponentView.cpp
+++ b/vnext/Microsoft.ReactNative/Fabric/Composition/ScrollViewComponentView.cpp
@@ -21,6 +21,7 @@
 #include <unicode.h>
 #include "JSValueReader.h"
 #include "RootComponentView.h"
+#include "TooltipService.h"
 
 namespace winrt::Microsoft::ReactNative::Composition::implementation {
 
@@ -1300,6 +1301,11 @@ winrt::Microsoft::ReactNative::Composition::Experimental::IVisual ScrollViewComp
       [this](
           winrt::IInspectable const & /*sender*/,
           winrt::Microsoft::ReactNative::Composition::Experimental::IScrollPositionChangedArgs const &args) {
+        // Dismiss any visible tooltips when scroll position changes, since
+        // scrolling moves child components and the tooltip would be left at
+        // the wrong position on screen.
+        TooltipService::GetCurrent(m_reactContext.Properties())->DismissAllTooltips();
+
         auto now = std::chrono::steady_clock::now();
         auto elapsed = std::chrono::duration_cast<std::chrono::duration<double>>(now - m_lastScrollEventTime).count();
 
diff --git a/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.cpp b/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.cpp
index e65dac0061a..d1ad65e845c 100644
--- a/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.cpp
+++ b/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.cpp
@@ -161,6 +161,45 @@ void RegisterTooltipWndClass() noexcept {
   registered = true;
 }
 
+// Clamp tooltip position so it stays within the nearest monitor's work area.
+// Flips the tooltip below the cursor if it would go above the work area.
+void ClampTooltipToMonitor(
+    POINT cursorScreenPt,
+    int tooltipWidth,
+    int tooltipHeight,
+    float scaleFactor,
+    int &x,
+    int &y) noexcept {
+  HMONITOR hMonitor = MonitorFromPoint(cursorScreenPt, MONITOR_DEFAULTTONEAREST);
+  if (!hMonitor)
+    return;
+
+  MONITORINFO mi = {};
+  mi.cbSize = sizeof(mi);
+  if (!GetMonitorInfo(hMonitor, &mi))
+    return;
+
+  const RECT &workArea = mi.rcWork;
+
+  // Clamp horizontally
+  if (x + tooltipWidth > workArea.right) {
+    x = workArea.right - tooltipWidth;
+  }
+  if (x < workArea.left) {
+    x = workArea.left;
+  }
+
+  // If tooltip goes above the work area, flip it below the cursor
+  if (y < workArea.top) {
+    y = static_cast<int>(cursorScreenPt.y + (toolTipPlacementMargin * scaleFactor));
+  }
+
+  // If tooltip goes below the work area (after flip), clamp to bottom
+  if (y + tooltipHeight > workArea.bottom) {
+    y = workArea.bottom - tooltipHeight;
+  }
+}
+
 TooltipTracker::TooltipTracker(
     const winrt::Microsoft::ReactNative::ComponentView &view,
     const winrt::Microsoft::ReactNative::ReactPropertyBag &properties,
@@ -227,6 +266,11 @@ void TooltipTracker::OnPointerExited(
   DestroyTooltip();
 }
 
+void TooltipTracker::DismissActiveTooltip() noexcept {
+  DestroyTimer();
+  DestroyTooltip();
+}
+
 void TooltipTracker::OnUnmounted(
     const winrt::Windows::Foundation::IInspectable &,
     const winrt::Microsoft::ReactNative::ComponentView &) noexcept {
@@ -267,8 +311,15 @@ void TooltipTracker::ShowTooltip(const winrt::Microsoft::ReactNative::ComponentV
           static_cast<int>((tm.width + tooltipHorizontalPadding + tooltipHorizontalPadding) * scaleFactor);
       tooltipData->height = static_cast<int>((tm.height + tooltipTopPadding + tooltipBottomPadding) * scaleFactor);
 
-      POINT pt = {static_cast<LONG>(m_pos.X * scaleFactor), static_cast<LONG>(m_pos.Y * scaleFactor)};
-      ClientToScreen(parentHwnd, &pt);
+      // Convert island-local DIP coordinates to screen pixel coordinates.
+      // Use LocalToScreen which properly handles both ContentIsland and HWND hosting.
+      auto screenPt = selfView->LocalToScreen({m_pos.X, m_pos.Y});
+      POINT pt = {static_cast<LONG>(screenPt.X), static_cast<LONG>(screenPt.Y)};
+
+      // Calculate initial desired tooltip position and clamp to monitor work area
+      int tooltipX = pt.x - tooltipData->width / 2;
+      int tooltipY = static_cast<int>(pt.y - tooltipData->height - (toolTipPlacementMargin * scaleFactor));
+      ClampTooltipToMonitor(pt, tooltipData->width, tooltipData->height, scaleFactor, tooltipX, tooltipY);
 
       RegisterTooltipWndClass();
       HINSTANCE hInstance = GetModuleHandle(NULL);
@@ -276,8 +327,8 @@ void TooltipTracker::ShowTooltip(const winrt::Microsoft::ReactNative::ComponentV
           c_tooltipWindowClassName,
           L"Tooltip",
           WS_POPUP,
-          pt.x - tooltipData->width / 2,
-          static_cast<int>(pt.y - tooltipData->height - (toolTipPlacementMargin * scaleFactor)),
+          tooltipX,
+          tooltipY,
           tooltipData->width,
           tooltipData->height,
           parentHwnd,
@@ -326,6 +377,12 @@ void TooltipService::StopTracking(const winrt::Microsoft::ReactNative::Component
   }
 }
 
+void TooltipService::DismissAllTooltips() noexcept {
+  for (auto &tracker : m_trackers) {
+    tracker->DismissActiveTooltip();
+  }
+}
+
 static const ReactPropertyId<winrt::Microsoft::ReactNative::ReactNonAbiValue<std::shared_ptr<TooltipService>>>
     &TooltipServicePropertyId() noexcept {
   static const ReactPropertyId<winrt::Microsoft::ReactNative::ReactNonAbiValue<std::shared_ptr<TooltipService>>> prop{
diff --git a/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.h b/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.h
index b3090061a54..a39caf32fdb 100644
--- a/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.h
+++ b/vnext/Microsoft.ReactNative/Fabric/Composition/TooltipService.h
@@ -35,6 +35,7 @@ struct TooltipTracker {
       const winrt::Microsoft::ReactNative::ComponentView &) noexcept;
 
   facebook::react::Tag Tag() const noexcept;
+  void DismissActiveTooltip() noexcept;
 
  private:
   void ShowTooltip(const winrt::Microsoft::ReactNative::ComponentView &view) noexcept;
@@ -53,6 +54,7 @@ struct TooltipService {
   TooltipService(const winrt::Microsoft::ReactNative::ReactPropertyBag &properties);
   void StartTracking(const winrt::Microsoft::ReactNative::ComponentView &view) noexcept;
   void StopTracking(const winrt::Microsoft::ReactNative::ComponentView &view) noexcept;
+  void DismissAllTooltips() noexcept;
 
   static std::shared_ptr<TooltipService> GetCurrent(
       const winrt::Microsoft::ReactNative::ReactPropertyBag &properties) noexcept;