diff --git a/packages/playwright-test/bundles/babel/src/babelBundleImpl.ts b/packages/playwright-test/bundles/babel/src/babelBundleImpl.ts
index 0f4ab2979b..2a9b246248 100644
--- a/packages/playwright-test/bundles/babel/src/babelBundleImpl.ts
+++ b/packages/playwright-test/bundles/babel/src/babelBundleImpl.ts
@@ -76,6 +76,7 @@ function babelTransformOptions(isTypeScript: boolean, isModule: boolean, plugins
   }
 
   return {
+    browserslistConfigFile: false,
     babelrc: false,
     configFile: false,
     assumptions: {
diff --git a/tests/playwright-test/babel.spec.ts b/tests/playwright-test/babel.spec.ts
index e99a790a41..bd932c7601 100644
--- a/tests/playwright-test/babel.spec.ts
+++ b/tests/playwright-test/babel.spec.ts
@@ -117,3 +117,17 @@ test('should work with |const| Type Parameters', async ({ runInlineTest }) => {
   expect(result.passed).toBe(1);
   expect(result.output).toContain('names: Alice, Bob, Eve');
 });
+
+test('should not read browserslist file', async ({ runInlineTest }) => {
+  test.info().annotations.push({ type: 'issue', description: 'https://github.com/microsoft/playwright/issues/23125' });
+  const result = await runInlineTest({
+    'package.json': `{ "browserslist": ["some invalid! value :)"] }`,
+    'one-success.spec.ts': `
+      import { test, expect } from '@playwright/test';
+      test('succeeds', () => {});
+    `
+  });
+  expect(result.exitCode).toBe(0);
+  expect(result.passed).toBe(1);
+  expect(result.failed).toBe(0);
+});