diff --git a/packages/playwright-test/src/reporters/junit.ts b/packages/playwright-test/src/reporters/junit.ts
index c1b9afabab..f8b5d39ce5 100644
--- a/packages/playwright-test/src/reporters/junit.ts
+++ b/packages/playwright-test/src/reporters/junit.ts
@@ -201,10 +201,14 @@ const discouragedXMLCharacters = /[\u0001-\u0008\u000b-\u000c\u000e-\u001f\u007f
 function escape(text: string, stripANSIControlSequences: boolean, isCharacterData: boolean): string {
   if (stripANSIControlSequences)
     text = stripAnsiEscapes(text);
-  const escapeRe = isCharacterData ? /[&<]/g : /[&"<>]/g;
-  text = text.replace(escapeRe, c => ({ '&': '&amp;', '"': '&quot;', '<': '&lt;', '>': '&gt;' }[c]!));
-  if (isCharacterData)
-    text = text.replace(/]]>/g, ']]&gt;');
+
+  if (isCharacterData) {
+    text = '<![CDATA[' + text.replace(/]]>/g, ']]&gt;') + ']]>';
+  } else {
+    const escapeRe = /[&"'<>]/g;
+    text = text.replace(escapeRe, c => ({ '&': '&amp;', '"': '&quot;', "'": '&apos;', '<': '&lt;', '>': '&gt;' }[c]!));
+  }
+
   text = text.replace(discouragedXMLCharacters, '');
   return text;
 }
diff --git a/tests/playwright-test/reporter-junit.spec.ts b/tests/playwright-test/reporter-junit.spec.ts
index 05b443f79a..cdc25142d1 100644
--- a/tests/playwright-test/reporter-junit.spec.ts
+++ b/tests/playwright-test/reporter-junit.spec.ts
@@ -141,6 +141,28 @@ test('should render stdout without ansi escapes', async ({ runInlineTest }) => {
   expect(result.exitCode).toBe(0);
 });
 
+test('should render, by default, character data as CDATA sections', async ({ runInlineTest }) => {
+  const result = await runInlineTest({
+    'playwright.config.ts': `
+      module.exports = {
+        reporter: [ ['junit'] ],
+      };
+    `,
+    'a.test.ts': `
+      const { test } = pwt;
+      test('one', async ({}) => {
+        process.stdout.write('Hello world &"\\'<>]]>');
+      });
+    `,
+  }, { reporter: '' });
+  const xml = parseXML(result.output);
+  const testcase = xml['testsuites']['testsuite'][0]['testcase'][0];
+  expect(testcase['system-out'].length).toBe(1);
+  expect(testcase['system-out'][0].trim()).toBe('Hello world &"\'<>]]&gt;');
+  expect(result.output).toContain(`<system-out>\n<![CDATA[Hello world &"\'<>]]&gt;]]>\n</system-out>`);
+  expect(result.exitCode).toBe(0);
+});
+
 test('should render skipped', async ({ runInlineTest }) => {
   const result = await runInlineTest({
     'a.test.js': `