diff --git a/projects/igniteui-angular/core/src/services/overlay/overlay.ts b/projects/igniteui-angular/core/src/services/overlay/overlay.ts
index 687d0aa143e..ee7bc91c916 100644
--- a/projects/igniteui-angular/core/src/services/overlay/overlay.ts
+++ b/projects/igniteui-angular/core/src/services/overlay/overlay.ts
@@ -5,7 +5,7 @@ import { filter, takeUntil } from 'rxjs/operators';
 
 import { fadeIn, fadeOut, IAnimationParams, scaleInHorLeft, scaleInHorRight, scaleInVerBottom, scaleInVerTop, scaleOutHorLeft, scaleOutHorRight, scaleOutVerBottom, scaleOutVerTop, slideInBottom, slideInTop, slideOutBottom, slideOutTop } from 'igniteui-angular/animations';
 import { PlatformUtil } from '../../core/utils';
-import { IgxOverlayOutletDirective } from './utilities';
+import { IgxOverlayOutletDirective, OverlaySizeRegistry } from './utilities';
 import { IgxAngularAnimationService } from '../animation/angular-animation-service';
 import { AnimationService } from '../animation/animation';
 import { AutoPositionStrategy } from './position/auto-position-strategy';
@@ -44,6 +44,7 @@ export class IgxOverlayService implements OnDestroy {
     private _zone = inject(NgZone);
     protected platformUtil = inject(PlatformUtil);
     private animationService = inject<AnimationService>(IgxAngularAnimationService);
+    private sizeRegistry = inject(OverlaySizeRegistry);
 
     /**
      * Emitted just before the overlay content starts to open.
@@ -331,11 +332,12 @@ export class IgxOverlayService implements OnDestroy {
         info.settings = eventArgs.settings;
         this._overlayInfos.push(info);
         info.hook = this.placeElementHook(info.elementRef.nativeElement);
-        const elementRect = info.elementRef.nativeElement.getBoundingClientRect();
-        info.initialSize = { width: elementRect.width, height: elementRect.height };
         // Get the size before moving the container into the overlay so that it does not forget about inherited styles.
         this.getComponentSize(info);
-        this.moveElementToOverlay(info);
+        this.setInitialSize(
+            info,
+            () => this.moveElementToOverlay(info)
+        );
         // Update the container size after moving if there is size.
         if (info.size) {
             info.elementRef.nativeElement.parentElement.style.setProperty('--ig-size', info.size);
@@ -1000,4 +1002,28 @@ export class IgxOverlayService implements OnDestroy {
             info.size = size;
         }
     }
+
+    /**
+     * Measures the element's initial size and controls *when* the element is moved into the overlay outlet.
+     *
+     * The elements inherit constraining parent styles, so
+     * for some of them (e.g., Tooltip, Snackbar) their pre-move size is incorrect.
+     * Those can register an override via `OverlaySizeRegistry` to measure **after** moving to get an accurate size.
+     *
+     * - **Default**: Measures in-place (current parent), then moves to the overlay.
+     *
+     * @param info OverlayInfo for the content being attached.
+     * @param moveToOverlay Moves the element into the overlay.
+     */
+    private setInitialSize(info: OverlayInfo, moveToOverlay: () => void): void {
+        const override = this.sizeRegistry.get(info);
+        if (override) {
+            override(info, moveToOverlay);
+            return;
+        }
+
+        const elementRect = info.elementRef.nativeElement.getBoundingClientRect();
+        info.initialSize = { width: elementRect.width, height: elementRect.height };
+        moveToOverlay();
+    }
 }
diff --git a/projects/igniteui-angular/core/src/services/overlay/utilities.ts b/projects/igniteui-angular/core/src/services/overlay/utilities.ts
index 13a954ce26d..38b45d8631b 100644
--- a/projects/igniteui-angular/core/src/services/overlay/utilities.ts
+++ b/projects/igniteui-angular/core/src/services/overlay/utilities.ts
@@ -1,10 +1,40 @@
 import { AnimationReferenceMetadata } from '@angular/animations';
-import { ComponentRef, Directive, ElementRef, inject, Injector, NgZone } from '@angular/core';
+import { ComponentRef, Directive, ElementRef, inject, Injectable, Injector, NgZone } from '@angular/core';
 import { CancelableBrowserEventArgs, CancelableEventArgs, cloneValue, IBaseEventArgs } from '../../core/utils';
 import { AnimationPlayer } from '../animation/animation';
 import { IPositionStrategy } from './position/IPositionStrategy';
 import { IScrollStrategy } from './scroll';
 
+type SetInitialSizeFn = (info: OverlayInfo, moveToOverlay: () => void) => void;
+
+/**
+ * Maps a host `HTMLElement` to a sizing strategy (`SetInitialSizeFn`).
+ *
+ * @hidden
+ * @internal
+ */
+
+@Injectable({ providedIn: 'root' })
+export class OverlaySizeRegistry {
+    private readonly map = new Map<HTMLElement, SetInitialSizeFn>();
+
+    public register(host: HTMLElement, fn: SetInitialSizeFn): void {
+        this.map.set(host, fn);
+    }
+
+    public clear(host: HTMLElement): void {
+        this.map.delete(host);
+    }
+
+    public get(info: OverlayInfo): SetInitialSizeFn | undefined {
+        if (!info.elementRef || !info.elementRef.nativeElement) {
+            return;
+        }
+
+        return this.map.get(info.elementRef.nativeElement);
+    }
+}
+
 /**
  * Mark an element as an igxOverlay outlet container.
  * Directive instance is exported as `overlay-outlet` to be assigned to templates variables:
diff --git a/projects/igniteui-angular/core/src/services/public_api.ts b/projects/igniteui-angular/core/src/services/public_api.ts
index 69ae76e9358..498bda162d6 100644
--- a/projects/igniteui-angular/core/src/services/public_api.ts
+++ b/projects/igniteui-angular/core/src/services/public_api.ts
@@ -9,7 +9,7 @@ export * from './overlay/scroll';
 export {
     AbsolutePosition, ConnectedFit, HorizontalAlignment, OffsetMode, OverlayAnimationEventArgs, OverlayCancelableEventArgs, OverlayClosingEventArgs,
     OverlayCreateSettings, OverlayEventArgs, OverlaySettings, Point, PositionSettings, RelativePosition, RelativePositionStrategy, Size, VerticalAlignment, Util,
-    IgxOverlayOutletDirective
+    IgxOverlayOutletDirective, OverlayInfo, OverlaySizeRegistry
 } from './overlay/utilities';
 export * from './transaction/base-transaction';
 export * from './transaction/hierarchical-transaction';
diff --git a/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.spec.ts b/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.spec.ts
index 1846182d6de..b35ed1c4fd0 100644
--- a/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.spec.ts
+++ b/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.spec.ts
@@ -2,7 +2,7 @@ import { DebugElement } from '@angular/core';
 import { fakeAsync, TestBed, tick, flush, waitForAsync, ComponentFixture } from '@angular/core/testing';
 import { By } from '@angular/platform-browser';
 import { NoopAnimationsModule } from '@angular/platform-browser/animations';
-import { IgxTooltipSingleTargetComponent, IgxTooltipMultipleTargetsComponent, IgxTooltipPlainStringComponent, IgxTooltipWithToggleActionComponent, IgxTooltipMultipleTooltipsComponent, IgxTooltipWithCloseButtonComponent, IgxTooltipWithNestedContentComponent, IgxTooltipNestedTooltipsComponent } from '../../../../test-utils/tooltip-components.spec';
+import { IgxTooltipSingleTargetComponent, IgxTooltipMultipleTargetsComponent, IgxTooltipPlainStringComponent, IgxTooltipWithToggleActionComponent, IgxTooltipMultipleTooltipsComponent, IgxTooltipWithCloseButtonComponent, IgxTooltipWithNestedContentComponent, IgxTooltipNestedTooltipsComponent, IgxTooltipSizeComponent } from '../../../../test-utils/tooltip-components.spec';
 import { UIInteractions } from '../../../../test-utils/ui-interactions.spec';
 import { HorizontalAlignment, VerticalAlignment, AutoPositionStrategy } from '../../../../core/src/services/public_api';
 import { IgxTooltipDirective } from './tooltip.directive';
@@ -30,7 +30,8 @@ describe('IgxTooltip', () => {
                 IgxTooltipWithToggleActionComponent,
                 IgxTooltipWithCloseButtonComponent,
                 IgxTooltipWithNestedContentComponent,
-                IgxTooltipNestedTooltipsComponent
+                IgxTooltipNestedTooltipsComponent,
+                IgxTooltipSizeComponent
             ]
         }).compileComponents();
         UIInteractions.clearOverlay();
@@ -996,6 +997,31 @@ describe('IgxTooltip', () => {
 
             expect(fix.componentInstance.toggleDir.collapsed).toBe(false);
         }));
+
+        it('correctly sizes the tooltip/overlay content when inside an element - issue #16458', fakeAsync(() => {
+            const fixture = TestBed.createComponent(IgxTooltipSizeComponent);
+            fixture.detectChanges();
+
+            fixture.componentInstance.target1.showTooltip();
+            fixture.componentInstance.target2.showTooltip();
+            fixture.componentInstance.target3.showTooltip();
+            flush();
+
+            const tooltip1Rect = fixture.componentInstance.tooltip1.element.getBoundingClientRect();
+            const tooltip2Rect = fixture.componentInstance.tooltip2.element.getBoundingClientRect();
+            const tooltip3Rect = fixture.componentInstance.tooltip3.element.getBoundingClientRect();
+
+            const tooltip1ParentRect = fixture.componentInstance.tooltip1.element.parentElement.getBoundingClientRect();
+            const tooltip2ParentRect = fixture.componentInstance.tooltip2.element.parentElement.getBoundingClientRect();
+            const tooltip3ParentRect = fixture.componentInstance.tooltip3.element.parentElement.getBoundingClientRect();
+
+            expect(tooltip1Rect.width).toEqual(tooltip1ParentRect.width);
+            expect(tooltip1Rect.height).toEqual(tooltip1ParentRect.height);
+            expect(tooltip2Rect.width).toEqual(tooltip2ParentRect.width);
+            expect(tooltip2Rect.height).toEqual(tooltip2ParentRect.height);
+            expect(tooltip3Rect.width).toEqual(tooltip3ParentRect.width);
+            expect(tooltip3Rect.height).toEqual(tooltip3ParentRect.height);
+        }));
     });
 
     describe('Tooltip Sticky with Close Button', () => {
diff --git a/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.ts b/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.ts
index 626dab2ad25..57950708227 100644
--- a/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.ts
+++ b/projects/igniteui-angular/directives/src/directives/tooltip/tooltip.directive.ts
@@ -3,8 +3,9 @@ import {
     OnDestroy, inject, DOCUMENT, HostListener,
     Renderer2,
     AfterViewInit,
+    OnInit,
 } from '@angular/core';
-import { OverlaySettings, PlatformUtil } from 'igniteui-angular/core';
+import { OverlayInfo, OverlaySettings, OverlaySizeRegistry, PlatformUtil } from 'igniteui-angular/core';
 import { IgxToggleDirective } from '../toggle/toggle.directive';
 import { IgxTooltipTargetDirective } from './tooltip-target.directive';
 import { Subject, takeUntil } from 'rxjs';
@@ -29,7 +30,7 @@ let NEXT_ID = 0;
     selector: '[igxTooltip]',
     standalone: true
 })
-export class IgxTooltipDirective extends IgxToggleDirective implements AfterViewInit, OnDestroy {
+export class IgxTooltipDirective extends IgxToggleDirective implements OnInit, AfterViewInit, OnDestroy {
     /**
      * @hidden
      */
@@ -119,6 +120,7 @@ export class IgxTooltipDirective extends IgxToggleDirective implements AfterView
     private _document = inject(DOCUMENT);
     private _renderer = inject(Renderer2);
     private _platformUtil = inject(PlatformUtil);
+    private _sizeRegistry = inject(OverlaySizeRegistry);
 
     /** @hidden */
     constructor() {
@@ -133,6 +135,12 @@ export class IgxTooltipDirective extends IgxToggleDirective implements AfterView
         });
     }
 
+    /** @hidden */
+    public override ngOnInit() {
+        super.ngOnInit();
+        this._sizeRegistry.register(this.element, this.setInitialSize);
+    }
+
     /** @hidden */
     public ngAfterViewInit(): void {
         if (this._platformUtil.isBrowser) {
@@ -151,6 +159,8 @@ export class IgxTooltipDirective extends IgxToggleDirective implements AfterView
         if (this.arrow) {
             this._removeArrow();
         }
+
+        this._sizeRegistry.clear(this.element);
     }
 
     /**
@@ -226,4 +236,14 @@ export class IgxTooltipDirective extends IgxToggleDirective implements AfterView
     private onDocumentTouchStart(event) {
         this.tooltipTarget?.onDocumentTouchStart(event);
     }
+
+    /**
+    * Measures **after** moving the element into the overlay outlet so that parent
+    * style constraints do not affect the initial size.
+    */
+    private setInitialSize = (info: OverlayInfo, moveToOverlay: () => void) => {
+        moveToOverlay();
+        const elementRect = info.elementRef.nativeElement.getBoundingClientRect();
+        info.initialSize = { width: elementRect.width, height: elementRect.height };
+    }
 }
diff --git a/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.spec.ts b/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.spec.ts
index d8cf22d0adb..01bdb10e8ea 100644
--- a/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.spec.ts
+++ b/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.spec.ts
@@ -14,7 +14,8 @@ describe('IgxSnackbar', () => {
             imports: [
                 NoopAnimationsModule,
                 SnackbarInitializeTestComponent,
-                SnackbarCustomContentComponent
+                SnackbarCustomContentComponent,
+                SnackbarSizeTestComponent
             ]
         }).compileComponents();
     }));
@@ -183,6 +184,28 @@ describe('IgxSnackbar', () => {
         expect(customPositionSettings.openAnimation.options.params).toEqual({duration: '1000ms'});
         expect(customPositionSettings.minSize).toEqual({height: 100, width: 100});
     });
+
+    it('correctly sizes the snackbar/overlay content when inside an element - issue #16458', () => {
+        const fix = TestBed.createComponent(SnackbarSizeTestComponent);
+        fix.detectChanges();
+        snackbar = fix.componentInstance.snackbar;
+
+        const parentDivRect = snackbar.element.parentElement.getBoundingClientRect();
+        expect(parentDivRect.width).toBe(600);
+
+        snackbar.open();
+        fix.detectChanges();
+
+        const snackbarRect = snackbar.element.getBoundingClientRect();
+        const overlayContentRect = snackbar.element.parentElement.getBoundingClientRect();
+        const { marginLeft, marginRight, paddingLeft, paddingRight } = getComputedStyle(snackbar.element);
+        const horizontalMargins = parseFloat(marginLeft) + parseFloat(marginRight);
+        const horizontalPaddings = parseFloat(paddingLeft) + parseFloat(paddingRight);
+        const contentWidth = 200;
+
+        expect(snackbarRect.width).toEqual(contentWidth + horizontalPaddings);
+        expect(overlayContentRect.width).toEqual(snackbarRect.width + horizontalMargins);
+    });
 });
 
 describe('IgxSnackbar with custom content', () => {
@@ -273,3 +296,17 @@ class SnackbarCustomContentComponent {
     @ViewChild(IgxSnackbarComponent, { static: true }) public snackbar: IgxSnackbarComponent;
     public text: string;
 }
+
+@Component({
+    template: `
+    <div style="width: 600px;">
+        <igx-snackbar #snackbar>
+            <div style="width: 200px;">Snackbar Message</div>
+        </igx-snackbar>
+    </div>
+    `,
+    imports: [IgxSnackbarComponent]
+})
+class SnackbarSizeTestComponent {
+    @ViewChild(IgxSnackbarComponent, { static: true }) public snackbar: IgxSnackbarComponent;
+}
diff --git a/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.ts b/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.ts
index cd7b50468fe..37aeed85ab0 100644
--- a/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.ts
+++ b/projects/igniteui-angular/snackbar/src/snackbar/snackbar.component.ts
@@ -1,15 +1,19 @@
 import { useAnimation } from '@angular/animations';
 import {
     Component,
+    DOCUMENT,
     EventEmitter,
     HostBinding,
+    inject,
     Input,
+    OnDestroy,
     OnInit,
     Output
 } from '@angular/core';
 import { takeUntil } from 'rxjs/operators';
 import { ContainerPositionStrategy, GlobalPositionStrategy, HorizontalAlignment,
-    PositionSettings, VerticalAlignment } from 'igniteui-angular/core';
+    OverlayInfo,
+    OverlaySizeRegistry, PositionSettings, VerticalAlignment } from 'igniteui-angular/core';
 import { ToggleViewEventArgs, IgxButtonDirective, IgxNotificationsDirective } from 'igniteui-angular/directives';
 import { fadeIn, fadeOut } from 'igniteui-angular/animations';
 
@@ -36,8 +40,10 @@ let NEXT_ID = 0;
     templateUrl: 'snackbar.component.html',
     imports: [IgxButtonDirective]
 })
-export class IgxSnackbarComponent extends IgxNotificationsDirective
-    implements OnInit {
+export class IgxSnackbarComponent extends IgxNotificationsDirective implements OnInit, OnDestroy {
+    private _document = inject(DOCUMENT);
+    private _sizeRegistry = inject(OverlaySizeRegistry);
+
     /**
      * Sets/gets the `id` of the snackbar.
      * If not set, the `id` of the first snackbar component  will be `"igx-snackbar-0"`;
@@ -196,5 +202,29 @@ export class IgxSnackbarComponent extends IgxNotificationsDirective
             const closedEventArgs: ToggleViewEventArgs = { owner: this, id: this._overlayId };
             this.animationDone.emit(closedEventArgs);
         });
+
+        this._sizeRegistry.register(this.element, this.setInitialSize);
+    }
+
+    /**
+     * @hidden
+     */
+    public override ngOnDestroy() {
+        super.ngOnDestroy();
+        this._sizeRegistry.clear(this.element);
+    }
+
+    /**
+    * Measures **after** moving the element into the overlay outlet so that parent
+    * style constraints do not affect the initial size.
+    */
+    private setInitialSize = (info: OverlayInfo, moveToOverlay: () => void) => {
+        moveToOverlay();
+        const elementRect = info.elementRef.nativeElement.getBoundingClientRect();
+        // Needs full element width (margins included) to set proper width for the overlay container.
+        // Otherwise, the snackbar appears smaller and the text inside it might be misaligned.
+        const styles = this._document.defaultView.getComputedStyle(info.elementRef.nativeElement);
+        const horizontalMargins = parseFloat(styles.marginLeft) + parseFloat(styles.marginRight);
+        info.initialSize = { width: elementRect.width + horizontalMargins, height: elementRect.height };
     }
 }
diff --git a/projects/igniteui-angular/test-utils/tooltip-components.spec.ts b/projects/igniteui-angular/test-utils/tooltip-components.spec.ts
index 01f45faf660..d44881471ff 100644
--- a/projects/igniteui-angular/test-utils/tooltip-components.spec.ts
+++ b/projects/igniteui-angular/test-utils/tooltip-components.spec.ts
@@ -1,5 +1,6 @@
 import { Component, TemplateRef, ViewChild } from '@angular/core';
-import { IgxToggleActionDirective, IgxToggleDirective, IgxTooltipDirective, IgxTooltipTargetDirective, ITooltipHideEventArgs, ITooltipShowEventArgs } from 'igniteui-angular/directives';
+import { IgxButtonDirective, IgxIconButtonDirective, IgxToggleActionDirective, IgxToggleDirective, IgxTooltipDirective, IgxTooltipTargetDirective, ITooltipHideEventArgs, ITooltipShowEventArgs } from 'igniteui-angular/directives';
+import { IgxIconComponent } from 'igniteui-angular/icon';
 
 
 @Component({
@@ -161,8 +162,7 @@ export class IgxTooltipWithCloseButtonComponent {
       </div>
     </div>
     `,
-    imports: [IgxTooltipDirective, IgxTooltipTargetDirective],
-    standalone: true
+    imports: [IgxTooltipDirective, IgxTooltipTargetDirective]
 })
 export class IgxTooltipWithNestedContentComponent {
     @ViewChild(IgxTooltipDirective, { static: true }) public tooltip!: IgxTooltipDirective;
@@ -195,8 +195,7 @@ export class IgxTooltipWithNestedContentComponent {
       </div>
     </div>
     `,
-    imports: [IgxTooltipDirective, IgxTooltipTargetDirective],
-    standalone: true
+    imports: [IgxTooltipDirective, IgxTooltipTargetDirective]
 })
 export class IgxTooltipNestedTooltipsComponent {
     @ViewChild('targetLevel1', { read: IgxTooltipTargetDirective, static: true }) public targetLevel1: IgxTooltipTargetDirective;
@@ -207,3 +206,31 @@ export class IgxTooltipNestedTooltipsComponent {
     @ViewChild('tooltipLevel2', { read: IgxTooltipDirective, static: true }) public tooltipLevel2: IgxTooltipDirective;
     @ViewChild('tooltipLevel3', { read: IgxTooltipDirective, static: true }) public tooltipLevel3: IgxTooltipDirective;
 }
+
+@Component({
+    template: `
+    <div #target1 style="background: red; width: 20px; height: 20px;" [igxTooltipTarget]="tooltip1">
+        <div #tooltip1="tooltip" igxTooltip>{{ message }}</div>
+    </div>
+    <button #target2 igxIconButton="flat" [igxTooltipTarget]="tooltip2">
+        <igx-icon>palette</igx-icon>
+        <div #tooltip2="tooltip" igxTooltip>{{ message }}</div>
+    </button>
+    <button #target3 igxButton="flat" [igxTooltipTarget]="tooltip3">
+        Button
+        <div #tooltip3="tooltip" igxTooltip>{{ message }}</div>
+    </button>
+    `,
+    imports: [IgxTooltipDirective, IgxTooltipTargetDirective, IgxIconComponent, IgxIconButtonDirective, IgxButtonDirective]
+})
+export class IgxTooltipSizeComponent {
+    @ViewChild('target1', { read: IgxTooltipTargetDirective, static: true }) public target1: IgxTooltipTargetDirective;
+    @ViewChild('target2', { read: IgxTooltipTargetDirective, static: true }) public target2: IgxTooltipTargetDirective;
+    @ViewChild('target3', { read: IgxTooltipTargetDirective, static: true }) public target3: IgxTooltipTargetDirective;
+
+    @ViewChild('tooltip1', { read: IgxTooltipDirective, static: true }) public tooltip1: IgxTooltipDirective;
+    @ViewChild('tooltip2', { read: IgxTooltipDirective, static: true }) public tooltip2: IgxTooltipDirective;
+    @ViewChild('tooltip3', { read: IgxTooltipDirective, static: true }) public tooltip3: IgxTooltipDirective;
+
+    public message: string = 'Long tooltip message for testing purposes';
+}