@@ -4720,7 +4720,10 @@ const _attrValueOf = (i) => {
  * @param {number} i the attribute
  * @returns {string} the value with its character references resolved
  */
-const _attrValueDecoded = (i) => decodeEntities(_attrValueOf(i), true);
+const _attrValueDecoded = (i) =>
+	xmlMode
+		? decodeXmlEntities(_attrValueOf(i))
+		: decodeEntities(_attrValueOf(i), true);
 
 // Linear name lookup in a run — attribute lists are short, a loop beats a Map.
 /** @type {(start: number, count: number, name: string) => number} */
@@ -5694,6 +5697,51 @@ const SHELL_END_BODY = 4;
 let eofInTag = false;
 let sawSelectedContent = false;
 const decode = decodeEntities;
+
+const XML_NAMED_REFERENCES = {
+	amp: "&",
+	apos: "'",
+	gt: ">",
+	lt: "<",
+	quot: '"'
+};
+
+/**
+ * @param {number} code Unicode code point
+ * @returns {boolean} whether XML 1.0 permits the character
+ */
+const isXmlChar = (code) =>
+	code === CC_TAB ||
+	code === CC_LF ||
+	code === 0x0d ||
+	(code >= 0x20 && code <= 0xd7ff) ||
+	(code >= 0xe000 && code <= 0xfffd) ||
+	(code >= 0x10000 && code <= 0x10ffff);
+
+/**
+ * Decode the five predefined XML entities and numeric character references.
+ * Unlike HTML, XML has no built-in entity table beyond those five names.
+ * @param {string} value source text
+ * @returns {string} decoded text
+ */
+const decodeXmlEntities = (value) =>
+	value.replace(
+		/&(?:#(?:x([\da-f]+)|(\d+))|([a-z]+));/gi,
+		(match, hex, decimal, name) => {
+			if (name !== undefined) {
+				return Object.prototype.hasOwnProperty.call(XML_NAMED_REFERENCES, name)
+					? XML_NAMED_REFERENCES[
+							/** @type {keyof typeof XML_NAMED_REFERENCES} */ (name)
+						]
+					: match;
+			}
+			const code = Number.parseInt(
+				hex === undefined ? decimal : hex,
+				hex ? 16 : 10
+			);
+			return isXmlChar(code) ? String.fromCodePoint(code) : "\uFFFD";
+		}
+	);
 /** @type {MutableToken} */
 const tok = {
 	type: TOKEN_EOF,
@@ -8280,7 +8328,11 @@ const handleTextToken = (input, start, end) => {
 		_namespaceOf(top) === NS_HTML &&
 		NO_DECODE_TEXT.has(_tagNameOf(top)) &&
 		(mode === MODE_TEXT || mode === MODE_IN_BODY);
-	let data = noDecode ? normalized : decode(normalized, false);
+	let data = noDecode
+		? normalized
+		: xmlMode
+			? decodeXmlEntities(normalized)
+			: decode(normalized, false);
 	// In RAWTEXT/RCDATA/script/PLAINTEXT, NULL becomes U+FFFD (tokenizer
 	// rule); in data state NULLs pass through to be dropped in "in body".
 	if (rawMode && inputHasNul && data.includes("\0")) {
@@ -8364,7 +8416,7 @@ const handleStartTagToken = (
 	const name = xmlMode
 		? input.slice(nameStart, nameEnd)
 		: internLowerName(TAG_NAME_INTERN, input, nameStart, nameEnd);
-	if (name === "selectedcontent") sawSelectedContent = true;
+	if (!xmlMode && name === "selectedcontent") sawSelectedContent = true;
 	tok.type = TOKEN_START_TAG;
 	tok.name = name;
 	// The reused token carries the tag's attribute run; every consumer of
 
@@ -3471,6 +3471,32 @@ describe("parseHtml", () => {
 			});
 		});
 
+		it("should not decode HTML-only or differently-cased entity names", () => {
+			const root = /** @type {MatElement} */ (
+				parseXml("<root>&nbsp;&AMP;&amp;</root>").children[0]
+			);
+			expect(root.children[0]).toMatchObject({
+				type: NodeType.Text,
+				data: "&nbsp;&AMP;&"
+			});
+		});
+
+		it("should not apply selectedcontent HTML behavior", () => {
+			const root = /** @type {MatElement} */ (
+				parseXml(
+					"<root><select><option selected=\"\"><span/></option><selectedcontent/></select></root>"
+				).children[0]
+			);
+			const select = /** @type {MatElement} */ (root.children[0]);
+			expect(select.children.map((node) => node.type)).toEqual([
+				NodeType.Element,
+				NodeType.Element
+			]);
+			expect(
+				/** @type {MatElement} */ (select.children[1]).children
+			).toHaveLength(0);
+		});
+
 		it("should honor AST skip options without changing XML structure", () => {
 			const root = /** @type {MatElement} */ (
 				parseXml("<root>text<!-- comment --><child/></root>", {