diff --git a/packages/html-reporter/src/labels.tsx b/packages/html-reporter/src/labels.tsx
index 044e9ea074d9d..41b340a7d3ce0 100644
--- a/packages/html-reporter/src/labels.tsx
+++ b/packages/html-reporter/src/labels.tsx
@@ -46,12 +46,20 @@ export const ProjectAndTagLabelsView: React.FC<{
   // We can have an empty project name if we have no projects specified in the config
   const hasProjectNames = projectNames.length > 0 && !!activeProjectName;
 
-  return (hasProjectNames || otherLabels.length > 0) && <span className='label-row' style={style}>
+  // Drop tag labels that render identically to the project chip already shown next to them
+  // (e.g. project "ad2" plus tag "@ad2") to avoid a confusing duplicate badge.
+  const dedupedLabels = hasProjectNames ? otherLabels.filter(label => stripLeadingAt(label) !== activeProjectName) : otherLabels;
+
+  return (hasProjectNames || dedupedLabels.length > 0) && <span className='label-row' style={style}>
     {hasProjectNames && <ProjectLink projectNames={projectNames} projectName={activeProjectName} />}
-    <LabelsClickView labels={otherLabels} />
+    <LabelsClickView labels={dedupedLabels} />
   </span>;
 };
 
+function stripLeadingAt(label: string): string {
+  return label.startsWith('@') ? label.slice(1) : label;
+}
+
 const LabelsClickView: React.FC<{
   labels: string[],
 }> = ({ labels }) => {
diff --git a/tests/playwright-test/reporter-html.spec.ts b/tests/playwright-test/reporter-html.spec.ts
index 5f84bdaabe10f..e4e2f2958636e 100644
--- a/tests/playwright-test/reporter-html.spec.ts
+++ b/tests/playwright-test/reporter-html.spec.ts
@@ -1843,6 +1843,31 @@ for (const useIntermediateMergeReport of [true, false] as const) {
         await expect(page.locator('.label')).toHaveText('webkit');
       });
 
+      test('tag matching project name should not duplicate the project badge', async ({ runInlineTest, showReport, page }) => {
+        const result = await runInlineTest({
+          'playwright.config.js': `
+            module.exports = {
+              projects: [
+                { name: 'ad2', use: { browserName: 'chromium' } },
+              ],
+            };
+          `,
+          'a.test.js': `
+            const { expect, test } = require('@playwright/test');
+            test('pass', { tag: ['@ad2', '@smoke'] }, async ({}) => {
+              expect(1).toBe(1);
+            });
+          `,
+        }, { reporter: 'dot,html' }, { PLAYWRIGHT_HTML_OPEN: 'never' });
+
+        expect(result.exitCode).toBe(0);
+        expect(result.passed).toBe(1);
+
+        await showReport();
+
+        await expect(page.locator('.test-file-test', { has: page.getByText('pass', { exact: true }) }).locator('.label')).toHaveText(['ad2', 'smoke']);
+      });
+
       test('project label should not show if there are no explicit projects', async ({ runInlineTest, showReport, page }) => {
         const result = await runInlineTest({
           'a.test.js': `