diff --git a/packages/next/client/components/navigation.ts b/packages/next/client/components/navigation.ts
index 7da7495b27da7..efca123183312 100644
--- a/packages/next/client/components/navigation.ts
+++ b/packages/next/client/components/navigation.ts
@@ -1,5 +1,6 @@
 // useLayoutSegments() // Only the segments for the current place. ['children', 'dashboard', 'children', 'integrations'] -> /dashboard/integrations (/dashboard/layout.js would get ['children', 'dashboard', 'children', 'integrations'])
 
+import type { FlightRouterState } from '../../server/app-render'
 import { useContext, useMemo } from 'react'
 import {
   SearchParamsContext,
@@ -105,16 +106,45 @@ export function usePathname(): string {
 //   return useContext(LayoutSegmentsContext)
 // }
 
+// TODO-APP: handle parallel routes
+function getSelectedLayoutSegmentPath(
+  tree: FlightRouterState,
+  parallelRouteKey: string,
+  first = true,
+  segmentPath: string[] = []
+): string[] {
+  let node: FlightRouterState
+  if (first) {
+    // Use the provided parallel route key on the first parallel route
+    node = tree[1][parallelRouteKey]
+  } else {
+    // After first parallel route prefer children, if there's no children pick the first parallel route.
+    const parallelRoutes = tree[1]
+    node = parallelRoutes.children ?? Object.values(parallelRoutes)[0]
+  }
+
+  if (!node) return segmentPath
+  const segment = node[0]
+  const segmentValue = Array.isArray(segment) ? segment[1] : segment
+  if (!segmentValue) return segmentPath
+
+  segmentPath.push(segmentValue)
+
+  return getSelectedLayoutSegmentPath(
+    node,
+    parallelRouteKey,
+    false,
+    segmentPath
+  )
+}
+
 // TODO-APP: Expand description when the docs are written for it.
 /**
- * Get the current segment one level down from the layout.
+ * Get the canonical segment path from this level to the leaf node.
  */
 export function useSelectedLayoutSegment(
   parallelRouteKey: string = 'children'
-): string {
+): string[] {
   const { tree } = useContext(LayoutRouterContext)
-
-  const segment = tree[1][parallelRouteKey][0]
-
-  return Array.isArray(segment) ? segment[1] : segment
+  return getSelectedLayoutSegmentPath(tree, parallelRouteKey)
 }
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/(group)/second/[...catchall]/page.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/(group)/second/[...catchall]/page.js
new file mode 100644
index 0000000000000..7e15d00e0a26a
--- /dev/null
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/(group)/second/[...catchall]/page.js
@@ -0,0 +1,11 @@
+'use client'
+
+import { useSelectedLayoutSegment } from 'next/navigation'
+
+export default function Page() {
+  const selectedLayoutSegment = useSelectedLayoutSegment()
+
+  return (
+    <p id="page-layout-segments">{JSON.stringify(selectedLayoutSegment)}</p>
+  )
+}
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/(group)/second/page.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/(group)/second/page.js
new file mode 100644
index 0000000000000..c17431379f962
--- /dev/null
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/(group)/second/page.js
@@ -0,0 +1,3 @@
+export default function Page() {
+  return null
+}
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/page.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/page.js
new file mode 100644
index 0000000000000..c17431379f962
--- /dev/null
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/[dynamic]/page.js
@@ -0,0 +1,3 @@
+export default function Page() {
+  return null
+}
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/layout.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/layout.js
new file mode 100644
index 0000000000000..10342ef050bf8
--- /dev/null
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/layout.js
@@ -0,0 +1,14 @@
+'use client'
+
+import { useSelectedLayoutSegment } from 'next/navigation'
+
+export default function Layout({ children }) {
+  const selectedLayoutSegment = useSelectedLayoutSegment()
+
+  return (
+    <>
+      <p id="inner-layout">{JSON.stringify(selectedLayoutSegment)}</p>
+      {children}
+    </>
+  )
+}
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/page.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/page.js
new file mode 100644
index 0000000000000..c17431379f962
--- /dev/null
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/first/page.js
@@ -0,0 +1,3 @@
+export default function Page() {
+  return null
+}
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/layout.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/layout.js
new file mode 100644
index 0000000000000..90311bb47861f
--- /dev/null
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/layout.js
@@ -0,0 +1,14 @@
+'use client'
+
+import { useSelectedLayoutSegment } from 'next/navigation'
+
+export default function Layout({ children }) {
+  const selectedLayoutSegment = useSelectedLayoutSegment()
+
+  return (
+    <>
+      <p id="outer-layout">{JSON.stringify(selectedLayoutSegment)}</p>
+      {children}
+    </>
+  )
+}
diff --git a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/server/page.js b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/server/page.js
index 35c72bc285712..c38d4f5ab1023 100644
--- a/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/server/page.js
+++ b/test/e2e/app-dir/app/app/hooks/use-selected-layout-segment/server/page.js
@@ -1,4 +1,3 @@
-'use client'
 // TODO-APP: enable once test is not skipped.
 // import { useSelectedLayoutSegment } from 'next/navigation'
 
diff --git a/test/e2e/app-dir/app/middleware.js b/test/e2e/app-dir/app/middleware.js
index 1c0cb01aa16b3..b9163ca06adef 100644
--- a/test/e2e/app-dir/app/middleware.js
+++ b/test/e2e/app-dir/app/middleware.js
@@ -14,6 +14,18 @@ export function middleware(request) {
     return NextResponse.rewrite(new URL('/dashboard', request.url))
   }
 
+  if (
+    request.nextUrl.pathname ===
+    '/hooks/use-selected-layout-segment/rewritten-middleware'
+  ) {
+    return NextResponse.rewrite(
+      new URL(
+        '/hooks/use-selected-layout-segment/first/slug3/second/catch/all',
+        request.url
+      )
+    )
+  }
+
   if (request.nextUrl.pathname === '/redirect-middleware-to-dashboard') {
     return NextResponse.redirect(new URL('/dashboard', request.url))
   }
diff --git a/test/e2e/app-dir/app/next.config.js b/test/e2e/app-dir/app/next.config.js
index c9f390fc829e4..0dcacc5e94534 100644
--- a/test/e2e/app-dir/app/next.config.js
+++ b/test/e2e/app-dir/app/next.config.js
@@ -12,6 +12,11 @@ module.exports = {
           source: '/rewritten-to-dashboard',
           destination: '/dashboard',
         },
+        {
+          source: '/hooks/use-selected-layout-segment/rewritten',
+          destination:
+            '/hooks/use-selected-layout-segment/first/slug3/second/catch/all',
+        },
       ],
     }
   },
diff --git a/test/e2e/app-dir/index.test.ts b/test/e2e/app-dir/index.test.ts
index cc6b318efe65b..7fac781429347 100644
--- a/test/e2e/app-dir/index.test.ts
+++ b/test/e2e/app-dir/index.test.ts
@@ -1194,6 +1194,37 @@ describe('app dir', () => {
             expect(el.attr('data-query')).toBe('query')
           })
         })
+
+        describe('useSelectedLayoutSegment', () => {
+          it.each`
+            path                                                           | outerLayout                                             | innerLayout
+            ${'/hooks/use-selected-layout-segment/first'}                  | ${['first']}                                            | ${[]}
+            ${'/hooks/use-selected-layout-segment/first/slug1'}            | ${['first', 'slug1']}                                   | ${['slug1']}
+            ${'/hooks/use-selected-layout-segment/first/slug2/second'}     | ${['first', 'slug2', '(group)', 'second']}              | ${['slug2', '(group)', 'second']}
+            ${'/hooks/use-selected-layout-segment/first/slug2/second/a/b'} | ${['first', 'slug2', '(group)', 'second', 'a/b']}       | ${['slug2', '(group)', 'second', 'a/b']}
+            ${'/hooks/use-selected-layout-segment/rewritten'}              | ${['first', 'slug3', '(group)', 'second', 'catch/all']} | ${['slug3', '(group)', 'second', 'catch/all']}
+            ${'/hooks/use-selected-layout-segment/rewritten-middleware'}   | ${['first', 'slug3', '(group)', 'second', 'catch/all']} | ${['slug3', '(group)', 'second', 'catch/all']}
+          `(
+            'should have the correct layout segments at $path',
+            async ({ path, outerLayout, innerLayout }) => {
+              const html = await renderViaHTTP(next.url, path)
+              const $ = cheerio.load(html)
+
+              expect(JSON.parse($('#outer-layout').text())).toEqual(outerLayout)
+              expect(JSON.parse($('#inner-layout').text())).toEqual(innerLayout)
+            }
+          )
+
+          it('should return an empty array in pages', async () => {
+            const html = await renderViaHTTP(
+              next.url,
+              '/hooks/use-selected-layout-segment/first/slug2/second/a/b'
+            )
+            const $ = cheerio.load(html)
+
+            expect(JSON.parse($('#page-layout-segments').text())).toEqual([])
+          })
+        })
       })
 
       if (isDev) {