diff --git a/goldens/cdk/overlay/index.api.md b/goldens/cdk/overlay/index.api.md
index 855db513f679..b40fc7e0ea37 100644
--- a/goldens/cdk/overlay/index.api.md
+++ b/goldens/cdk/overlay/index.api.md
@@ -284,7 +284,7 @@ export class FlexibleConnectedPositionStrategy implements PositionStrategy {
     // (undocumented)
     detach(): void;
     dispose(): void;
-    getPopoverInsertionPoint(): Element | null;
+    getPopoverInsertionPoint(): Element | null | {type: 'parent', element: Element};
     _origin: FlexibleConnectedPositionStrategyOrigin;
     positionChanges: Observable<ConnectedOverlayPositionChange>;
     get positions(): ConnectionPositionPair[];
@@ -311,7 +311,7 @@ export type FlexibleConnectedPositionStrategyOrigin = ElementRef | Element | (Po
 });
 
 // @public
-export type FlexibleOverlayPopoverLocation = 'global' | 'inline';
+export type FlexibleOverlayPopoverLocation = 'global' | 'inline' | {type: 'parent', element: Element };
 
 // @public
 export class FullscreenOverlayContainer extends OverlayContainer implements OnDestroy {
@@ -534,7 +534,7 @@ export interface PositionStrategy {
     attach(overlayRef: OverlayRef): void;
     detach?(): void;
     dispose(): void;
-    getPopoverInsertionPoint?(): Element | null;
+    getPopoverInsertionPoint?(): Element | null | {type: 'parent', element: Element};
 }
 
 // @public
diff --git a/src/cdk/overlay/overlay-directives.ts b/src/cdk/overlay/overlay-directives.ts
index 4fe99f3768b0..f69d079035a9 100644
--- a/src/cdk/overlay/overlay-directives.ts
+++ b/src/cdk/overlay/overlay-directives.ts
@@ -427,7 +427,7 @@ export class CdkConnectedOverlay implements OnDestroy, OnChanges {
       .withViewportMargin(this.viewportMargin)
       .withLockedPosition(this.lockPosition)
       .withTransformOriginOn(this.transformOriginSelector)
-      .withPopoverLocation(this.usePopover === 'global' ? 'global' : 'inline');
+      .withPopoverLocation(this.usePopover === null ? 'global' : this.usePopover);
   }
 
   /** Returns the position strategy of the overlay to be set on the overlay config */
diff --git a/src/cdk/overlay/overlay-ref.ts b/src/cdk/overlay/overlay-ref.ts
index 59971cf7b28b..53b0b5e70ac3 100644
--- a/src/cdk/overlay/overlay-ref.ts
+++ b/src/cdk/overlay/overlay-ref.ts
@@ -410,7 +410,13 @@ export class OverlayRef implements PortalOutlet {
         : null;
 
       if (customInsertionPoint) {
-        customInsertionPoint.after(this._host);
+        if (customInsertionPoint instanceof Element) {
+          customInsertionPoint.after(this._host);
+        } else {
+          if (customInsertionPoint.type === 'parent') {
+            customInsertionPoint.element?.appendChild(this._host);
+          }
+        }
       } else {
         this._previousHostParent?.appendChild(this._host);
       }
diff --git a/src/cdk/overlay/overlay.ts b/src/cdk/overlay/overlay.ts
index a52742866812..c55886c67ea5 100644
--- a/src/cdk/overlay/overlay.ts
+++ b/src/cdk/overlay/overlay.ts
@@ -95,7 +95,13 @@ export function createOverlayRef(injector: Injector, config?: OverlayConfig): Ov
   // it's going to end up at the custom insertion point anyways. We need to do it,
   // because some internal clients depend on the host passing through the container first.
   if (customInsertionPoint) {
-    customInsertionPoint.after(host);
+    if (customInsertionPoint instanceof Element) {
+      customInsertionPoint.after(host);
+    } else {
+      if (customInsertionPoint.type === 'parent') {
+        customInsertionPoint.element?.appendChild(host);
+      }
+    }
   }
 
   return new OverlayRef(
diff --git a/src/cdk/overlay/position/flexible-connected-position-strategy.spec.ts b/src/cdk/overlay/position/flexible-connected-position-strategy.spec.ts
index 11b7326fb779..45014d01ed85 100644
--- a/src/cdk/overlay/position/flexible-connected-position-strategy.spec.ts
+++ b/src/cdk/overlay/position/flexible-connected-position-strategy.spec.ts
@@ -2959,11 +2959,14 @@ describe('FlexibleConnectedPositionStrategy', () => {
     let positionStrategy: FlexibleConnectedPositionStrategy;
     let containerElement: HTMLElement;
     let originElement: HTMLElement;
+    let customHostElement: HTMLElement;
 
     beforeEach(() => {
       containerElement = overlayContainer.getContainerElement();
       originElement = createPositionedBlockElement();
+      customHostElement = createBlockElement('span');
       document.body.appendChild(originElement);
+      document.body.appendChild(customHostElement);
 
       positionStrategy = createFlexibleConnectedPositionStrategy(injector, originElement)
         .withPopoverLocation('inline')
@@ -2979,6 +2982,7 @@ describe('FlexibleConnectedPositionStrategy', () => {
 
     afterEach(() => {
       originElement.remove();
+      customHostElement.remove();
     });
 
     it('should place the overlay inside the overlay container by default', () => {
@@ -3014,6 +3018,32 @@ describe('FlexibleConnectedPositionStrategy', () => {
       overlayRef.attach(portal);
       expect(originElement.nextElementSibling).toBe(overlayRef.hostElement);
     });
+
+    it('should insert the overlay as a child of a custom element', () => {
+      if (!('showPopover' in document.body)) {
+        return;
+      }
+
+      positionStrategy.withPopoverLocation({type: 'parent', element: customHostElement});
+      attachOverlay({positionStrategy, usePopover: true});
+
+      expect(containerElement.contains(overlayRef.hostElement)).toBe(false);
+      expect(customHostElement.contains(overlayRef.hostElement)).toBe(true);
+      expect(overlayRef.hostElement.getAttribute('popover')).toBe('manual');
+    });
+
+    it('should insert the overlay as a child of the origin', () => {
+      if (!('showPopover' in document.body)) {
+        return;
+      }
+
+      positionStrategy.withPopoverLocation({type: 'parent', element: originElement});
+      attachOverlay({positionStrategy, usePopover: true});
+
+      expect(containerElement.contains(overlayRef.hostElement)).toBe(false);
+      expect(originElement.contains(overlayRef.hostElement)).toBe(true);
+      expect(overlayRef.hostElement.getAttribute('popover')).toBe('manual');
+    });
   });
 });
 
diff --git a/src/cdk/overlay/position/flexible-connected-position-strategy.ts b/src/cdk/overlay/position/flexible-connected-position-strategy.ts
index 9552c9c7ee7d..18c271b4e601 100644
--- a/src/cdk/overlay/position/flexible-connected-position-strategy.ts
+++ b/src/cdk/overlay/position/flexible-connected-position-strategy.ts
@@ -64,7 +64,10 @@ export function createFlexibleConnectedPositionStrategy(
 }
 
 /** Supported locations in the DOM for connected overlays. */
-export type FlexibleOverlayPopoverLocation = 'global' | 'inline';
+export type FlexibleOverlayPopoverLocation =
+  | 'global'
+  | 'inline'
+  | {type: 'parent'; element: Element};
 
 /**
  * A strategy for positioning overlays. Using this strategy, an overlay is given an
@@ -522,6 +525,8 @@ export class FlexibleConnectedPositionStrategy implements PositionStrategy {
    * @param location Configures the location in the DOM. Supports the following values:
    *  - `global` - The default which inserts the overlay inside the overlay container.
    *  - `inline` - Inserts the overlay next to the trigger.
+   *  - {type: 'parent', element: element} - Inserts the overlay to a child of a custom parent
+   *  element.
    */
   withPopoverLocation(location: FlexibleOverlayPopoverLocation): this {
     this._popoverLocation = location;
@@ -529,19 +534,34 @@ export class FlexibleConnectedPositionStrategy implements PositionStrategy {
   }
 
   /** @docs-private */
-  getPopoverInsertionPoint(): Element | null {
-    // Return null so it falls back to inserting into the overlay container.
+  getPopoverInsertionPoint(): Element | null | {type: 'parent'; element: Element} {
     if (this._popoverLocation === 'global') {
       return null;
     }
 
-    const origin = this._origin;
+    let hostElement: Element | null = null;
 
-    if (origin instanceof ElementRef) {
-      return origin.nativeElement;
-    } else if (origin instanceof Element) {
-      return origin;
+    if (this._popoverLocation === 'inline') {
+      if (this._origin instanceof ElementRef) {
+        hostElement = this._origin.nativeElement;
+      } else if (this._origin instanceof Element) {
+        hostElement = this._origin;
+      }
+    } else {
+      // this._popoverLocation is {type: 'parent', element: Element}
+      hostElement = this._popoverLocation.element;
     }
+
+    // If the location is 'inline', we're inserting as a sibling.
+    if (this._popoverLocation === 'inline') {
+      return hostElement;
+    }
+
+    // Otherwise we're inserting as a child.
+    if (hostElement) {
+      return {type: 'parent', element: hostElement};
+    }
+
     return null;
   }
 
diff --git a/src/cdk/overlay/position/position-strategy.ts b/src/cdk/overlay/position/position-strategy.ts
index 1191acb2dc0e..34c548d1da13 100644
--- a/src/cdk/overlay/position/position-strategy.ts
+++ b/src/cdk/overlay/position/position-strategy.ts
@@ -26,5 +26,5 @@ export interface PositionStrategy {
    * Gets the element in the DOM after which to insert
    * the overlay when it is rendered out as a popover.
    */
-  getPopoverInsertionPoint?(): Element | null;
+  getPopoverInsertionPoint?(): Element | null | {type: 'parent'; element: Element};
 }