diff --git a/clang/docs/ReleaseNotes.rst b/clang/docs/ReleaseNotes.rst
index 6959e61cac980..cbf1c1922c59f 100644
--- a/clang/docs/ReleaseNotes.rst
+++ b/clang/docs/ReleaseNotes.rst
@@ -209,6 +209,8 @@ C23 Feature Support
   `WG14 N2710 <https://www.open-std.org/jtc1/sc22/wg14/www/docs/n2710.htm>`_.
 - Fixed accepting as compatible unnamed tag types with the same fields within
   the same translation unit but from different types.
+- ``-MG`` now silences the "file not found" errors with ``#embed`` when
+  scanning for dependencies and encountering an unknown file. #GH165632
 
 Non-comprehensive list of changes in this release
 -------------------------------------------------
diff --git a/clang/lib/Frontend/DependencyFile.cpp b/clang/lib/Frontend/DependencyFile.cpp
index 15fa7de35df97..93e012b163878 100644
--- a/clang/lib/Frontend/DependencyFile.cpp
+++ b/clang/lib/Frontend/DependencyFile.cpp
@@ -75,6 +75,17 @@ struct DepCollectorPPCallbacks : public PPCallbacks {
                                     /*IsMissing*/ false);
   }
 
+  bool EmbedFileNotFound(StringRef FileName) override {
+    DepCollector.maybeAddDependency(
+        llvm::sys::path::remove_leading_dotslash(FileName),
+        /*FromModule=*/false,
+        /*IsSystem=*/false,
+        /*IsModuleFile=*/false,
+        /*IsMissing=*/true);
+    // Return true to silence the file not found diagnostic.
+    return true;
+  }
+
   void InclusionDirective(SourceLocation HashLoc, const Token &IncludeTok,
                           StringRef FileName, bool IsAngled,
                           CharSourceRange FilenameRange,
diff --git a/clang/lib/Lex/PPDirectives.cpp b/clang/lib/Lex/PPDirectives.cpp
index 6a5e5d4bad3a6..891c8ab7f3155 100644
--- a/clang/lib/Lex/PPDirectives.cpp
+++ b/clang/lib/Lex/PPDirectives.cpp
@@ -4018,7 +4018,7 @@ void Preprocessor::HandleEmbedDirective(SourceLocation HashLoc, Token &EmbedTok,
       this->LookupEmbedFile(Filename, isAngled, true, LookupFromFile);
   if (!MaybeFileRef) {
     // could not find file
-    if (Callbacks && Callbacks->EmbedFileNotFound(OriginalFilename)) {
+    if (Callbacks && Callbacks->EmbedFileNotFound(Filename)) {
       return;
     }
     Diag(FilenameTok, diag::err_pp_file_not_found) << Filename;
diff --git a/clang/test/Driver/mg.c b/clang/test/Driver/mg.c
index 82d8a6084e5e0..b7458a08698d3 100644
--- a/clang/test/Driver/mg.c
+++ b/clang/test/Driver/mg.c
@@ -1,5 +1,7 @@
-// RUN: %clang -M -MG -include nonexistent-preinclude.h %s | FileCheck %s
+// RUN: %clang -M -MG -include nonexistent-preinclude.h -std=c23 %s | FileCheck %s
 // CHECK: nonexistent-preinclude.h
 // CHECK: nonexistent-ppinclude.h
+// CHECK: nonexistent-embed
 
 #include "nonexistent-ppinclude.h"
+#embed "nonexistent-embed"