diff --git a/examples/ScopedCSS.ipynb b/examples/ScopedCSS.ipynb
new file mode 100644
index 0000000..29cb68d
--- /dev/null
+++ b/examples/ScopedCSS.ipynb
@@ -0,0 +1,99 @@
+{
+ "cells": [
+  {
+   "cell_type": "markdown",
+   "metadata": {},
+   "source": [
+    "# Scoped CSS\n",
+    "\n",
+    "By default, CSS in ipyvue templates is **global** — it affects all elements on the page with matching selectors. Scoped CSS limits styles to the component that defines them.\n",
+    "\n",
+    "**How it works:** ipyvue uses Vue 3's `compileStyle` to add a unique `data-v-*` attribute to your component's elements and rewrites your CSS selectors to include it (e.g., `.my-class` → `.my-class[data-v-1]`)."
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": null,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "import ipyvue as vue\n",
+    "import ipywidgets as widgets\n",
+    "from traitlets import default"
+   ]
+  },
+  {
+   "cell_type": "markdown",
+   "metadata": {},
+   "source": [
+    "## Without scoped CSS (the problem)"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": null,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "class GlobalStyle(vue.VueTemplate):\n",
+    "    @default(\"template\")\n",
+    "    def _default_template(self):\n",
+    "        return \"\"\"\n",
+    "        <template>\n",
+    "            <span class=\"demo-text\">Widget A</span>\n",
+    "        </template>\n",
+    "        <style>\n",
+    "            .demo-text { color: red; }\n",
+    "        </style>\n",
+    "        \"\"\"\n",
+    "\n",
+    "widget_b = vue.Html(tag=\"span\", children=[\"Widget B (innocent bystander)\"], class_=\"demo-text\")\n",
+    "\n",
+    "widgets.VBox([GlobalStyle(), widget_b])  # Both turn red!"
+   ]
+  },
+  {
+   "cell_type": "markdown",
+   "metadata": {},
+   "source": [
+    "## With `<style scoped>`"
+   ]
+  },
+  {
+   "cell_type": "code",
+   "execution_count": null,
+   "metadata": {},
+   "outputs": [],
+   "source": [
+    "class ScopedStyle(vue.VueTemplate):\n",
+    "    @default(\"template\")\n",
+    "    def _default_template(self):\n",
+    "        return \"\"\"\n",
+    "        <template>\n",
+    "            <span class=\"demo-text-2\">Widget A (scoped)</span>\n",
+    "        </template>\n",
+    "        <style scoped>\n",
+    "            .demo-text-2 { color: green; }\n",
+    "        </style>\n",
+    "        \"\"\"\n",
+    "\n",
+    "widget_b = vue.Html(tag=\"span\", children=[\"Widget B (unaffected)\"], class_=\"demo-text-2\")\n",
+    "\n",
+    "widgets.VBox([ScopedStyle(), widget_b])  # Only Widget A is green"
+   ]
+  }
+ ],
+ "metadata": {
+  "kernelspec": {
+   "display_name": "Python 3",
+   "language": "python",
+   "name": "python3"
+  },
+  "language_info": {
+   "name": "python",
+   "version": "3.9.0"
+  }
+ },
+ "nbformat": 4,
+ "nbformat_minor": 4
+}
diff --git a/js/src/esmVueTemplate.js b/js/src/esmVueTemplate.js
index 6a94f60..26f54d4 100644
--- a/js/src/esmVueTemplate.js
+++ b/js/src/esmVueTemplate.js
@@ -1,16 +1,25 @@
 import * as Vue from 'vue'
-import { parse, compileScript, compileTemplate } from 'vue/compiler-sfc'
+import { parse, compileScript, compileTemplate, compileStyle } from 'vue/compiler-sfc'
 import esModuleShims from './es-module-shims-txt.js'
 import {transform} from "sucrase";
 
 window.esmsInitOptions = { shimMode: true };
 
+let scopeIdCounter = 0;
+function generateScopeId() {
+    return `data-v-${(++scopeIdCounter).toString(36)}`;
+}
+
 export async function compileSfc(sfcStr, mixin) {
     await init()
     const parsedTemplate = parse(sfcStr)
     const { descriptor: {script, scriptSetup, template, styles} } = parsedTemplate;
 
-    styles && styles.forEach(({content, attrs}) => {
+    // Check if any style block has scoped attribute
+    const hasScoped = styles && styles.some(s => s.scoped);
+    const scopeId = hasScoped ? generateScopeId() : null;
+
+    styles && styles.forEach(({content, attrs, scoped}) => {
         const prefixedCssId = attrs.id && `ipyvue-${attrs.id}`;
         let style = prefixedCssId && document.getElementById(prefixedCssId);
         if (!style) {
@@ -20,8 +29,23 @@ export async function compileSfc(sfcStr, mixin) {
             }
             document.head.appendChild(style);
         }
-        if (style.innerHTML !== content) {
-            style.innerHTML = content;
+
+        let cssContent = content;
+        if (scoped && scopeId) {
+            // Use Vue's compileStyle to transform scoped CSS
+            const compiled = compileStyle({
+                source: content,
+                id: scopeId,
+                scoped: true,
+            });
+            if (compiled.errors.length) {
+                console.warn('CSS compilation errors:', compiled.errors);
+            }
+            cssContent = compiled.code;
+        }
+
+        if (style.innerHTML !== cssContent) {
+            style.innerHTML = cssContent;
         }
     });
 
@@ -33,7 +57,7 @@ export async function compileSfc(sfcStr, mixin) {
             script.content = script.content.replace(/^[^{]+(?={)/, "export default ");
         }
     }
-    let compiledScript = (script || scriptSetup) && compileScript(parsedTemplate.descriptor, {id: "abc"});
+    let compiledScript = (script || scriptSetup) && compileScript(parsedTemplate.descriptor, {id: scopeId || "abc"});
 
     const code = compiledScript && (compiledScript.lang === "ts"
         ? transform(compiledScript.content, { transforms: ["typescript"] }).code
@@ -43,9 +67,12 @@ export async function compileSfc(sfcStr, mixin) {
 
     const compiledTemplate = template && compileTemplate({
         source: template.content,
+        id: scopeId || "abc",
+        scoped: hasScoped,
         compilerOptions: {
             bindingMetadata: compiledScript ? compiledScript.bindings : {},
             prefixIdentifiers: true,
+            scopeId: scopeId,
         }
     });
     if (compiledTemplate && compiledTemplate.tips.length) {
diff --git a/tests/ui/test_template.py b/tests/ui/test_template.py
index 727b9bc..c6b6c6c 100644
--- a/tests/ui/test_template.py
+++ b/tests/ui/test_template.py
@@ -70,3 +70,49 @@ def on_custom(data):
     page_session.locator("text=Click Me").click()
     page_session.locator("text=Clicked").wait_for()
     assert last_event_data == "not-an-event-object"
+
+
+class ScopedStyleTemplate(vue.VueTemplate):
+    @default("template")
+    def _default_vue_template(self):
+        return """
+        <template>
+            <div class="scoped-container">
+                <span id="scoped-text" class="scoped-text">Scoped text</span>
+            </div>
+        </template>
+        <style scoped>
+            .scoped-text { color: rgb(255, 0, 0); }
+        </style>
+        """
+
+
+def test_template_scoped_style(
+    ipywidgets_runner, page_session: playwright.sync_api.Page
+):
+    def kernel_code():
+        from test_template import ScopedStyleTemplate
+        import ipyvue as vue
+        import ipywidgets as widgets
+        from IPython.display import display
+
+        scoped = ScopedStyleTemplate()
+        unscoped = vue.Html(
+            tag="span",
+            children=["Unscoped text"],
+            class_="scoped-text",
+            attributes={"id": "unscoped-text"},
+        )
+        display(widgets.VBox([scoped, unscoped]))
+
+    ipywidgets_runner(kernel_code)
+    page_session.locator("#scoped-text").wait_for()
+    page_session.locator("#unscoped-text").wait_for()
+    scoped_color = page_session.eval_on_selector(
+        "#scoped-text", "el => getComputedStyle(el).color"
+    )
+    unscoped_color = page_session.eval_on_selector(
+        "#unscoped-text", "el => getComputedStyle(el).color"
+    )
+    assert scoped_color == "rgb(255, 0, 0)"
+    assert unscoped_color != "rgb(255, 0, 0)"