diff --git a/karma.config.js b/karma.config.js
index e83bdd7b5..6981d737a 100644
--- a/karma.config.js
+++ b/karma.config.js
@@ -22,6 +22,11 @@ module.exports = config => config.set({
     { pattern: 'test/**/*.test.js', watched: false }
   ],
 
+  proxies: {
+    // useful when the contents of a fake asset do not matter
+    '/_/': 'localhost/'
+  },
+
   // create dedicated bundles for src, test helpers, and each test suite
   preprocessors: {
     'src/index.js': ['rollup'],
diff --git a/packages/dom/src/serialize-frames.js b/packages/dom/src/serialize-frames.js
index d6ef7c6bd..44d346cad 100644
--- a/packages/dom/src/serialize-frames.js
+++ b/packages/dom/src/serialize-frames.js
@@ -1,5 +1,55 @@
 import serializeDOM from './serialize-dom';
 
+// List of attributes that accept URIs that should be transformed
+const URI_ATTRS = ['href', 'src', 'srcset', 'poster', 'background'];
+const URI_SELECTOR = URI_ATTRS.map(a => `[${a}]`).join(',') + (
+  ',[style*="url("]'); // include elements with url style attributes
+
+// A loose srcset image candidate regex split into capture groups
+// https://html.spec.whatwg.org/multipage/images.html#srcset-attribute
+const SRCSET_REGEX = /(\s*)([^,]\S*[^,])((?:\s+[^,]+)*\s*(?:,|$))/g;
+
+// A loose CSS url() regex split into capture groups
+const CSS_URL_REGEX = /(url\((["']?))((?:\\.|(?!\2).|[^)])+)(\2\))/g;
+
+// Transforms URL attributes within a document to be fully qualified URLs. This is necessary when
+// embedded documents are serialized and their contents become root-relative.
+function transformRelativeUrls(dom) {
+  // transform style elements that might contain URLs
+  for (let style of dom.querySelectorAll('style')) {
+    style.innerHTML &&= style.innerHTML
+      .replace(CSS_URL_REGEX, (_, $1, $2, uri, $4) => (
+        `${$1}${new URL(uri, style.baseURI).href}${$4}`
+      ));
+  }
+
+  // transform element attributes that might contain URLs
+  for (let el of dom.querySelectorAll(URI_SELECTOR)) {
+    for (let attr of URI_ATTRS.concat('style')) {
+      if (!(attr in el) || !el[attr] || !el.hasAttribute(attr)) continue;
+      let value = el[attr];
+
+      if (attr === 'style') {
+        // transform inline style url() usage
+        value = el.getAttribute('style')
+          .replace(CSS_URL_REGEX, (_, $1, $2, uri, $4) => (
+            `${$1}${new URL(uri, el.baseURI).href}${$4}`
+          ));
+      } else if (attr === 'srcset') {
+        // transform each srcset URL
+        value = value.replace(SRCSET_REGEX, (_, $1, uri, $3) => (
+          `${$1}${new URL(uri, el.baseURI).href}${$3}`
+        ));
+      } else {
+        // resolve the URL with the node's base URI
+        value = new URL(value, el.baseURI).href;
+      }
+
+      el.setAttribute(attr, value);
+    }
+  }
+}
+
 // Recursively serializes iframe documents into srcdoc attributes.
 export default function serializeFrames(dom, clone, { enableJavaScript }) {
   for (let frame of dom.querySelectorAll('iframe')) {
@@ -22,6 +72,7 @@ export default function serializeFrames(dom, clone, { enableJavaScript }) {
 
       // recersively serialize contents
       let serialized = serializeDOM({
+        domTransformation: transformRelativeUrls,
         dom: frame.contentDocument,
         enableJavaScript
       });
diff --git a/packages/dom/test/serialize-frames.test.js b/packages/dom/test/serialize-frames.test.js
index fc7fa1aa5..c99feee8f 100644
--- a/packages/dom/test/serialize-frames.test.js
+++ b/packages/dom/test/serialize-frames.test.js
@@ -26,6 +26,16 @@ describe('serializeFrames', () => {
       <iframe id="frame-empty-self" src="javascript:void(
         Object.defineProperty(this.document, 'documentElement', { value: null })
       )"></iframe>
+      <iframe id="frame-with-urls" src="javascript:void(
+        (this.document.body.background = '_/bg.png'),
+        (this.document.body.innerHTML = \`
+          <style>@font-face { src: url('_/font.woff2') }</style>
+          <h1 style='background-image:url(_/head.png)'>Testing</h1>
+          <link rel='stylesheet' href='_/style.css'>
+          <img src='_/img.gif' srcset='/_/img.png 2x,
+            //example.com/img.png 400w'>
+          <video poster='_/poster.png'>\`)
+      )"></iframe>
     `);
 
     let $frameInput = await getFrame('frame-input');
@@ -82,6 +92,21 @@ describe('serializeFrames', () => {
     ].join('')));
   });
 
+  it('serializes iframes internal URLs', () => {
+    let url = uri => new URL(uri, document.URL).href;
+
+    expect($('#frame-with-urls')[0].getAttribute('srcdoc')).toBe([
+      `<!DOCTYPE html><html><head></head><body background="${url('_/bg.png')}">`,
+      `<style>@font-face { src: url('${url('_/font.woff2')}') }</style>`,
+      `<h1 style="background-image:url(${url('_/head.png')})">Testing</h1>`,
+      `<link rel="stylesheet" href="${url('_/style.css')}">`,
+      `<img src="${url('_/img.gif')}" srcset="${url('/_/img.png')} 2x,`,
+      '  http://example.com/img.png 400w">',
+      `<video poster="${url('_/poster.png')}"></video>`
+      // account for indentation in the fixture
+    ].join(' '.repeat(12)) + '</body></html>');
+  });
+
   it('does not serialize iframes with CORS', () => {
     expect($('#frame-external')[0].getAttribute('src')).toBe('https://example.com');
     expect($('#frame-external-fail')[0].getAttribute('src')).toBe('https://google.com');