diff --git a/bake/compose.go b/bake/compose.go
index f74730f18..261f5972f 100644
--- a/bake/compose.go
+++ b/bake/compose.go
@@ -76,13 +76,7 @@ func ParseCompose(cfgs []composetypes.ConfigFile, envs map[string]string) (*Conf
 
 			var additionalContexts map[string]string
 			if s.Build.AdditionalContexts != nil {
-				additionalContexts = map[string]string{}
-				for k, v := range s.Build.AdditionalContexts {
-					if strings.HasPrefix(v, "service:") {
-						v = strings.Replace(v, "service:", "target:", 1)
-					}
-					additionalContexts[k] = v
-				}
+				additionalContexts = composeToBuildkitNamedContexts(s.Build.AdditionalContexts)
 			}
 
 			var shmSize *string
@@ -471,7 +465,7 @@ func (t *Target) composeExtTarget(exts map[string]any) error {
 		t.NoCacheFilter = dedupSlice(append(t.NoCacheFilter, xb.NoCacheFilter...))
 	}
 	if len(xb.Contexts) > 0 {
-		t.Contexts = dedupMap(t.Contexts, xb.Contexts)
+		t.Contexts = dedupMap(t.Contexts, composeToBuildkitNamedContexts(xb.Contexts))
 	}
 
 	return nil
@@ -506,3 +500,16 @@ func composeToBuildkitSSH(sshKey composetypes.SSHKey) *buildflags.SSH {
 	}
 	return bkssh
 }
+
+func composeToBuildkitNamedContexts(m map[string]string) map[string]string {
+	out := make(map[string]string, len(m))
+	for k, v := range m {
+		if strings.HasPrefix(v, "service:") || strings.HasPrefix(v, "target:") {
+			if parts := strings.SplitN(v, ":", 2); len(parts) == 2 {
+				v = "target:" + sanitizeTargetName(parts[1])
+			}
+		}
+		out[k] = v
+	}
+	return out
+}
diff --git a/bake/compose_test.go b/bake/compose_test.go
index b06468049..23422796b 100644
--- a/bake/compose_test.go
+++ b/bake/compose_test.go
@@ -893,6 +893,44 @@ services:
 	require.Equal(t, map[string]string{"base": "target:base"}, c.Targets[1].Contexts)
 }
 
+func TestServiceContextDot(t *testing.T) {
+	dt := []byte(`
+services:
+  base.1:
+    build:
+      dockerfile: baseapp.Dockerfile
+    command: ./entrypoint.sh
+  foo.1:
+    build:
+      dockerfile: fooapp.Dockerfile
+    command: ./entrypoint.sh
+  webapp:
+    build:
+      context: ./dir
+      additional_contexts:
+        base: service:base.1
+      x-bake:
+        contexts:
+          foo: target:foo.1
+`)
+
+	c, err := ParseCompose([]composetypes.ConfigFile{{Content: dt}}, nil)
+	require.NoError(t, err)
+
+	require.Equal(t, 1, len(c.Groups))
+	require.Equal(t, "default", c.Groups[0].Name)
+	sort.Strings(c.Groups[0].Targets)
+	require.Equal(t, []string{"base_1", "foo_1", "webapp"}, c.Groups[0].Targets)
+
+	require.Equal(t, 3, len(c.Targets))
+	sort.Slice(c.Targets, func(i, j int) bool {
+		return c.Targets[i].Name < c.Targets[j].Name
+	})
+
+	require.Equal(t, "webapp", c.Targets[2].Name)
+	require.Equal(t, map[string]string{"base": "target:base_1", "foo": "target:foo_1"}, c.Targets[2].Contexts)
+}
+
 func TestDotEnvDir(t *testing.T) {
 	tmpdir := t.TempDir()
 	require.NoError(t, os.Mkdir(filepath.Join(tmpdir, ".env"), 0755))