diff --git a/goldens/public-api/common/errors.api.md b/goldens/public-api/common/errors.api.md
index ff719b033d1..5622f253600 100644
--- a/goldens/public-api/common/errors.api.md
+++ b/goldens/public-api/common/errors.api.md
@@ -31,6 +31,8 @@ export const enum RuntimeErrorCode {
     // (undocumented)
     PARENT_NG_SWITCH_NOT_FOUND = 2000,
     // (undocumented)
+    PLACEHOLDER_DIMENSION_LIMIT_EXCEEDED = 2967,
+    // (undocumented)
     PRIORITY_IMG_MISSING_PRECONNECT_TAG = 2956,
     // (undocumented)
     REQUIRED_INPUT_MISSING = 2954,
diff --git a/packages/common/src/directives/ng_optimized_image/ng_optimized_image.ts b/packages/common/src/directives/ng_optimized_image/ng_optimized_image.ts
index f53cadf953c..34c9d8cebb7 100644
--- a/packages/common/src/directives/ng_optimized_image/ng_optimized_image.ts
+++ b/packages/common/src/directives/ng_optimized_image/ng_optimized_image.ts
@@ -117,6 +117,12 @@ const FIXED_SRCSET_HEIGHT_LIMIT = 1080;
  */
 export const PLACEHOLDER_BLUR_AMOUNT = 15;
 
+/**
+ * Placeholder dimension (height or width) limit in pixels. Angular produces a warning
+ * when this limit is crossed.
+ */
+const PLACEHOLDER_DIMENSION_LIMIT = 1000;
+
 /**
  * Used to warn or error when the user provides an overly large dataURL for the placeholder
  * attribute.
@@ -364,7 +370,7 @@ export class NgOptimizedImage implements OnInit, OnChanges, OnDestroy {
   /**
    * A URL or data URL for an image to be used as a placeholder while this image loads.
    */
-  @Input({transform: booleanOrDataUrlAttribute}) placeholder?: string | boolean;
+  @Input({transform: booleanOrUrlAttribute}) placeholder?: string | boolean;
 
   /**
    * Configuration object for placeholder settings. Options:
@@ -518,6 +524,10 @@ export class NgOptimizedImage implements OnInit, OnChanges, OnDestroy {
         });
       }
     }
+
+    if (ngDevMode && changes['placeholder']?.currentValue && !this.isServer) {
+      assertPlaceholderDimensions(this, this.imgElement);
+    }
   }
 
   private callImageLoader(
@@ -651,7 +661,7 @@ export class NgOptimizedImage implements OnInit, OnChanges, OnDestroy {
         width: placeholderResolution,
         isPlaceholder: true,
       })})`;
-    } else if (typeof placeholderInput === 'string' && placeholderInput.startsWith('data:')) {
+    } else if (typeof placeholderInput === 'string') {
       return `url(${placeholderInput})`;
     }
     return null;
@@ -1286,6 +1296,28 @@ function assetPriorityCountBelowThreshold() {
   IMGS_WITH_PRIORITY_ATTR_COUNT++;
 }
 
+/**
+ * Warns if placeholder's dimension are over a threshold.
+ *
+ * This assert function is meant to only run on the browser.
+ */
+function assertPlaceholderDimensions(dir: NgOptimizedImage, imgElement: HTMLImageElement) {
+  const computedStyle = window.getComputedStyle(imgElement);
+  let renderedWidth = parseFloat(computedStyle.getPropertyValue('width'));
+  let renderedHeight = parseFloat(computedStyle.getPropertyValue('height'));
+
+  if (renderedWidth > PLACEHOLDER_DIMENSION_LIMIT || renderedHeight > PLACEHOLDER_DIMENSION_LIMIT) {
+    console.warn(
+      formatRuntimeError(
+        RuntimeErrorCode.PLACEHOLDER_DIMENSION_LIMIT_EXCEEDED,
+        `${imgDirectiveDetails(dir.ngSrc)} it uses a placeholder image, but at least one of ` +
+          `of the dimensions attribute (height or width) exceeds the limit of ${PLACEHOLDER_DIMENSION_LIMIT}px. ` +
+          `To fix this, use a smaller image as a placeholder.`,
+      ),
+    );
+  }
+}
+
 function round(input: number): number | string {
   return Number.isInteger(input) ? input : input.toFixed(2);
 }
@@ -1301,8 +1333,8 @@ function unwrapSafeUrl(value: string | SafeValue): string {
 
 // Transform function to handle inputs which may be booleans, strings, or string representations
 // of boolean values. Used for the placeholder attribute.
-export function booleanOrDataUrlAttribute(value: boolean | string): boolean | string {
-  if (typeof value === 'string' && value.startsWith(`data:`)) {
+export function booleanOrUrlAttribute(value: boolean | string): boolean | string {
+  if (typeof value === 'string' && value !== 'true' && value !== 'false' && value !== '') {
     return value;
   }
   return booleanAttribute(value);
diff --git a/packages/common/src/errors.ts b/packages/common/src/errors.ts
index 6970f1c2def..bd1dd5878a4 100644
--- a/packages/common/src/errors.ts
+++ b/packages/common/src/errors.ts
@@ -40,4 +40,5 @@ export const enum RuntimeErrorCode {
   LCP_IMG_NGSRC_MODIFIED = 2964,
   OVERSIZED_PLACEHOLDER = 2965,
   TOO_MANY_PRIORITY_ATTRIBUTES = 2966,
+  PLACEHOLDER_DIMENSION_LIMIT_EXCEEDED = 2967,
 }
diff --git a/packages/common/test/directives/ng_optimized_image_spec.ts b/packages/common/test/directives/ng_optimized_image_spec.ts
index 83304d0e57a..2fe6e7e1e3f 100644
--- a/packages/common/test/directives/ng_optimized_image_spec.ts
+++ b/packages/common/test/directives/ng_optimized_image_spec.ts
@@ -1129,6 +1129,38 @@ describe('Image directive', () => {
         );
       });
     }
+
+    it('should add a background-image tag when placeholder is provided as a URL', () => {
+      setupTestingModule({imageLoader});
+      const template =
+        '<img ngSrc="path/img.png" width="400" height="300" placeholder="https://mysite.com/assets/my-image.png" />';
+
+      const fixture = createTestComponent(template);
+      fixture.detectChanges();
+      const nativeElement = fixture.nativeElement as HTMLElement;
+      const img = nativeElement.querySelector('img')!;
+      // Double quotes removed to account for different browser behavior.
+      expect(img.getAttribute('style')?.replace(/"/g, '').replace(/\s/g, '')).toBe(
+        `background-size:cover;background-position:50%50%;background-repeat:no-repeat;background-image:url(https://mysite.com/assets/my-image.png);filter:blur(${PLACEHOLDER_BLUR_AMOUNT}px);`,
+      );
+    });
+
+    // DataURLs get stripped from background-image attribute in Node, but not browsers.
+    it('should add a background-image tag when placeholder is provided as relative URL', () => {
+      setupTestingModule({imageLoader});
+      const template =
+        '<img ngSrc="path/img.png" width="400" height="300" placeholder="../../assets/my-image.png" />';
+
+      const fixture = createTestComponent(template);
+      fixture.detectChanges();
+      const nativeElement = fixture.nativeElement as HTMLElement;
+      const img = nativeElement.querySelector('img')!;
+      // Double quotes removed to account for different browser behavior.
+      expect(img.getAttribute('style')?.replace(/"/g, '').replace(/\s/g, '')).toBe(
+        `background-size:cover;background-position:50%50%;background-repeat:no-repeat;background-image:url(../../assets/my-image.png);filter:blur(${PLACEHOLDER_BLUR_AMOUNT}px);`,
+      );
+    });
+
     it('should add a background-image tag when placeholder is provided without value', () => {
       setupTestingModule({imageLoader});
       const template = '<img ngSrc="path/img.png" width="400" height="300" placeholder />';
@@ -1276,6 +1308,40 @@ describe('Image directive', () => {
           `performance, generate a smaller data URL placeholder.`,
       );
     });
+
+    if (isBrowser) {
+      it('should throw if the placeholder height exceeds the threshold', () => {
+        setUpModuleNoLoader();
+
+        const template = `<img ngSrc="path/img.png" width="100" height="100" style="width:1001px; height: 300px" placeholder="data:image/png;base64,${'a'.repeat(
+          100,
+        )}">`;
+
+        const consoleWarnSpy = spyOn(console, 'warn');
+        const fixture = createTestComponent(template);
+        fixture.detectChanges();
+        expect(consoleWarnSpy.calls.count()).toBe(1);
+        expect(consoleWarnSpy.calls.argsFor(0)[0]).toMatch(
+          new RegExp(`NG0${RuntimeErrorCode.PLACEHOLDER_DIMENSION_LIMIT_EXCEEDED}:`),
+        );
+      });
+
+      it('should throw if the placeholder width exceeds the threshold', () => {
+        setUpModuleNoLoader();
+
+        const template = `<img ngSrc="path/img.png" width="100" height="100" style="height:1001px; width: 300px" placeholder="data:image/png;base64,${'a'.repeat(
+          100,
+        )}">`;
+
+        const consoleWarnSpy = spyOn(console, 'warn');
+        const fixture = createTestComponent(template);
+        fixture.detectChanges();
+        expect(consoleWarnSpy.calls.count()).toBe(1);
+        expect(consoleWarnSpy.calls.argsFor(0)[0]).toMatch(
+          new RegExp(`NG0${RuntimeErrorCode.PLACEHOLDER_DIMENSION_LIMIT_EXCEEDED}:`),
+        );
+      });
+    }
   });
 
   describe('preconnect detector', () => {