diff --git a/bake/compose.go b/bake/compose.go
index ccf8098c..523d52cd 100644
--- a/bake/compose.go
+++ b/bake/compose.go
@@ -3,7 +3,6 @@ package bake
 import (
 	"context"
 	"fmt"
-	"maps"
 	"os"
 	"path/filepath"
 	"slices"
@@ -92,7 +91,12 @@ func ParseCompose(cfgs []composetypes.ConfigFile, envs map[string]string) (*Conf
 			var additionalContexts map[string]string
 			if s.Build.AdditionalContexts != nil {
 				additionalContexts = map[string]string{}
-				maps.Copy(additionalContexts, s.Build.AdditionalContexts)
+				for k, v := range s.Build.AdditionalContexts {
+					if strings.HasPrefix(v, "service:") {
+						v = strings.Replace(v, "service:", "target:", 1)
+					}
+					additionalContexts[k] = v
+				}
 			}
 
 			var shmSize *string
diff --git a/bake/compose_test.go b/bake/compose_test.go
index ebeb880e..82182cc1 100644
--- a/bake/compose_test.go
+++ b/bake/compose_test.go
@@ -798,6 +798,37 @@ services:
 	})
 }
 
+func TestServiceContext(t *testing.T) {
+	dt := []byte(`
+services:
+  base:
+    build:
+      dockerfile: baseapp.Dockerfile
+    command: ./entrypoint.sh
+  webapp:
+    build:
+      context: ./dir
+      additional_contexts:
+        base: service:base
+`)
+
+	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", "webapp"}, c.Groups[0].Targets)
+
+	require.Equal(t, 2, 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[1].Name)
+	require.Equal(t, map[string]string{"base": "target:base"}, c.Targets[1].Contexts)
+}
+
 // chdir changes the current working directory to the named directory,
 // and then restore the original working directory at the end of the test.
 func chdir(t *testing.T, dir string) {