diff --git a/modules/navigation/3d/nav_mesh_generator_3d.cpp b/modules/navigation/3d/nav_mesh_generator_3d.cpp
index e92a9d304b0a..f1dd3876b2d8 100644
--- a/modules/navigation/3d/nav_mesh_generator_3d.cpp
+++ b/modules/navigation/3d/nav_mesh_generator_3d.cpp
@@ -34,6 +34,7 @@
 
 #include "core/config/project_settings.h"
 #include "core/math/convex_hull.h"
+#include "core/math/vector3.h"
 #include "core/os/thread.h"
 #include "scene/3d/mesh_instance_3d.h"
 #include "scene/3d/multimesh_instance_3d.h"
@@ -595,7 +596,12 @@ void NavMeshGenerator3D::generator_parse_navigationobstacle_node(const Ref<Navig
 		return;
 	}
 
-	const Transform3D node_xform = p_source_geometry_data->root_node_transform * Transform3D(Basis(), obstacle->get_global_position());
+	// Obstacles are projected to the xz-plane, so only rotation around the y-axis can be taken into account.
+	Transform3D node_xform;
+	node_xform.origin = obstacle->get_global_position();
+	node_xform.scale_basis(obstacle->get_global_basis().get_scale());
+	node_xform.rotate_basis(Vector3(0.0, 1.0, 0.0), obstacle->get_global_rotation().y);
+	node_xform = p_source_geometry_data->root_node_transform * node_xform;
 
 	const float obstacle_radius = obstacle->get_radius();
 
@@ -635,7 +641,7 @@ void NavMeshGenerator3D::generator_parse_navigationobstacle_node(const Ref<Navig
 		obstruction_shape_vertices_ptrw[i] = node_xform.xform(obstacle_vertices_ptr[i]);
 		obstruction_shape_vertices_ptrw[i].y = 0.0;
 	}
-	p_source_geometry_data->add_projected_obstruction(obstruction_shape_vertices, obstacle->get_global_position().y + p_source_geometry_data->root_node_transform.origin.y, obstacle->get_height(), obstacle->get_carve_navigation_mesh());
+	p_source_geometry_data->add_projected_obstruction(obstruction_shape_vertices, obstacle->get_global_position().y + p_source_geometry_data->root_node_transform.origin.y, obstacle->get_global_basis().get_scale().y * obstacle->get_height(), obstacle->get_carve_navigation_mesh());
 }
 
 void NavMeshGenerator3D::generator_parse_source_geometry_data(const Ref<NavigationMesh> &p_navigation_mesh, Ref<NavigationMeshSourceGeometryData3D> p_source_geometry_data, Node *p_root_node) {
diff --git a/scene/3d/navigation_obstacle_3d.cpp b/scene/3d/navigation_obstacle_3d.cpp
index f2ac8f789c9c..a5076c1e31c6 100644
--- a/scene/3d/navigation_obstacle_3d.cpp
+++ b/scene/3d/navigation_obstacle_3d.cpp
@@ -31,6 +31,8 @@
 #include "navigation_obstacle_3d.h"
 
 #include "core/math/geometry_2d.h"
+#include "core/math/transform_3d.h"
+#include "core/math/vector3.h"
 #include "servers/navigation_server_3d.h"
 
 void NavigationObstacle3D::_bind_methods() {
@@ -173,8 +175,11 @@ void NavigationObstacle3D::_notification(int p_what) {
 					RS::get_singleton()->instance_set_transform(fake_agent_radius_debug_instance, debug_transform);
 				}
 				if (static_obstacle_debug_instance.is_valid() && get_vertices().size() > 0) {
+					// Obstacles are projected to the xz-plane, so only rotation around the y-axis can be taken into account.
 					Transform3D debug_transform;
 					debug_transform.origin = get_global_position();
+					debug_transform.scale_basis(get_global_basis().get_scale());
+					debug_transform.rotate_basis(Vector3(0.0, 1.0, 0.0), get_global_rotation().y);
 					RS::get_singleton()->instance_set_transform(static_obstacle_debug_instance, debug_transform);
 				}
 #endif // DEBUG_ENABLED
@@ -346,6 +351,15 @@ bool NavigationObstacle3D::get_carve_navigation_mesh() const {
 	return carve_navigation_mesh;
 }
 
+PackedStringArray NavigationObstacle3D::get_configuration_warnings() const {
+	PackedStringArray warnings = Node::get_configuration_warnings();
+
+	if (get_global_rotation().x != 0.0 || get_global_rotation().z != 0.0) {
+		warnings.push_back(RTR("NavigationObstacle3D only takes global rotation around the y-axis into account. Rotations around the x-axis or z-axis might lead to unexpected results."));
+	}
+	return warnings;
+}
+
 void NavigationObstacle3D::_update_map(RID p_map) {
 	NavigationServer3D::get_singleton()->obstacle_set_map(obstacle, p_map);
 	map_current = p_map;
diff --git a/scene/3d/navigation_obstacle_3d.h b/scene/3d/navigation_obstacle_3d.h
index e9a4669fa270..3cb9a4d280fb 100644
--- a/scene/3d/navigation_obstacle_3d.h
+++ b/scene/3d/navigation_obstacle_3d.h
@@ -117,6 +117,8 @@ class NavigationObstacle3D : public Node3D {
 	void set_carve_navigation_mesh(bool p_enabled);
 	bool get_carve_navigation_mesh() const;
 
+	PackedStringArray get_configuration_warnings() const override;
+
 private:
 	void _update_map(RID p_map);
 	void _update_position(const Vector3 p_position);