diff --git a/.circleci/config.yml b/.circleci/config.yml
index 33cab75c97..8b67136c25 100644
--- a/.circleci/config.yml
+++ b/.circleci/config.yml
@@ -136,6 +136,27 @@ commands:
             git config --global url."ssh://git@github.com".insteadOf "https://github.com" || true
             git config --global gc.auto 0 || true
 
+  init_saucelabs_environment:
+    description: Sets up a domain that resolves to the local host.
+    steps:
+      - run:
+          name: Preparing environment for running tests on Saucelabs.
+          command: |
+            # For SauceLabs jobs, we set up a domain which resolves to the machine which launched
+            # the tunnel. We do this because devices are sometimes not able to properly resolve
+            # `localhost` or `127.0.0.1` through the SauceLabs tunnel. Using a domain that does not
+            # resolve to anything on SauceLabs VMs ensures that such requests are always resolved
+            # through the tunnel, and resolve to the actual tunnel host machine (i.e. the CircleCI VM).
+            # More context can be found in: https://github.com/angular/angular/pull/35171.
+            setPublicVar SAUCE_LOCALHOST_ALIAS_DOMAIN "angular-ci.local"
+            setSecretVar SAUCE_ACCESS_KEY $(echo $SAUCE_ACCESS_KEY | rev)
+      - run:
+          # Sets up a local domain in the machine's host file that resolves to the local
+          # host. This domain is helpful in Saucelabs tests where devices are not able to
+          # properly resolve `localhost` or `127.0.0.1` through the sauce-connect tunnel.
+          name: Setting up alias domain for local host.
+          command: echo "127.0.0.1 $SAUCE_LOCALHOST_ALIAS_DOMAIN" | sudo tee -a /etc/hosts
+
   # Normally this would be an individual job instead of a command.
   # But startup and setup time for each invidual windows job are high enough to discourage
   # many small jobs, so instead we use a command for setup unless the gain becomes significant.
@@ -295,9 +316,7 @@ jobs:
     steps:
       - custom_attach_workspace
       - init_environment
-      - run:
-          name: Preparing environment for running tests on Saucelabs.
-          command: setSecretVar SAUCE_ACCESS_KEY $(echo $SAUCE_ACCESS_KEY | rev)
+      - init_saucelabs_environment
       - run:
           name: Run Bazel tests on Saucelabs
           # See /tools/saucelabs/README.md for more info
@@ -319,9 +338,7 @@ jobs:
     steps:
       - custom_attach_workspace
       - init_environment
-      - run:
-          name: Preparing environment for running tests on Saucelabs.
-          command: setSecretVar SAUCE_ACCESS_KEY $(echo $SAUCE_ACCESS_KEY | rev)
+      - init_saucelabs_environment
       - run:
           name: Run Bazel tests on Saucelabs
           # See /tools/saucelabs/README.md for more info
@@ -639,11 +656,7 @@ jobs:
     steps:
       - custom_attach_workspace
       - init_environment
-      - run:
-          name: Preparing environment for running tests on Saucelabs.
-          command: |
-            setPublicVar KARMA_JS_BROWSERS $(node -e 'console.log(require("./browser-providers.conf").sauceAliases.CI_REQUIRED.join(","))')
-            setSecretVar SAUCE_ACCESS_KEY $(echo $SAUCE_ACCESS_KEY | rev)
+      - init_saucelabs_environment
       - run:
           name: Starting Saucelabs tunnel service
           command: ./tools/saucelabs/sauce-service.sh run
@@ -655,7 +668,11 @@ jobs:
           # Waiting on ready ensures that we don't run tests too early without Saucelabs not being ready.
           name: Waiting for Saucelabs tunnel to connect
           command: ./tools/saucelabs/sauce-service.sh ready-wait
-      - run: yarn karma start ./karma-js.conf.js --single-run --browsers=${KARMA_JS_BROWSERS}
+      - run:
+          name: Running tests on Saucelabs.
+          command: |
+            browsers=$(node -e 'console.log(require("./browser-providers.conf").sauceAliases.CI_REQUIRED.join(","))')
+            yarn karma start ./karma-js.conf.js --single-run --browsers=${browsers}
       - run:
           name: Stop Saucelabs tunnel service
           command: ./tools/saucelabs/sauce-service.sh stop
diff --git a/.circleci/env.sh b/.circleci/env.sh
index f38beb05e0..5fd67478a0 100755
--- a/.circleci/env.sh
+++ b/.circleci/env.sh
@@ -65,6 +65,7 @@ setPublicVar SAUCE_TUNNEL_IDENTIFIER "angular-framework-${CIRCLE_BUILD_NUM}-${CI
 # acquire CircleCI instances for too long if sauceconnect failed, we need a connect timeout.
 setPublicVar SAUCE_READY_FILE_TIMEOUT 120
 
+
 ####################################################################################################
 # Define environment variables for the `angular/components` repo unit tests job.
 ####################################################################################################
diff --git a/karma-js.conf.js b/karma-js.conf.js
index 5f431c3c9f..8f368e474a 100644
--- a/karma-js.conf.js
+++ b/karma-js.conf.js
@@ -167,6 +167,16 @@ module.exports = function(config) {
     conf.browserStack.tunnelIdentifier = tunnelIdentifier;
   }
 
+  // For SauceLabs jobs, we set up a domain which resolves to the machine which launched
+  // the tunnel. We do this because devices are sometimes not able to properly resolve
+  // `localhost` or `127.0.0.1` through the SauceLabs tunnel. Using a domain that does not
+  // resolve to anything on SauceLabs VMs ensures that such requests are always resolved through
+  // the tunnel, and resolve to the actual tunnel host machine (commonly the CircleCI VMs).
+  // More context can be found in: https://github.com/angular/angular/pull/35171.
+  if (process.env.SAUCE_LOCALHOST_ALIAS_DOMAIN) {
+    conf.hostname = process.env.SAUCE_LOCALHOST_ALIAS_DOMAIN;
+  }
+
   if (process.env.KARMA_WEB_TEST_MODE) {
     // KARMA_WEB_TEST_MODE is used to setup karma to run in
     // SauceLabs or Browserstack
diff --git a/tools/saucelabs/karma-saucelabs.js b/tools/saucelabs/karma-saucelabs.js
index dd0f623ce7..b5d8322644 100644
--- a/tools/saucelabs/karma-saucelabs.js
+++ b/tools/saucelabs/karma-saucelabs.js
@@ -21,22 +21,18 @@ try {
   // KARMA_WEB_TEST_MODE is set which informs /karma-js.conf.js that it should
   // run the test with the karma saucelabs launcher
   process.env['KARMA_WEB_TEST_MODE'] = 'SL_REQUIRED';
+  // Saucelabs parameters read from a temporary file that is created by the `sauce-service`. This
+  // will be `null` if the test runs locally without the `sauce-service` being started.
+  const saucelabsParams = readLocalSauceConnectParams();
   // Setup required SAUCE_* env if they are not already set
   if (!process.env['SAUCE_USERNAME'] || !process.env['SAUCE_ACCESS_KEY'] ||
       !process.env['SAUCE_TUNNEL_IDENTIFIER']) {
-    try {
-      // The following path comes from /tools/saucelabs/sauce-service.sh.
-      // We setup the required saucelabs environment variables here for the karma test
-      // from a json file under /tmp/angular/sauce-service  so that we don't break the
-      // test cache with a changing SAUCE_TUNNEL_IDENTIFIER provided through --test_env
-      const scParams = require('/tmp/angular/sauce-service/sauce-connect-params.json');
-      process.env['SAUCE_USERNAME'] = scParams.SAUCE_USERNAME;
-      process.env['SAUCE_ACCESS_KEY'] = scParams.SAUCE_ACCESS_KEY;
-      process.env['SAUCE_TUNNEL_IDENTIFIER'] = scParams.SAUCE_TUNNEL_IDENTIFIER;
-    } catch (e) {
-      console.error(e.stack || e);
-      console.error(
-          `!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
+    // We print a helpful error message below if the required Saucelabs parameters have not
+    // been specified in test environment, and the `sauce-service` params file has not been
+    // created either.
+    if (saucelabsParams === null) {
+      console.error(`
+!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 !!! Make sure that you have run "yarn bazel run //tools/saucelabs:sauce_service_setup"
 !!! (or "./tools/saucelabs/sauce-service.sh setup") before the test target. Alternately
 !!! you can provide the required SAUCE_* environment variables (SAUCE_USERNAME, SAUCE_ACCESS_KEY &
@@ -45,6 +41,16 @@ try {
 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!`);
       process.exit(1);
     }
+    process.env['SAUCE_USERNAME'] = saucelabsParams.SAUCE_USERNAME;
+    process.env['SAUCE_ACCESS_KEY'] = saucelabsParams.SAUCE_ACCESS_KEY;
+    process.env['SAUCE_TUNNEL_IDENTIFIER'] = saucelabsParams.SAUCE_TUNNEL_IDENTIFIER;
+    process.env['SAUCE_LOCALHOST_ALIAS_DOMAIN'] = saucelabsParams.SAUCE_LOCALHOST_ALIAS_DOMAIN;
+  }
+
+  // Pass through the optional `SAUCE_LOCALHOST_ALIAS_DOMAIN` environment variable. The
+  // variable is usually specified on CI, but is not required for testing with Saucelabs.
+  if (!process.env['SAUCE_LOCALHOST_ALIAS_DOMAIN'] && saucelabsParams !== null) {
+    process.env['SAUCE_LOCALHOST_ALIAS_DOMAIN'] = saucelabsParams.SAUCE_LOCALHOST_ALIAS_DOMAIN;
   }
 
   const scStart = `${sauceService} start-ready-wait`;
@@ -60,3 +66,15 @@ try {
   console.error(e.stack || e);
   process.exit(1);
 }
+
+function readLocalSauceConnectParams() {
+  try {
+    // The following path comes from /tools/saucelabs/sauce-service.sh.
+    // We setup the required saucelabs environment variables here for the karma test
+    // from a json file under /tmp/angular/sauce-service  so that we don't break the
+    // test cache with a changing SAUCE_TUNNEL_IDENTIFIER provided through --test_env
+    return require('/tmp/angular/sauce-service/sauce-connect-params.json');
+  } catch {
+    return null;
+  }
+}
diff --git a/tools/saucelabs/sauce-service.sh b/tools/saucelabs/sauce-service.sh
index 124d399572..fbb152c2e7 100755
--- a/tools/saucelabs/sauce-service.sh
+++ b/tools/saucelabs/sauce-service.sh
@@ -130,7 +130,7 @@ service-setup-command() {
     @fail "sc binary not found at ${SAUCE_CONNECT}"
   fi
 
-  echo "{ \"SAUCE_USERNAME\": \"${SAUCE_USERNAME}\", \"SAUCE_ACCESS_KEY\": \"${SAUCE_ACCESS_KEY}\", \"SAUCE_TUNNEL_IDENTIFIER\": \"${SAUCE_TUNNEL_IDENTIFIER}\" }" > ${SAUCE_PARAMS_JSON_FILE}
+  echo "{ \"SAUCE_USERNAME\": \"${SAUCE_USERNAME}\", \"SAUCE_ACCESS_KEY\": \"${SAUCE_ACCESS_KEY}\", \"SAUCE_TUNNEL_IDENTIFIER\": \"${SAUCE_TUNNEL_IDENTIFIER}\", \"SAUCE_LOCALHOST_ALIAS_DOMAIN\": \"${SAUCE_LOCALHOST_ALIAS_DOMAIN}\" }" > ${SAUCE_PARAMS_JSON_FILE}
 
   # Command arguments that will be passed to sauce-connect.
   # By default we disable SSL bumping for all requests. This is because SSL bumping is
@@ -147,6 +147,16 @@ service-setup-command() {
     "--user ${SAUCE_USERNAME}"
     # Don't add the --api-key here so we don't echo it out in service-pre-start
   )
+
+  if [[ -n "${SAUCE_LOCALHOST_ALIAS_DOMAIN}" ]]; then
+    # Ensures that requests to the localhost alias domain are always resolved through the tunnel.
+    # This environment variable is usually configured on CI, and refers to a domain that has been
+    # locally configured in the current machine's hosts file (e.g. `/etc/hosts`). The domain should
+    # resolve to the current machine in Saucelabs VMs, so we need to ensure that it is resolved
+    # through the tunnel we going to create.
+    sauce_args+=("--tunnel-domains ${SAUCE_LOCALHOST_ALIAS_DOMAIN}")
+  fi
+
   @echo "Sauce connect will be started with:"
   echo "  ${SAUCE_CONNECT} ${sauce_args[@]}"
   SERVICE_COMMAND="${SAUCE_CONNECT} ${sauce_args[@]} --api-key ${SAUCE_ACCESS_KEY}"
@@ -296,7 +306,7 @@ service-post-stop() {
       fi
       @wait_for "Waiting for start file" "${SERVICE_START_FILE}"
       ${SERVICE_COMMAND}
-    ) >>"${SERVICE_LOG_FILE}" 2>&1 
+    ) >>"${SERVICE_LOG_FILE}" 2>&1
   ) &
   echo $! >"${SERVICE_PID_FILE}"