diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.cpp
index 7e496390c8..4c08ef6855 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.cpp
@@ -14,6 +14,8 @@
 #include <AzToolsFramework/Manipulators/ManipulatorSnapping.h>
 #include <AzFramework/Viewport/ViewportColors.h>
 #include <AzFramework/Viewport/ViewportConstants.h>
+#include <AzCore/Component/TransformBus.h>
+#include <AzCore/Component/NonUniformScaleBus.h>
 
 namespace AzToolsFramework
 {
@@ -37,20 +39,20 @@ namespace AzToolsFramework
     void BoxViewportEdit::UpdateManipulators()
     {
         AZ::Transform boxWorldFromLocal = AZ::Transform::CreateIdentity();
-        BoxManipulatorRequestBus::EventResult(
-            boxWorldFromLocal, m_entityComponentIdPair, &BoxManipulatorRequests::GetCurrentTransform);
+        AZ::TransformBus::EventResult(
+            boxWorldFromLocal, m_entityComponentIdPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
 
-        AZ::Vector3 boxScale = AZ::Vector3::CreateOne();
-        BoxManipulatorRequestBus::EventResult(
-            boxScale, m_entityComponentIdPair, &BoxManipulatorRequests::GetBoxScale);
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(
+            nonUniformScale, m_entityComponentIdPair.GetEntityId(), &AZ::NonUniformScaleRequestBus::Events::GetScale);
 
         AZ::Vector3 boxDimensions = AZ::Vector3::CreateZero();
         BoxManipulatorRequestBus::EventResult(
-            boxDimensions, m_entityComponentIdPair, &BoxManipulatorRequests::GetDimensions);
+            boxDimensions, m_entityComponentIdPair, &BoxManipulatorRequestBus::Events::GetDimensions);
 
-        // ensure we apply the entity scale to the box dimensions so
-        // the manipulators appear in the correct location
-        boxDimensions *= boxScale;
+        AZ::Transform boxLocalTransform = AZ::Transform::CreateIdentity();
+        BoxManipulatorRequestBus::EventResult(
+            boxLocalTransform, m_entityComponentIdPair, &BoxManipulatorRequestBus::Events::GetCurrentLocalTransform);
 
         for (size_t manipulatorIndex = 0; manipulatorIndex < m_linearManipulators.size(); ++manipulatorIndex)
         {
@@ -58,7 +60,8 @@ namespace AzToolsFramework
             {
                 linearManipulator->SetSpace(boxWorldFromLocal);
                 linearManipulator->SetLocalTransform(
-                    AZ::Transform::CreateTranslation(s_boxAxes[manipulatorIndex] * 0.5f * boxDimensions));
+                    boxLocalTransform * AZ::Transform::CreateTranslation(s_boxAxes[manipulatorIndex] * 0.5f * boxDimensions));
+                linearManipulator->SetNonUniformScale(nonUniformScale);
                 linearManipulator->SetBoundsDirty();
             }
         }
@@ -69,8 +72,8 @@ namespace AzToolsFramework
         m_entityComponentIdPair = entityComponentIdPair;
 
         AZ::Transform worldFromLocal = AZ::Transform::CreateIdentity();
-        BoxManipulatorRequestBus::EventResult(
-            worldFromLocal, entityComponentIdPair, &BoxManipulatorRequests::GetCurrentTransform);
+        AZ::TransformBus::EventResult(
+            worldFromLocal, entityComponentIdPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
 
         for (size_t manipulatorIndex = 0; manipulatorIndex < m_linearManipulators.size(); ++manipulatorIndex)
         {
@@ -85,36 +88,35 @@ namespace AzToolsFramework
 
                 ManipulatorViews views;
                 views.emplace_back(CreateManipulatorViewQuadBillboard(
-                    AzFramework::ViewportColors::DefaultManipulatorHandleColor, AzFramework::ViewportConstants::DefaultManipulatorHandleSize));
+                    AzFramework::ViewportColors::DefaultManipulatorHandleColor,
+                    AzFramework::ViewportConstants::DefaultManipulatorHandleSize));
                 linearManipulator->SetViews(AZStd::move(views));
 
                 linearManipulator->InstallMouseMoveCallback(
-                    [this, entityComponentIdPair](
-                        const LinearManipulator::Action& action)
+                    [this, entityComponentIdPair,
+                     transformScale{ linearManipulator->GetSpace().GetUniformScale() }](const LinearManipulator::Action& action)
                 {
+                    AZ::Transform boxLocalTransform = AZ::Transform::CreateIdentity();
+                    BoxManipulatorRequestBus::EventResult(
+                        boxLocalTransform, entityComponentIdPair, &BoxManipulatorRequestBus::Events::GetCurrentLocalTransform);
+
+                    const AZ::Vector3 manipulatorPosition = GetPositionInManipulatorFrame(transformScale, boxLocalTransform, action);
+
                     // calculate the amount of displacement along an axis this manipulator has moved
                     // clamp movement so it cannot go negative based on axis direction
                     const AZ::Vector3 axisDisplacement =
-                        action.LocalPosition().GetAbs() * 2.0f
-                        * AZ::GetMax<float>(0.0f, action.LocalPosition().GetNormalized().Dot(action.m_fixed.m_axis));
-
-                    AZ::Vector3 boxScale = AZ::Vector3::CreateOne();
-                    BoxManipulatorRequestBus::EventResult(
-                        boxScale, entityComponentIdPair, &BoxManipulatorRequests::GetBoxScale);
+                        manipulatorPosition.GetAbs() * 2.0f
+                        * AZ::GetMax(0.0f, manipulatorPosition.GetNormalized().Dot(action.m_fixed.m_axis));
 
                     AZ::Vector3 boxDimensions = AZ::Vector3::CreateZero();
                     BoxManipulatorRequestBus::EventResult(
-                        boxDimensions, entityComponentIdPair, &BoxManipulatorRequests::GetDimensions);
-
-                    // ensure we take into account the entity scale using the axis displacement
-                    const AZ::Vector3 scaledAxisDisplacement =
-                        axisDisplacement / boxScale;
+                        boxDimensions, entityComponentIdPair, &BoxManipulatorRequestBus::Events::GetDimensions);
 
                     // update dimensions - preserve dimensions not effected by this
                     // axis, and update current axis displacement
                     BoxManipulatorRequestBus::Event(
-                        entityComponentIdPair, &BoxManipulatorRequests::SetDimensions,
-                        (NotAxis(action.m_fixed.m_axis) * boxDimensions).GetMax(scaledAxisDisplacement));
+                        entityComponentIdPair, &BoxManipulatorRequestBus::Events::SetDimensions,
+                        (NotAxis(action.m_fixed.m_axis) * boxDimensions).GetMax(axisDisplacement));
 
                     UpdateManipulators();
                 });
@@ -137,4 +139,12 @@ namespace AzToolsFramework
             }
         }
     }
+
+    AZ::Vector3 GetPositionInManipulatorFrame(float worldUniformScale, const AZ::Transform& manipulatorLocalTransform,
+        const LinearManipulator::Action& action)
+    {
+        return manipulatorLocalTransform.GetInverse().TransformPoint(
+            action.m_start.m_localPosition +
+            action.m_current.m_localPositionOffset / AZ::GetClamp(worldUniformScale, AZ::MinTransformScale, AZ::MaxTransformScale));
+    }
 } // namespace AzToolsFramework
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.h b/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.h
index 98ef17e547..66ea626e12 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/ComponentModes/BoxViewportEdit.h
@@ -31,4 +31,10 @@ namespace AzToolsFramework
         using BoxManipulators = AZStd::array<AZStd::shared_ptr<LinearManipulator>, 6>;
         BoxManipulators m_linearManipulators; ///< Manipulators for editing box size.
     };
+
+    /// Calculates the position of the manipulator in its own reference frame.
+    /// Removes the effects of the manipulator local transform, and accounts for world transform scale in
+    /// the action local offset.
+    AZ::Vector3 GetPositionInManipulatorFrame(float worldUniformScale, const AZ::Transform& manipulatorLocalTransform,
+        const LinearManipulator::Action& action);
 } // namespace AzToolsFramework
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Manipulators/BoxManipulatorRequestBus.h b/Code/Framework/AzToolsFramework/AzToolsFramework/Manipulators/BoxManipulatorRequestBus.h
index b0bcdf47f2..0d6299f5d4 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Manipulators/BoxManipulatorRequestBus.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Manipulators/BoxManipulatorRequestBus.h
@@ -26,11 +26,21 @@ namespace AzToolsFramework
         virtual AZ::Vector3 GetDimensions() = 0;
         //! Set the X/Y/Z dimensions of the box shape/collider.
         virtual void SetDimensions(const AZ::Vector3& dimensions) = 0;
+        // O3DE_DEPRECATION_NOTICE(GHI-7572)
+        //! @deprecated Because non-uniform scale effects can be complex, it is recommended to separately use
+        //! AZ::TransformBus::Events::GetWorldTM, AZ::NonUniformScaleRequests::GetScale and GetCurrentLocalTransform
+        //! and combine their effects.
         //! Get the transform of the box shape/collider.
         //! This is used by \ref BoxComponentMode instead of the \ref \AZ::TransformBus
         //! because a collider may have an additional translation/orientation offset from
         //! the Entity transform.
         virtual AZ::Transform GetCurrentTransform() = 0;
+        //! Get the transform of the box relative to the entity.
+        virtual AZ::Transform GetCurrentLocalTransform() = 0;
+        // O3DE_DEPRECATION_NOTICE(GHI-7572)
+        //! @deprecated Because non-uniform scale effects can be complex, it is recommended to separately use
+        //! AZ::TransformBus::Events::GetWorldTM, AZ::NonUniformScaleRequests::GetScale and GetCurrentLocalTransform
+        //! and combine their effects.
         //! Get the scale currently applied to the box.
         //! With the Box Shape, the largest x/y/z component is taken
         //! so scale is always uniform, with colliders the scale may
diff --git a/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.cpp b/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.cpp
index f78f2f048d..953bc9d349 100644
--- a/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.cpp
+++ b/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.cpp
@@ -161,6 +161,11 @@ namespace LmbrCentral
         return AzToolsFramework::TransformNormalizedScale(m_aaboxShape.GetCurrentTransform());
     }
 
+    AZ::Transform EditorAxisAlignedBoxShapeComponent::GetCurrentLocalTransform()
+    {
+        return AZ::Transform::CreateIdentity();
+    }
+
     AZ::Vector3 EditorAxisAlignedBoxShapeComponent::GetBoxScale()
     {
         return AZ::Vector3(m_aaboxShape.GetCurrentTransform().GetUniformScale() * m_aaboxShape.GetCurrentNonUniformScale());
diff --git a/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.h b/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.h
index 8bff4ea7e1..a906b10129 100644
--- a/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.h
+++ b/Gems/LmbrCentral/Code/Source/Shape/EditorAxisAlignedBoxShapeComponent.h
@@ -58,6 +58,7 @@ namespace LmbrCentral
         AZ::Vector3 GetDimensions() override;
         void SetDimensions(const AZ::Vector3& dimensions) override;
         AZ::Transform GetCurrentTransform() override;
+        AZ::Transform GetCurrentLocalTransform() override;
         AZ::Vector3 GetBoxScale() override;
 
         void ConfigurationChanged();        
diff --git a/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.cpp b/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.cpp
index 2983ca7753..777e2f728b 100644
--- a/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.cpp
+++ b/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.cpp
@@ -167,6 +167,11 @@ namespace LmbrCentral
         return AzToolsFramework::TransformNormalizedScale(m_boxShape.GetCurrentTransform());
     }
 
+    AZ::Transform EditorBoxShapeComponent::GetCurrentLocalTransform()
+    {
+        return AZ::Transform::CreateIdentity();
+    }
+
     AZ::Vector3 EditorBoxShapeComponent::GetBoxScale()
     {
         return AZ::Vector3(m_boxShape.GetCurrentTransform().GetUniformScale() * m_boxShape.GetCurrentNonUniformScale());
diff --git a/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.h b/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.h
index aa24bda5c4..499a20497c 100644
--- a/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.h
+++ b/Gems/LmbrCentral/Code/Source/Shape/EditorBoxShapeComponent.h
@@ -57,6 +57,7 @@ namespace LmbrCentral
         AZ::Vector3 GetDimensions() override;
         void SetDimensions(const AZ::Vector3& dimensions) override;
         AZ::Transform GetCurrentTransform() override;
+        AZ::Transform GetCurrentLocalTransform() override;
         AZ::Vector3 GetBoxScale() override;
 
         void ConfigurationChanged();        
diff --git a/Gems/LmbrCentral/Code/Tests/EditorBoxShapeComponentTests.cpp b/Gems/LmbrCentral/Code/Tests/EditorBoxShapeComponentTests.cpp
index 4b72a4fb58..82a7f57937 100644
--- a/Gems/LmbrCentral/Code/Tests/EditorBoxShapeComponentTests.cpp
+++ b/Gems/LmbrCentral/Code/Tests/EditorBoxShapeComponentTests.cpp
@@ -7,6 +7,17 @@
  */
 #include "LmbrCentralReflectionTest.h"
 #include "Shape/EditorBoxShapeComponent.h"
+#include "Shape/EditorSphereShapeComponent.h"
+#include <AzCore/Component/NonUniformScaleBus.h>
+#include <AzFramework/Viewport/ViewportScreen.h>
+#include <AzManipulatorTestFramework/AzManipulatorTestFramework.h>
+#include <AzManipulatorTestFramework/AzManipulatorTestFrameworkTestHelpers.h>
+#include <AzManipulatorTestFramework/ImmediateModeActionDispatcher.h>
+#include <AzManipulatorTestFramework/IndirectManipulatorViewportInteraction.h>
+#include <AzManipulatorTestFramework/ViewportInteraction.h>
+#include <AzToolsFramework/Entity/EditorEntityHelpers.h>
+#include <AzToolsFramework/ToolsComponents/EditorNonUniformScaleComponent.h>
+#include <AzToolsFramework/UnitTest/AzToolsFrameworkTestHelpers.h>
 
 namespace LmbrCentral
 {
@@ -56,5 +67,110 @@ namespace LmbrCentral
 
        EXPECT_EQ(dimensions, AZ::Vector3(0.37f, 0.57f, 0.66f));
     }
+
+    class EditorBoxShapeComponentFixture : public UnitTest::ToolsApplicationFixture
+    {
+    public:
+        void SetUpEditorFixtureImpl() override;
+        void TearDownEditorFixtureImpl() override;
+
+        AZStd::unique_ptr<AZ::ComponentDescriptor> m_editorBoxShapeComponentDescriptor;
+        AZStd::unique_ptr<AZ::ComponentDescriptor> m_editorSphereShapeComponentDescriptor;
+
+        AZ::Entity* m_entity = nullptr;
+    };
+
+    void EditorBoxShapeComponentFixture::SetUpEditorFixtureImpl()
+    {
+        AZ::SerializeContext* serializeContext = nullptr;
+        AZ::ComponentApplicationBus::BroadcastResult(serializeContext, &AZ::ComponentApplicationBus::Events::GetSerializeContext);
+
+        // need to reflect EditorSphereShapeComponent in order for EditorBaseShapeComponent to be reflected
+        m_editorSphereShapeComponentDescriptor = AZStd::unique_ptr<AZ::ComponentDescriptor>(EditorSphereShapeComponent::CreateDescriptor());
+
+        m_editorBoxShapeComponentDescriptor =
+            AZStd::unique_ptr<AZ::ComponentDescriptor>(EditorBoxShapeComponent::CreateDescriptor());
+
+        ShapeComponentConfig::Reflect(serializeContext);
+        BoxShape::Reflect(serializeContext);
+        m_editorSphereShapeComponentDescriptor->Reflect(serializeContext);
+        m_editorBoxShapeComponentDescriptor->Reflect(serializeContext);
+
+        UnitTest::CreateDefaultEditorEntity("BoxShapeComponentEntity", &m_entity);
+        m_entity->Deactivate();
+        m_entity->CreateComponent(AzToolsFramework::Components::EditorNonUniformScaleComponent::RTTI_Type());
+        m_entity->CreateComponent(EditorBoxShapeComponentTypeId);
+        m_entity->Activate();
+    }
+
+    void EditorBoxShapeComponentFixture::TearDownEditorFixtureImpl()
+    {
+        AzToolsFramework::EditorEntityContextRequestBus::Broadcast(
+            &AzToolsFramework::EditorEntityContextRequestBus::Events::DestroyEditorEntity, m_entity->GetId());
+        m_entity = nullptr;
+
+        m_editorBoxShapeComponentDescriptor.reset();
+        m_editorSphereShapeComponentDescriptor.reset();
+    }
+
+    using EditorBoxShapeComponentManipulatorFixture =
+        UnitTest::IndirectCallManipulatorViewportInteractionFixtureMixin<EditorBoxShapeComponentFixture>;
+
+    TEST_F(EditorBoxShapeComponentManipulatorFixture, BoxShapeNonUniformScaleManipulatorsScaleCorrectly)
+    {
+        // a rotation which rotates the x-axis to (0.8, 0.6, 0)
+        const AZ::Quaternion boxRotation(0.0f, 0.0f, 0.316228f, 0.948683f);
+        AZ::Transform boxTransform = AZ::Transform::CreateFromQuaternionAndTranslation(boxRotation, AZ::Vector3(2.0f, 3.0f, 4.0f));
+        boxTransform.SetUniformScale(1.5f);
+        AZ::TransformBus::Event(m_entity->GetId(), &AZ::TransformBus::Events::SetWorldTM, boxTransform);
+
+        const AZ::Vector3 nonUniformScale(4.0f, 1.5f, 2.0f);
+        AZ::NonUniformScaleRequestBus::Event(m_entity->GetId(), &AZ::NonUniformScaleRequests::SetScale, nonUniformScale);
+
+        const AZ::Vector3 boxDimensions(1.0f, 2.0f, 2.5f);
+        BoxShapeComponentRequestsBus::Event(m_entity->GetId(), &BoxShapeComponentRequests::SetBoxDimensions, boxDimensions);
+
+        // enter the box shape component's component mode
+        AzToolsFramework::SelectEntity(m_entity->GetId());
+        AzToolsFramework::ComponentModeFramework::ComponentModeSystemRequestBus::Broadcast(
+            &AzToolsFramework::ComponentModeFramework::ComponentModeSystemRequestBus::Events::AddSelectedComponentModesOfType,
+            EditorBoxShapeComponentTypeId);
+
+        // position the camera so it is looking down at the box
+        AzFramework::SetCameraTransform(
+            m_cameraState,
+            AZ::Transform::CreateFromQuaternionAndTranslation(
+                AZ::Quaternion::CreateRotationX(-AZ::Constants::HalfPi), AZ::Vector3(2.0f, 3.0f, 20.0f)));
+
+        // position in world space which should allow grabbing the box's x scale manipulator
+        // the unscaled position of the x scale manipulator in the box's local frame should be (0.5f, 0.0f, 0.0f)
+        // after non-uniform scale, the manipulator position should be (2.0f, 0.0f, 0.0f)
+        // after the scale of the entity transform, the manipulator position should be (3.0f, 0.0f, 0.0f)
+        // after the rotation of the entity transform, the manipulator position should be (2.4f, 1.8f, 0.0f)
+        // after the translation of the entity transform, the manipulator position should be (4.4f, 4.8f, 4.0f)
+        const AZ::Vector3 worldStart(4.4f, 4.8f, 4.0f);
+
+        // position in world space to move to
+        const AZ::Vector3 worldEnd(6.8f, 6.6f, 4.0f);
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to the position of the x scale manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        AZ::Vector3 newBoxDimensions = AZ::Vector3::CreateZero();
+        BoxShapeComponentRequestsBus::EventResult(newBoxDimensions, m_entity->GetId(), &BoxShapeComponentRequests::GetBoxDimensions);
+
+        const AZ::Vector3 expectedBoxDimensions(2.0f, 2.0f, 2.5f);
+        // allow a reasonably high tolerance because we can't get better accuracy than the resolution of the viewport
+        EXPECT_THAT(newBoxDimensions, UnitTest::IsCloseTolerance(expectedBoxDimensions, 1e-2f));
+    }
 }
 
diff --git a/Gems/PhysX/Code/Editor/ColliderCapsuleMode.cpp b/Gems/PhysX/Code/Editor/ColliderCapsuleMode.cpp
index 0bc941b082..b704f8feec 100644
--- a/Gems/PhysX/Code/Editor/ColliderCapsuleMode.cpp
+++ b/Gems/PhysX/Code/Editor/ColliderCapsuleMode.cpp
@@ -8,11 +8,14 @@
 
 #include "ColliderCapsuleMode.h"
 #include <PhysX/EditorColliderComponentRequestBus.h>
+#include <Source/Utils.h>
 
 #include <AzToolsFramework/Manipulators/LinearManipulator.h>
 #include <AzToolsFramework/Manipulators/ManipulatorManager.h>
 #include <AzToolsFramework/ViewportSelection/EditorSelectionUtil.h>
+#include <AzToolsFramework/ComponentModes/BoxViewportEdit.h>
 #include <AzCore/Component/TransformBus.h>
+#include <AzCore/Component/NonUniformScaleBus.h>
 #include <AzFramework/Viewport/ViewportColors.h>
 #include <AzFramework/Viewport/ViewportConstants.h>
 
@@ -34,10 +37,15 @@ namespace PhysX
     void ColliderCapsuleMode::Setup(const AZ::EntityComponentIdPair& idPair)
     {
         AZ::Transform colliderWorldTransform = AZ::Transform::Identity();
-        PhysX::EditorColliderComponentRequestBus::EventResult(colliderWorldTransform, idPair, &PhysX::EditorColliderComponentRequests::GetColliderWorldTransform);
+        AZ::TransformBus::EventResult(colliderWorldTransform, idPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
 
-        SetupRadiusManipulator(idPair, colliderWorldTransform);
-        SetupHeightManipulator(idPair, colliderWorldTransform);
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+
+        SetupRadiusManipulator(idPair, colliderWorldTransform, colliderLocalTransform, nonUniformScale);
+        SetupHeightManipulator(idPair, colliderWorldTransform, colliderLocalTransform, nonUniformScale);
 
         AzFramework::EntityDebugDisplayEventBus::Handler::BusConnect(idPair.GetEntityId());
     }
@@ -45,7 +53,12 @@ namespace PhysX
     void ColliderCapsuleMode::Refresh(const AZ::EntityComponentIdPair& idPair)
     {
         AZ::Transform colliderWorldTransform = AZ::Transform::Identity();
-        PhysX::EditorColliderComponentRequestBus::EventResult(colliderWorldTransform, idPair, &PhysX::EditorColliderComponentRequests::GetColliderWorldTransform);
+        AZ::TransformBus::EventResult(colliderWorldTransform, idPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
+
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
+        AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
 
         // Read the state of the capsule into manipulators to support undo/redo
         float capsuleHeight = 0.0f;
@@ -55,9 +68,13 @@ namespace PhysX
         PhysX::EditorColliderComponentRequestBus::EventResult(capsuleRadius, idPair, &PhysX::EditorColliderComponentRequests::GetCapsuleRadius);
 
         m_radiusManipulator->SetSpace(colliderWorldTransform);
-        m_radiusManipulator->SetLocalPosition(m_radiusManipulator->GetAxis() * capsuleRadius);
+        m_radiusManipulator->SetLocalTransform(
+            colliderLocalTransform * AZ::Transform::CreateTranslation(m_radiusManipulator->GetAxis() * capsuleRadius));
+        m_radiusManipulator->SetNonUniformScale(nonUniformScale);
         m_heightManipulator->SetSpace(colliderWorldTransform);
-        m_heightManipulator->SetLocalPosition(m_heightManipulator->GetAxis() * capsuleHeight * HalfHeight);
+        m_heightManipulator->SetLocalTransform(
+            colliderLocalTransform * AZ::Transform::CreateTranslation(m_heightManipulator->GetAxis() * capsuleHeight * HalfHeight));
+        m_heightManipulator->SetNonUniformScale(nonUniformScale);
     }
 
     void ColliderCapsuleMode::Teardown(const AZ::EntityComponentIdPair& idPair)
@@ -83,13 +100,23 @@ namespace PhysX
         AZ_UNUSED(debugDisplay);
 
         const AzFramework::CameraState cameraState = AzToolsFramework::GetCameraState(viewportInfo.m_viewportId);
-        float radius = m_radiusManipulator->GetLocalPosition().GetLength();
 
-        m_radiusManipulator->SetAxis(cameraState.m_side);
-        m_radiusManipulator->SetLocalPosition(cameraState.m_side * radius);
+        if (!m_radiusManipulator->EntityComponentIdPairs().empty())
+        {
+            const AZ::EntityComponentIdPair idPair = *m_radiusManipulator->EntityComponentIdPairs().begin();
+            float radius = 0.0f;
+            PhysX::EditorColliderComponentRequestBus::EventResult(radius, idPair, &PhysX::EditorColliderComponentRequests::GetCapsuleRadius);
+            const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+            m_radiusManipulator->SetAxis(cameraState.m_side);
+            m_radiusManipulator->SetLocalTransform(colliderLocalTransform * AZ::Transform::CreateTranslation(cameraState.m_side * radius));
+        }
     }
 
-    void ColliderCapsuleMode::SetupRadiusManipulator(const AZ::EntityComponentIdPair& idPair, const AZ::Transform& worldTransform)
+    void ColliderCapsuleMode::SetupRadiusManipulator(
+        const AZ::EntityComponentIdPair& idPair,
+        const AZ::Transform& worldTransform,
+        const AZ::Transform& localTransform,
+        const AZ::Vector3& nonUniformScale)
     {
         // Radius manipulator
         float capsuleRadius = 0.0f;
@@ -99,7 +126,8 @@ namespace PhysX
         m_radiusManipulator->AddEntityComponentIdPair(idPair);
         m_radiusManipulator->SetAxis(RadiusManipulatorAxis);
         m_radiusManipulator->Register(AzToolsFramework::g_mainManipulatorManagerId);
-        m_radiusManipulator->SetLocalPosition(RadiusManipulatorAxis * capsuleRadius);
+        m_radiusManipulator->SetLocalTransform(localTransform * AZ::Transform::CreateTranslation(RadiusManipulatorAxis * capsuleRadius));
+        m_radiusManipulator->SetNonUniformScale(nonUniformScale);
 
         {
             AzToolsFramework::ManipulatorViews views;
@@ -114,7 +142,11 @@ namespace PhysX
         });
     }
 
-    void ColliderCapsuleMode::SetupHeightManipulator(const AZ::EntityComponentIdPair& idPair, const AZ::Transform& worldTransform)
+    void ColliderCapsuleMode::SetupHeightManipulator(
+        const AZ::EntityComponentIdPair& idPair,
+        const AZ::Transform& worldTransform,
+        const AZ::Transform& localTransform,
+        const AZ::Vector3& nonUniformScale)
     {
         // Height manipulator
         float capsuleHeight = 0.0f;
@@ -124,7 +156,9 @@ namespace PhysX
         m_heightManipulator->AddEntityComponentIdPair(idPair);
         m_heightManipulator->SetAxis(HeightManipulatorAxis);
         m_heightManipulator->Register(AzToolsFramework::g_mainManipulatorManagerId);
-        m_heightManipulator->SetLocalPosition(HeightManipulatorAxis * capsuleHeight * HalfHeight); // Manipulator positioned at half the capsules height.
+        m_heightManipulator->SetLocalTransform(
+            localTransform * AZ::Transform::CreateTranslation(HeightManipulatorAxis * capsuleHeight * HalfHeight));
+        m_heightManipulator->SetNonUniformScale(nonUniformScale);
 
         {
             AzToolsFramework::ManipulatorViews views;
@@ -137,19 +171,23 @@ namespace PhysX
         {
             OnHeightManipulatorMoved(action, idPair);
         });
-
     }
 
     void ColliderCapsuleMode::OnRadiusManipulatorMoved(const AzToolsFramework::LinearManipulator::Action& action, const AZ::EntityComponentIdPair& idPair)
     {
+        // manipulator action offsets do not take entity transform scale into account, so need to apply it here
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+        const AZ::Vector3 manipulatorPosition = AzToolsFramework::GetPositionInManipulatorFrame(
+            m_radiusManipulator->GetSpace().GetUniformScale(), colliderLocalTransform, action);
+
         // Get the distance the manipulator has moved along the axis.
-        float extent = action.LocalPosition().Dot(action.m_fixed.m_axis);
+        float extent = manipulatorPosition.Dot(action.m_fixed.m_axis);
 
         // Clamp radius to a small value.
         extent = AZ::GetMax(extent, MinCapsuleRadius);
 
         // Update the manipulator and capsule radius.
-        m_radiusManipulator->SetLocalPosition(extent * action.m_fixed.m_axis);
+        m_radiusManipulator->SetLocalTransform(colliderLocalTransform * AZ::Transform::CreateTranslation(extent * action.m_fixed.m_axis));
 
         // Adjust the height manipulator so it is always clamped to twice the radius.
         AdjustHeightManipulator(idPair, static_cast<float>(extent));
@@ -160,14 +198,19 @@ namespace PhysX
 
     void ColliderCapsuleMode::OnHeightManipulatorMoved(const AzToolsFramework::LinearManipulator::Action& action, const AZ::EntityComponentIdPair& idPair)
     {
+        // manipulator action offsets do not take entity transform scale into account, so need to apply it here
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+        const AZ::Vector3 manipulatorPosition = AzToolsFramework::GetPositionInManipulatorFrame(
+            m_heightManipulator->GetSpace().GetUniformScale(), colliderLocalTransform, action);
+
         // Get the distance the manipulator has moved along the axis.
-        float extent = action.LocalPosition().Dot(action.m_fixed.m_axis);
+        float extent = manipulatorPosition.Dot(action.m_fixed.m_axis);
 
         // Ensure capsule's half height is always greater than the radius.
         extent = AZ::GetMax(extent, MinCapsuleHeight);
 
         // Update the manipulator and capsule height.
-        m_heightManipulator->SetLocalPosition(extent * action.m_fixed.m_axis);
+        m_heightManipulator->SetLocalTransform(colliderLocalTransform * AZ::Transform::CreateTranslation(extent * action.m_fixed.m_axis));
 
         // The final height of the capsule is twice the manipulator's extent.
         float capsuleHeight = extent / HalfHeight;
@@ -188,7 +231,9 @@ namespace PhysX
         capsuleRadius = AZ::GetMin(capsuleRadius, capsuleHeight * HalfHeight);
 
         // Update manipulator and the capsule radius.
-        m_radiusManipulator->SetLocalPosition(capsuleRadius * m_radiusManipulator->GetAxis());
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+        m_radiusManipulator->SetLocalTransform(
+            colliderLocalTransform * AZ::Transform::CreateTranslation(capsuleRadius * m_radiusManipulator->GetAxis()));
         PhysX::EditorColliderComponentRequestBus::Event(idPair, &PhysX::EditorColliderComponentRequests::SetCapsuleRadius, capsuleRadius);
     }
 
@@ -201,7 +246,9 @@ namespace PhysX
         capsuleHeight = AZ::GetMax(capsuleHeight, capsuleRadius / HalfHeight);
 
         // Update the manipulator and capsule height.
-        m_heightManipulator->SetLocalPosition(capsuleHeight * HalfHeight * m_heightManipulator->GetAxis());
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+        m_heightManipulator->SetLocalTransform(
+            colliderLocalTransform * AZ::Transform::CreateTranslation(capsuleHeight * HalfHeight * m_heightManipulator->GetAxis()));
         PhysX::EditorColliderComponentRequestBus::Event(idPair, &PhysX::EditorColliderComponentRequests::SetCapsuleHeight, capsuleHeight);
     }
 }
diff --git a/Gems/PhysX/Code/Editor/ColliderCapsuleMode.h b/Gems/PhysX/Code/Editor/ColliderCapsuleMode.h
index ceedd84a35..5284b3d1ed 100644
--- a/Gems/PhysX/Code/Editor/ColliderCapsuleMode.h
+++ b/Gems/PhysX/Code/Editor/ColliderCapsuleMode.h
@@ -34,8 +34,16 @@ namespace PhysX
             const AzFramework::ViewportInfo& viewportInfo,
             AzFramework::DebugDisplayRequests& debugDisplay) override;
 
-        void SetupRadiusManipulator(const AZ::EntityComponentIdPair& idPair, const AZ::Transform& worldTransform);
-        void SetupHeightManipulator(const AZ::EntityComponentIdPair& idPair, const AZ::Transform& worldTransform);
+        void SetupRadiusManipulator(
+            const AZ::EntityComponentIdPair& idPair,
+            const AZ::Transform& worldTransform,
+            const AZ::Transform& localTransform,
+            const AZ::Vector3& nonUniformScale);
+        void SetupHeightManipulator(
+            const AZ::EntityComponentIdPair& idPair,
+            const AZ::Transform& worldTransform,
+            const AZ::Transform& localTransform,
+            const AZ::Vector3& nonUniformScale);
         void OnRadiusManipulatorMoved(const AzToolsFramework::LinearManipulator::Action& action, const AZ::EntityComponentIdPair& idPair);
         void OnHeightManipulatorMoved(const AzToolsFramework::LinearManipulator::Action& action, const AZ::EntityComponentIdPair& idPair);
         void AdjustRadiusManipulator(const AZ::EntityComponentIdPair& idPair, const float capsuleHeight);
diff --git a/Gems/PhysX/Code/Editor/ColliderOffsetMode.cpp b/Gems/PhysX/Code/Editor/ColliderOffsetMode.cpp
index 21f27e4622..2c9b90d5b3 100644
--- a/Gems/PhysX/Code/Editor/ColliderOffsetMode.cpp
+++ b/Gems/PhysX/Code/Editor/ColliderOffsetMode.cpp
@@ -10,6 +10,7 @@
 #include <PhysX/EditorColliderComponentRequestBus.h>
 
 #include <AzToolsFramework/Manipulators/ManipulatorManager.h>
+#include <AzCore/Component/NonUniformScaleBus.h>
 #include <AzCore/Component/TransformBus.h>
 #include <AzCore/Component/ComponentBus.h>
 
@@ -28,10 +29,14 @@ namespace PhysX
         AZ::Transform worldTransform;
         AZ::TransformBus::EventResult(worldTransform, idPair.GetEntityId(), &AZ::TransformInterface::GetWorldTM);
 
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
         AZ::Vector3 colliderOffset;
         PhysX::EditorColliderComponentRequestBus::EventResult(colliderOffset, idPair, &PhysX::EditorColliderComponentRequests::GetColliderOffset);
 
         m_translationManipulators.SetSpace(worldTransform);
+        m_translationManipulators.SetNonUniformScale(nonUniformScale);
         m_translationManipulators.SetLocalPosition(colliderOffset);
         m_translationManipulators.AddEntityComponentIdPair(idPair);
         m_translationManipulators.Register(AzToolsFramework::g_mainManipulatorManagerId);
@@ -40,19 +45,19 @@ namespace PhysX
         m_translationManipulators.InstallLinearManipulatorMouseMoveCallback([this, idPair](
             const AzToolsFramework::LinearManipulator::Action& action)
         {
-            OnManipulatorMoved(action.LocalPosition(), idPair);
+            OnManipulatorMoved(action.m_start.m_localPosition, action.m_current.m_localPositionOffset, idPair);
         });
 
         m_translationManipulators.InstallPlanarManipulatorMouseMoveCallback([this, idPair](
             const AzToolsFramework::PlanarManipulator::Action& action)
         {
-            OnManipulatorMoved(action.LocalPosition(), idPair);
+            OnManipulatorMoved(action.m_start.m_localPosition, action.m_current.m_localOffset, idPair);
         });
 
         m_translationManipulators.InstallSurfaceManipulatorMouseMoveCallback([this, idPair](
             const AzToolsFramework::SurfaceManipulator::Action& action)
         {
-            OnManipulatorMoved(action.LocalPosition(), idPair);
+            OnManipulatorMoved(action.m_start.m_localPosition, action.m_current.m_localOffset, idPair);
         });
     }
 
@@ -69,10 +74,14 @@ namespace PhysX
         m_translationManipulators.Unregister();
     }
 
-    void ColliderOffsetMode::OnManipulatorMoved(const AZ::Vector3& position, const AZ::EntityComponentIdPair& idPair)
+    void ColliderOffsetMode::OnManipulatorMoved(const AZ::Vector3& startPosition, const AZ::Vector3& offset, const AZ::EntityComponentIdPair& idPair)
     {
-        m_translationManipulators.SetLocalPosition(position);
-        PhysX::EditorColliderComponentRequestBus::Event(idPair, &PhysX::EditorColliderComponentRequests::SetColliderOffset, position);
+        AZ::Transform worldTransform = AZ::Transform::CreateIdentity();
+        AZ::TransformBus::EventResult(worldTransform, idPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
+        const float scale = AZ::GetMax(AZ::MinTransformScale, worldTransform.GetUniformScale());
+        const AZ::Vector3 newPosition = startPosition + offset / scale;
+        m_translationManipulators.SetLocalPosition(newPosition);
+        PhysX::EditorColliderComponentRequestBus::Event(idPair, &PhysX::EditorColliderComponentRequests::SetColliderOffset, newPosition);
     }
 
     void ColliderOffsetMode::ResetValues(const AZ::EntityComponentIdPair& idPair)
diff --git a/Gems/PhysX/Code/Editor/ColliderOffsetMode.h b/Gems/PhysX/Code/Editor/ColliderOffsetMode.h
index 6a2e6a8a12..525000a1b1 100644
--- a/Gems/PhysX/Code/Editor/ColliderOffsetMode.h
+++ b/Gems/PhysX/Code/Editor/ColliderOffsetMode.h
@@ -28,7 +28,8 @@ namespace PhysX
         void ResetValues(const AZ::EntityComponentIdPair& idPair) override;
 
     private:
-        void OnManipulatorMoved(const AZ::Vector3& position, const AZ::EntityComponentIdPair& idPair);
+        void OnManipulatorMoved(
+            const AZ::Vector3& startPosition, const AZ::Vector3& offset, const AZ::EntityComponentIdPair& idPair);
 
         AzToolsFramework::TranslationManipulators m_translationManipulators;
     };
diff --git a/Gems/PhysX/Code/Editor/ColliderRotationMode.cpp b/Gems/PhysX/Code/Editor/ColliderRotationMode.cpp
index 5f3c98bcee..d39fd001e4 100644
--- a/Gems/PhysX/Code/Editor/ColliderRotationMode.cpp
+++ b/Gems/PhysX/Code/Editor/ColliderRotationMode.cpp
@@ -10,6 +10,7 @@
 #include <PhysX/EditorColliderComponentRequestBus.h>
 #include <AzToolsFramework/Manipulators/ManipulatorManager.h>
 #include <AzCore/Component/TransformBus.h>
+#include <AzCore/Component/NonUniformScaleBus.h>
 #include <AzFramework/Viewport/ViewportColors.h>
 #include <AzToolsFramework/Manipulators/AngularManipulator.h>
 #include <AzToolsFramework/ViewportSelection/EditorSelectionUtil.h>
@@ -29,6 +30,9 @@ namespace PhysX
         AZ::Transform worldTransform;
         AZ::TransformBus::EventResult(worldTransform, idPair.GetEntityId(), &AZ::TransformInterface::GetWorldTM);
 
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
         AZ::Quaternion colliderRotation;
         PhysX::EditorColliderComponentRequestBus::EventResult(colliderRotation, idPair, &PhysX::EditorColliderComponentRequests::GetColliderRotation);
 
@@ -36,7 +40,8 @@ namespace PhysX
         PhysX::EditorColliderComponentRequestBus::EventResult(colliderOffset, idPair, &PhysX::EditorColliderComponentRequests::GetColliderOffset);
 
         m_rotationManipulators.SetSpace(worldTransform);
-        m_rotationManipulators.SetLocalPosition(colliderOffset);
+        m_rotationManipulators.SetNonUniformScale(nonUniformScale);
+        m_rotationManipulators.SetLocalPosition(nonUniformScale * colliderOffset);
         m_rotationManipulators.SetLocalOrientation(colliderRotation);
         m_rotationManipulators.AddEntityComponentIdPair(idPair);
         m_rotationManipulators.Register(AzToolsFramework::g_mainManipulatorManagerId);       
@@ -70,7 +75,11 @@ namespace PhysX
 
         AZ::Vector3 colliderOffset = AZ::Vector3::CreateZero();
         PhysX::EditorColliderComponentRequestBus::EventResult(colliderOffset, idPair, &PhysX::EditorColliderComponentRequests::GetColliderOffset);
-        m_rotationManipulators.SetLocalPosition(colliderOffset);
+
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
+        m_rotationManipulators.SetLocalPosition(nonUniformScale * colliderOffset);
     }
 
     void ColliderRotationMode::Teardown(const AZ::EntityComponentIdPair& idPair)
diff --git a/Gems/PhysX/Code/Editor/ColliderSphereMode.cpp b/Gems/PhysX/Code/Editor/ColliderSphereMode.cpp
index ba0fd76ea9..8d69e28726 100644
--- a/Gems/PhysX/Code/Editor/ColliderSphereMode.cpp
+++ b/Gems/PhysX/Code/Editor/ColliderSphereMode.cpp
@@ -8,11 +8,14 @@
 
 #include "ColliderSphereMode.h"
 #include <PhysX/EditorColliderComponentRequestBus.h>
+#include <Source/Utils.h>
 
 #include <AzToolsFramework/Manipulators/LinearManipulator.h>
 #include <AzToolsFramework/Manipulators/ManipulatorManager.h>
 #include <AzToolsFramework/ViewportSelection/EditorSelectionUtil.h>
+#include <AzToolsFramework/ComponentModes/BoxViewportEdit.h>
 #include <AzCore/Component/TransformBus.h>
+#include <AzCore/Component/NonUniformScaleBus.h>
 #include <AzCore/Math/ToString.h>
 #include <AzFramework/Viewport/ViewportColors.h>
 #include <AzFramework/Viewport/ViewportConstants.h>
@@ -27,7 +30,12 @@ namespace PhysX
     void ColliderSphereMode::Setup(const AZ::EntityComponentIdPair& idPair)
     {
         AZ::Transform colliderWorldTransform = AZ::Transform::Identity();
-        PhysX::EditorColliderComponentRequestBus::EventResult(colliderWorldTransform, idPair, &PhysX::EditorColliderComponentRequests::GetColliderWorldTransform);
+        AZ::TransformBus::EventResult(colliderWorldTransform, idPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
+
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
 
         float sphereRadius = 0.0f;
         PhysX::EditorColliderComponentRequestBus::EventResult(sphereRadius, idPair, &PhysX::EditorColliderComponentRequests::GetSphereRadius);
@@ -36,7 +44,9 @@ namespace PhysX
         m_radiusManipulator->AddEntityComponentIdPair(idPair);
         m_radiusManipulator->SetAxis(ManipulatorAxis);
         m_radiusManipulator->Register(AzToolsFramework::g_mainManipulatorManagerId);
-        m_radiusManipulator->SetLocalPosition(ManipulatorAxis * sphereRadius);
+        m_radiusManipulator->SetLocalTransform(colliderLocalTransform * AZ::Transform::CreateTranslation(ManipulatorAxis * sphereRadius));
+        m_radiusManipulator->SetNonUniformScale(nonUniformScale);
+        m_radiusManipulator->SetBoundsDirty();
 
         AzToolsFramework::ManipulatorViews views;
         views.emplace_back(AzToolsFramework::CreateManipulatorViewQuadBillboard(AzFramework::ViewportColors::DefaultManipulatorHandleColor, AzFramework::ViewportConstants::DefaultManipulatorHandleSize));
@@ -53,12 +63,18 @@ namespace PhysX
     void ColliderSphereMode::Refresh(const AZ::EntityComponentIdPair& idPair)
     {
         AZ::Transform colliderWorldTransform = AZ::Transform::Identity();
-        PhysX::EditorColliderComponentRequestBus::EventResult(colliderWorldTransform, idPair, &PhysX::EditorColliderComponentRequests::GetColliderWorldTransform);
+        AZ::TransformBus::EventResult(colliderWorldTransform, idPair.GetEntityId(), &AZ::TransformBus::Events::GetWorldTM);
         m_radiusManipulator->SetSpace(colliderWorldTransform);
 
+        AZ::Vector3 nonUniformScale = AZ::Vector3::CreateOne();
+        AZ::NonUniformScaleRequestBus::EventResult(nonUniformScale, idPair.GetEntityId(), &AZ::NonUniformScaleRequests::GetScale);
+
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+
         float sphereRadius = 0.0f;
         PhysX::EditorColliderComponentRequestBus::EventResult(sphereRadius, idPair, &PhysX::EditorColliderComponentRequests::GetSphereRadius);
-        m_radiusManipulator->SetLocalPosition(ManipulatorAxis * sphereRadius);
+        m_radiusManipulator->SetLocalTransform(colliderLocalTransform * AZ::Transform::CreateTranslation(ManipulatorAxis * sphereRadius));
+        m_radiusManipulator->SetBoundsDirty();
     }
 
     void ColliderSphereMode::Teardown(const AZ::EntityComponentIdPair& idPair)
@@ -80,22 +96,34 @@ namespace PhysX
         AZ_UNUSED(debugDisplay);
 
         const AzFramework::CameraState cameraState = AzToolsFramework::GetCameraState(viewportInfo.m_viewportId);
-        float radius = m_radiusManipulator->GetLocalPosition().GetLength();
 
-        m_radiusManipulator->SetAxis(cameraState.m_side);
-        m_radiusManipulator->SetLocalPosition(cameraState.m_side * radius);
+        if (!m_radiusManipulator->EntityComponentIdPairs().empty())
+        {
+            const AZ::EntityComponentIdPair idPair = *m_radiusManipulator->EntityComponentIdPairs().begin();
+            float radius = 0.0f;
+            PhysX::EditorColliderComponentRequestBus::EventResult(radius, idPair, &PhysX::EditorColliderComponentRequests::GetSphereRadius);
+            const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+            m_radiusManipulator->SetAxis(cameraState.m_side);
+            m_radiusManipulator->SetLocalTransform(colliderLocalTransform * AZ::Transform::CreateTranslation(cameraState.m_side * radius));
+        }
     }
 
     void ColliderSphereMode::OnManipulatorMoved(const AzToolsFramework::LinearManipulator::Action& action, const AZ::EntityComponentIdPair& idPair)
     {
+        // manipulator offsets do not take transform scale into account, need to handle it here
+        const AZ::Transform colliderLocalTransform = Utils::GetColliderLocalTransform(idPair);
+        const AZ::Vector3 manipulatorPosition = AzToolsFramework::GetPositionInManipulatorFrame(
+            m_radiusManipulator->GetSpace().GetUniformScale(), colliderLocalTransform, action);
+
         // Get the distance the manipulator has moved along the axis.
-        float extent = action.LocalPosition().Dot(action.m_fixed.m_axis);
+        float extent = manipulatorPosition.Dot(action.m_fixed.m_axis);
 
         // Clamp the distance to a small value to prevent it going negative.
         extent = AZ::GetMax(extent, MinSphereRadius);
 
         // Update the manipulator and sphere radius
-        m_radiusManipulator->SetLocalPosition(extent * action.m_fixed.m_axis);
+        m_radiusManipulator->SetLocalTransform(
+            Utils::GetColliderLocalTransform(idPair) * AZ::Transform::CreateTranslation(extent * action.m_fixed.m_axis));
         PhysX::EditorColliderComponentRequestBus::Event(idPair, &PhysX::EditorColliderComponentRequests::SetSphereRadius, extent);
     }
 }
diff --git a/Gems/PhysX/Code/Source/EditorColliderComponent.cpp b/Gems/PhysX/Code/Source/EditorColliderComponent.cpp
index 69ae037e07..d432655e78 100644
--- a/Gems/PhysX/Code/Source/EditorColliderComponent.cpp
+++ b/Gems/PhysX/Code/Source/EditorColliderComponent.cpp
@@ -582,9 +582,8 @@ namespace PhysX
 
     AZ::Transform EditorColliderComponent::GetColliderLocalTransform() const
     {
-        const AZ::Vector3 nonUniformScale = Utils::GetTransformScale(GetEntityId());
         return AZ::Transform::CreateFromQuaternionAndTranslation(
-            m_configuration.m_rotation, m_configuration.m_position * nonUniformScale);
+            m_configuration.m_rotation, m_configuration.m_position);
     }
 
     void EditorColliderComponent::UpdateMeshAsset()
@@ -970,8 +969,10 @@ namespace PhysX
                     static_cast<const Physics::CookedMeshShapeConfiguration*>(shapeConfiguration);
 
                 const AZ::Vector3 overallScale = Utils::GetTransformScale(GetEntityId()) * m_cachedNonUniformScale * assetScale;
+                Physics::ColliderConfiguration nonUniformScaledColliderConfiguration = *colliderConfiguration;
+                nonUniformScaledColliderConfiguration.m_position *= m_cachedNonUniformScale;
 
-                m_colliderDebugDraw.DrawMesh(debugDisplay, *colliderConfiguration, *cookedMeshShapeConfiguration,
+                m_colliderDebugDraw.DrawMesh(debugDisplay, nonUniformScaledColliderConfiguration, *cookedMeshShapeConfiguration,
                     overallScale, static_cast<AZ::u32>(shapeIndex));
                 break;
             }
@@ -1054,12 +1055,17 @@ namespace PhysX
 
     AZ::Transform EditorColliderComponent::GetCurrentTransform()
     {
-        return GetColliderWorldTransform();
+        return GetWorldTM();
+    }
+
+    AZ::Transform EditorColliderComponent::GetCurrentLocalTransform()
+    {
+        return GetColliderLocalTransform();
     }
 
     AZ::Vector3 EditorColliderComponent::GetBoxScale()
     {
-        return AZ::Vector3(GetWorldTM().GetUniformScale());
+        return AZ::Vector3::CreateOne();
     }
 
     void EditorColliderComponent::OnTransformChanged(const AZ::Transform& /*local*/, const AZ::Transform& world)
@@ -1203,7 +1209,7 @@ namespace PhysX
 
     AZ::Transform EditorColliderComponent::GetColliderWorldTransform()
     {
-        return AzToolsFramework::TransformNormalizedScale(GetWorldTM()) * GetColliderLocalTransform();
+        return GetWorldTM() * GetColliderLocalTransform();
     }
 
     bool EditorColliderComponent::ShouldUpdateCollisionMeshFromRender() const
diff --git a/Gems/PhysX/Code/Source/EditorColliderComponent.h b/Gems/PhysX/Code/Source/EditorColliderComponent.h
index 773dd0a9b8..bc3d4da6d9 100644
--- a/Gems/PhysX/Code/Source/EditorColliderComponent.h
+++ b/Gems/PhysX/Code/Source/EditorColliderComponent.h
@@ -171,6 +171,7 @@ namespace PhysX
         AZ::Vector3 GetDimensions() override;
         void SetDimensions(const AZ::Vector3& dimensions) override;
         AZ::Transform GetCurrentTransform() override;
+        AZ::Transform GetCurrentLocalTransform() override;
         AZ::Vector3 GetBoxScale() override;
 
         // AZ::Render::MeshComponentNotificationBus
diff --git a/Gems/PhysX/Code/Source/Utils.cpp b/Gems/PhysX/Code/Source/Utils.cpp
index cc4ef2a12c..9848ab0415 100644
--- a/Gems/PhysX/Code/Source/Utils.cpp
+++ b/Gems/PhysX/Code/Source/Utils.cpp
@@ -29,6 +29,7 @@
 #include <AzFramework/Physics/HeightfieldProviderBus.h>
 
 #include <PhysX/ColliderShapeBus.h>
+#include <PhysX/EditorColliderComponentRequestBus.h>
 #include <PhysX/SystemComponentBus.h>
 #include <PhysX/MeshAsset.h>
 #include <PhysX/Utils.h>
@@ -832,6 +833,17 @@ namespace PhysX
             return AZ::Transform::CreateFromQuaternionAndTranslation(colliderRelativeRotation, colliderRelativePosition);
         }
 
+        AZ::Transform GetColliderLocalTransform(const AZ::EntityComponentIdPair& idPair)
+        {
+            AZ::Quaternion colliderRotation = AZ::Quaternion::CreateIdentity();
+            PhysX::EditorColliderComponentRequestBus::EventResult(colliderRotation, idPair, &PhysX::EditorColliderComponentRequests::GetColliderRotation);
+
+            AZ::Vector3 colliderOffset = AZ::Vector3::CreateZero();
+            PhysX::EditorColliderComponentRequestBus::EventResult(colliderOffset, idPair, &PhysX::EditorColliderComponentRequests::GetColliderOffset);
+
+            return AZ::Transform::CreateFromQuaternionAndTranslation(colliderRotation, colliderOffset);
+        }
+
         AZ::Transform GetColliderWorldTransform(const AZ::Transform& worldTransform,
             const AZ::Vector3& colliderRelativePosition,
             const AZ::Quaternion& colliderRelativeRotation)
diff --git a/Gems/PhysX/Code/Source/Utils.h b/Gems/PhysX/Code/Source/Utils.h
index 5244926aa2..f9e25a59f2 100644
--- a/Gems/PhysX/Code/Source/Utils.h
+++ b/Gems/PhysX/Code/Source/Utils.h
@@ -142,6 +142,9 @@ namespace PhysX
         AZ::Transform GetColliderLocalTransform(const AZ::Vector3& colliderRelativePosition
             , const AZ::Quaternion& colliderRelativeRotation);
 
+        //! Gets the local transform for a collider (the position and rotation relative to its entity).
+        AZ::Transform GetColliderLocalTransform(const AZ::EntityComponentIdPair& idPair);
+
         //! Combines collider position and orientation offsets and world transform to a transform.
         AZ::Transform GetColliderWorldTransform(const AZ::Transform& worldTransform
             , const AZ::Vector3& colliderRelativePosition
diff --git a/Gems/PhysX/Code/Tests/PhysXColliderComponentModeTests.cpp b/Gems/PhysX/Code/Tests/PhysXColliderComponentModeTests.cpp
index 5722d1a397..a9797d3d53 100644
--- a/Gems/PhysX/Code/Tests/PhysXColliderComponentModeTests.cpp
+++ b/Gems/PhysX/Code/Tests/PhysXColliderComponentModeTests.cpp
@@ -17,7 +17,9 @@
 #include <AzToolsFramework/ViewportSelection/EditorSelectionUtil.h>
 #include <AzToolsFramework/Entity/EditorEntityHelpers.h>
 #include <AzToolsFramework/ViewportUi/ViewportUiManager.h>
+#include <AzToolsFramework/ToolsComponents/EditorNonUniformScaleComponent.h>
 #include <Tests/Viewport/ViewportUiManagerTests.cpp>
+#include <EditorColliderComponent.h>
 
 namespace UnitTest
 {
@@ -437,4 +439,378 @@ namespace UnitTest
         EXPECT_NEAR(assetScale.GetY(), 1.0f, tolerance);
         EXPECT_NEAR(assetScale.GetZ(), 1.0f, tolerance);
     }
+
+    class PhysXEditorColliderComponentFixture : public UnitTest::ToolsApplicationFixture
+    {
+    public:
+        void SetUpEditorFixtureImpl() override;
+        void TearDownEditorFixtureImpl() override;
+        void SetupTransform(const AZ::Quaternion& rotation, const AZ::Vector3& translation, float uniformScale);
+        void SetupCollider(
+            const Physics::ShapeConfiguration& shapeConfiguration,
+            const AZ::Quaternion& colliderRotation,
+            const AZ::Vector3& colliderOffset);
+        void SetupNonUniformScale(const AZ::Vector3& nonUniformScale);
+        void EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode subMode);
+
+        AZ::Entity* m_entity = nullptr;
+        AZ::EntityComponentIdPair m_idPair;
+    };
+
+    void PhysXEditorColliderComponentFixture::SetUpEditorFixtureImpl()
+    {
+        AZ::SerializeContext* serializeContext = nullptr;
+        AZ::ComponentApplicationBus::BroadcastResult(serializeContext, &AZ::ComponentApplicationBus::Events::GetSerializeContext);
+
+        UnitTest::CreateDefaultEditorEntity("EditorColliderComponentEntity", &m_entity);
+    }
+
+    void PhysXEditorColliderComponentFixture::TearDownEditorFixtureImpl()
+    {
+        AzToolsFramework::EditorEntityContextRequestBus::Broadcast(
+            &AzToolsFramework::EditorEntityContextRequestBus::Events::DestroyEditorEntity, m_entity->GetId());
+        m_entity = nullptr;
+    }
+
+    void PhysXEditorColliderComponentFixture::SetupTransform(
+        const AZ::Quaternion& rotation, const AZ::Vector3& translation, float uniformScale)
+    {
+        const AZ::Transform transform = AZ::Transform::CreateFromQuaternionAndTranslation(rotation, translation);
+        AZ::TransformBus::Event(m_entity->GetId(), &AZ::TransformBus::Events::SetWorldTM, transform);
+        AZ::TransformBus::Event(m_entity->GetId(), &AZ::TransformBus::Events::SetLocalUniformScale, uniformScale);
+    }
+
+    void PhysXEditorColliderComponentFixture::SetupCollider(
+        const Physics::ShapeConfiguration& shapeConfiguration, const AZ::Quaternion& colliderRotation, const AZ::Vector3& colliderOffset)
+    {
+        m_entity->Deactivate();
+        auto* colliderComponent =
+            m_entity->CreateComponent<PhysX::EditorColliderComponent>(Physics::ColliderConfiguration(), shapeConfiguration);
+        m_entity->Activate();
+        m_idPair = AZ::EntityComponentIdPair(m_entity->GetId(), colliderComponent->GetId());
+        PhysX::EditorColliderComponentRequestBus::Event(
+            m_idPair, &PhysX::EditorColliderComponentRequests::SetColliderOffset, colliderOffset);
+        PhysX::EditorColliderComponentRequestBus::Event(
+            m_idPair, &PhysX::EditorColliderComponentRequests::SetColliderRotation, colliderRotation);
+    }
+
+    void PhysXEditorColliderComponentFixture::SetupNonUniformScale(const AZ::Vector3& nonUniformScale)
+    {
+        m_entity->Deactivate();
+        m_entity->CreateComponent(AzToolsFramework::Components::EditorNonUniformScaleComponent::RTTI_Type());
+        m_entity->Activate();
+        AZ::NonUniformScaleRequestBus::Event(m_entity->GetId(), &AZ::NonUniformScaleRequests::SetScale, nonUniformScale);
+    }
+
+    void PhysXEditorColliderComponentFixture::EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode subMode)
+    {
+        AzToolsFramework::SelectEntity(m_entity->GetId());
+        EnterComponentMode<PhysX::EditorColliderComponent>();
+        PhysX::ColliderComponentModeRequestBus::Broadcast(&PhysX::ColliderComponentModeRequests::SetCurrentMode, subMode);
+    }
+
+    using PhysXEditorColliderComponentManipulatorFixture =
+        UnitTest::IndirectCallManipulatorViewportInteractionFixtureMixin<PhysXEditorColliderComponentFixture>;
+
+    // use a reasonably large tolerance because manipulator precision is limited by viewport resolution
+    static const float ManipulatorTolerance = 0.01f;
+
+    TEST_F(PhysXEditorColliderComponentManipulatorFixture, OffsetManipulatorsCorrectlyLocatedRelativeToCollider)
+    {
+        const AZ::Vector3 boxDimensions(2.0f, 3.0f, 1.5f);
+        const AZ::Quaternion boxRotation(0.1f, 0.1f, 0.7f, 0.7f);
+        const AZ::Vector3 boxOffset(3.0f, 1.0f, 2.0f);
+        SetupCollider(Physics::BoxShapeConfiguration(boxDimensions), boxRotation, boxOffset);
+        const AZ::Quaternion entityRotation(0.8f, 0.2f, 0.4f, 0.4f);
+        const AZ::Vector3 entityTranslation(2.0f, -3.0f, 0.5f);
+        const float uniformScale = 2.0f;
+        SetupTransform(entityRotation, entityTranslation, uniformScale);
+        EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode::Offset);
+
+        // the expected position of the collider centre based on the combination of entity transform and collider offset
+        const AZ::Vector3 expectedColliderPosition(8.8f, -2.28f, 3.54f);
+
+        // the expected world space direction of the collider offset x-axis based on the entity transform
+        const AZ::Vector3 expectedXAxis(0.6f, 0.64f, 0.48f);
+
+        // position the camera to look down at the collider from above
+        AzFramework::SetCameraTransform(
+            m_cameraState,
+            AZ::Transform::CreateFromQuaternionAndTranslation(
+                AZ::Quaternion::CreateRotationX(-AZ::Constants::HalfPi), expectedColliderPosition + AZ::Vector3::CreateAxisZ(10.0f)));
+
+        // position in world space, slightly moved along the x-axis in order to grab the x translation manipulator
+        const AZ::Vector3 worldStart = expectedColliderPosition + 0.5f * expectedXAxis;
+
+        // position in world space to move to
+        const AZ::Vector3 worldEnd = worldStart + 2.0f * expectedXAxis;
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to the position of the x offset manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        AZ::Vector3 newColliderOffset = AZ::Vector3::CreateZero();
+        PhysX::EditorColliderComponentRequestBus::EventResult(
+            newColliderOffset, m_idPair, &PhysX::EditorColliderComponentRequests::GetColliderOffset);
+
+        EXPECT_THAT(newColliderOffset, IsCloseTolerance(AZ::Vector3(4.0f, 1.0f, 2.0f), ManipulatorTolerance));
+    }
+
+    TEST_F(PhysXEditorColliderComponentManipulatorFixture, OffsetManipulatorsCorrectlyLocatedRelativeToColliderWithNonUniformScale)
+    {
+        const float capsuleRadius = 0.5f;
+        const float capsuleHeight = 2.0f;
+        const AZ::Quaternion capsuleRotation(0.2f, -0.4f, 0.8f, 0.4f);
+        const AZ::Vector3 capsuleOffset(-2.0f, 3.0f, -1.0f);
+        SetupCollider(Physics::CapsuleShapeConfiguration(capsuleHeight, capsuleRadius), capsuleRotation, capsuleOffset);
+        const AZ::Quaternion entityRotation(-0.1f, 0.7f, -0.7f, 0.1f);
+        const AZ::Vector3 entityTranslation(-1.0f, 1.0f, -2.5f);
+        const float uniformScale = 1.5f;
+        SetupTransform(entityRotation, entityTranslation, uniformScale);
+        const AZ::Vector3 nonUniformScale(2.0f, 0.5f, 1.5f);
+        SetupNonUniformScale(nonUniformScale);
+        EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode::Offset);
+
+        // the expected position of the collider centre based on the combination of entity transform, collider offset and non-uniform scale
+        const AZ::Vector3 expectedColliderPosition(4.13f, 4.84f, -4.75f);
+
+        // the expected world space direction of the collider offset z-axis based on the entity transform
+        const AZ::Vector3 expectedZAxis(0.28f, -0.96f, 0.0f);
+
+        // position the camera to look at the collider from underneath
+        AzFramework::SetCameraTransform(
+            m_cameraState,
+            AZ::Transform::CreateFromQuaternionAndTranslation(
+                AZ::Quaternion::CreateRotationX(AZ::Constants::HalfPi), expectedColliderPosition - AZ::Vector3::CreateAxisZ(10.0f)));
+
+        // position in world space, slightly moved along the z-axis in order to grab the z translation manipulator
+        // need to go in the negative z direction because the camera angle causes the manipulator to flip
+        const AZ::Vector3 worldStart = expectedColliderPosition - 0.5f * expectedZAxis;
+
+        // position in world space to move to
+        const AZ::Vector3 worldEnd = worldStart - 2.25f * expectedZAxis;
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to the position of the z offset manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        AZ::Vector3 newColliderOffset = AZ::Vector3::CreateZero();
+        PhysX::EditorColliderComponentRequestBus::EventResult(
+            newColliderOffset, m_idPair, &PhysX::EditorColliderComponentRequests::GetColliderOffset);
+
+        EXPECT_THAT(newColliderOffset, IsCloseTolerance(AZ::Vector3(-2.0f, 3.0f, -2.0f), ManipulatorTolerance));
+    }
+
+    TEST_F(PhysXEditorColliderComponentManipulatorFixture, BoxColliderScaleManipulatorsCorrectlyLocatedRelativeToColliderWithNonUniformScale)
+    {
+        const AZ::Vector3 boxDimensions(2.0f, 2.0f, 3.0f);
+        const AZ::Quaternion boxRotation(0.7f, 0.7f, -0.1f, 0.1f);
+        const AZ::Vector3 boxOffset(0.5f, 1.5f, 2.0f);
+        SetupCollider(Physics::BoxShapeConfiguration(boxDimensions), boxRotation, boxOffset);
+        const AZ::Quaternion entityRotation(0.2f, 0.4f, -0.4f, 0.8f);
+        const AZ::Vector3 entityTranslation(2.0f, -3.0f, -2.0f);
+        const float uniformScale = 0.5f;
+        SetupTransform(entityRotation, entityTranslation, uniformScale);
+        const AZ::Vector3 nonUniformScale(3.0f, 1.5f, 2.5f);
+        SetupNonUniformScale(nonUniformScale);
+        EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode::Dimensions);
+
+        // the expected position of the collider centre based on the combination of entity transform, collider offset and non-uniform scale
+        const AZ::Vector3 expectedColliderPosition(4.37f, -4.285f, -1.1f);
+
+        // the expected position of the y scale manipulator relative to the centre of the collider, based on collider
+        // rotation, entity rotation and scale, and non-uniform scale
+        const AZ::Vector3 scaleManipulatorYDelta(0.54f, -0.72f, -1.2f);
+
+        // position the camera to look at the collider along the x-y diagonal
+        AzFramework::SetCameraTransform(
+            m_cameraState,
+            AZ::Transform::CreateFromQuaternionAndTranslation(
+                AZ::Quaternion::CreateRotationZ(-AZ::Constants::QuarterPi), expectedColliderPosition - AZ::Vector3(2.0f, 2.0f, 0.0f)));
+
+        const AZ::Vector3 worldStart = expectedColliderPosition + scaleManipulatorYDelta;
+        const AZ::Vector3 worldEnd = worldStart + 0.1f * scaleManipulatorYDelta;
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to the position of the y scale manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        AZ::Vector3 newBoxDimensions = AZ::Vector3::CreateZero();
+        AzToolsFramework::BoxManipulatorRequestBus::EventResult(
+            newBoxDimensions, m_idPair, &AzToolsFramework::BoxManipulatorRequests::GetDimensions);
+
+        EXPECT_THAT(newBoxDimensions, IsCloseTolerance(AZ::Vector3(2.0f, 2.2f, 3.0f), ManipulatorTolerance));
+    }
+
+    TEST_F(PhysXEditorColliderComponentManipulatorFixture, SphereColliderScaleManipulatorsCorrectlyLocatedRelativeToColliderWithNonUniformScale)
+    {
+        const float sphereRadius = 1.0f;
+        const AZ::Quaternion sphereRotation(-0.1f, 0.7f, -0.7f, 0.1f);
+        const AZ::Vector3 sphereOffset(-2.0f, 1.0f, -3.0f);
+        SetupCollider(Physics::SphereShapeConfiguration(sphereRadius), sphereRotation, sphereOffset);
+        const AZ::Quaternion entityRotation(-0.4f, -0.2f, 0.4f, 0.8f);
+        const AZ::Vector3 entityTranslation(-1.0f, -3.0f, 3.0f);
+        const float uniformScale = 1.5f;
+        SetupTransform(entityRotation, entityTranslation, uniformScale);
+        const AZ::Vector3 nonUniformScale(1.5f, 0.5f, 2.0f);
+        SetupNonUniformScale(nonUniformScale);
+        EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode::Dimensions);
+
+        // the expected position of the collider centre based on the combination of entity transform, collider offset and non-uniform scale
+        const AZ::Vector3 expectedColliderPosition(1.7f, -10.65f, -3.0f);
+
+        // position the camera to look at the collider along the y-axis
+        AzFramework::SetCameraTransform(
+            m_cameraState, AZ::Transform::CreateTranslation(expectedColliderPosition - AZ::Vector3(0.0f, 5.0f, 0.0f)));
+
+        // the expected position of the scale manipulator relative to the centre of the collider, based on collider
+        // rotation, entity scale, non-uniform scale and camera state
+        const AZ::Vector3 scaleManipulatorDelta(-1.1952f, -1.8036f, 0.168f);
+
+        const AZ::Vector3 worldStart = expectedColliderPosition + scaleManipulatorDelta;
+        const AZ::Vector3 worldEnd = worldStart - 0.1f * scaleManipulatorDelta;
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to the position of the y scale manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        float newSphereRadius = 0.0f;
+        PhysX::EditorColliderComponentRequestBus::EventResult(
+            newSphereRadius, m_idPair, &PhysX::EditorColliderComponentRequests::GetSphereRadius);
+
+        EXPECT_NEAR(newSphereRadius, 0.9f, ManipulatorTolerance);
+    }
+
+    TEST_F(PhysXEditorColliderComponentManipulatorFixture, CapsuleColliderScaleManipulatorsCorrectlyLocatedRelativeToColliderWithNonUniformScale)
+    {
+        const float capsuleRadius = 0.2f;
+        const float capsuleHeight = 1.0f;
+        const AZ::Quaternion capsuleRotation(-0.2f, -0.8f, -0.4f, 0.4f);
+        const AZ::Vector3 capsuleOffset(1.0f, -2.0f, 1.0f);
+        SetupCollider(Physics::CapsuleShapeConfiguration(capsuleHeight, capsuleRadius), capsuleRotation, capsuleOffset);
+        const AZ::Quaternion entityRotation(0.7f, -0.1f, -0.1f, 0.7f);
+        const AZ::Vector3 entityTranslation(-2.0f, 1.0f, -3.0f);
+        const float uniformScale = 2.0f;
+        SetupTransform(entityRotation, entityTranslation, uniformScale);
+        const AZ::Vector3 nonUniformScale(1.0f, 0.5f, 1.5f);
+        SetupNonUniformScale(nonUniformScale);
+        EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode::Dimensions);
+
+        // the expected position of the collider centre based on the combination of entity transform, collider offset and non-uniform scale
+        const AZ::Vector3 expectedColliderPosition(-0.92f, -2.44f, -5.0f);
+
+        // the expected position of the height manipulator relative to the centre of the collider, based on collider
+        // rotation, entity scale and non-uniform scale
+        const AZ::Vector3 heightManipulatorDelta(-0.3096f, 0.6528f, 0.4f);
+
+        // position the camera to look at the collider along the y-z diagonal
+        AzFramework::SetCameraTransform(
+            m_cameraState,
+            AZ::Transform::CreateFromQuaternionAndTranslation(
+                AZ::Quaternion::CreateRotationX(-AZ::Constants::QuarterPi), expectedColliderPosition + AZ::Vector3(0.0f, -1.0f, 1.0f)));
+
+        const AZ::Vector3 worldStart = expectedColliderPosition + heightManipulatorDelta;
+        const AZ::Vector3 worldEnd = worldStart + 0.2f * heightManipulatorDelta;
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to the position of the height manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        float newCapsuleHeight = 0.0f;
+        PhysX::EditorColliderComponentRequestBus::EventResult(
+            newCapsuleHeight, m_idPair, &PhysX::EditorColliderComponentRequests::GetCapsuleHeight);
+
+        EXPECT_NEAR(newCapsuleHeight, 1.2f, ManipulatorTolerance);
+    }
+
+    TEST_F(PhysXEditorColliderComponentManipulatorFixture, ColliderRotationManipulatorsCorrectlyLocatedRelativeToColliderWithNonUniformScale)
+    {
+        const float capsuleRadius = 1.2f;
+        const float capsuleHeight = 4.0f;
+        const AZ::Quaternion capsuleRotation(0.7f, 0.7f, -0.1f, 0.1f);
+        const AZ::Vector3 capsuleOffset(-2.0f, -2.0f, 1.0f);
+        SetupCollider(Physics::CapsuleShapeConfiguration(capsuleHeight, capsuleRadius), capsuleRotation, capsuleOffset);
+        const AZ::Quaternion entityRotation(0.8f, -0.4f, -0.4f, 0.2f);
+        const AZ::Vector3 entityTranslation(1.0f, -1.5f, 2.0f);
+        const float uniformScale = 1.5f;
+        SetupTransform(entityRotation, entityTranslation, uniformScale);
+        const AZ::Vector3 nonUniformScale(1.5f, 1.5f, 2.0f);
+        SetupNonUniformScale(nonUniformScale);
+        EnterColliderSubMode(PhysX::ColliderComponentModeRequests::SubMode::Rotation);
+
+        // the expected position of the collider centre based on the combination of entity transform, collider offset and non-uniform scale
+        const AZ::Vector3 expectedColliderPosition(-0.86f, 4.8f, -0.52f);
+
+        // the y and z axes of the collider's frame in world space, used to locate points on the x rotation manipulator arc to interact with
+        const AZ::Vector3 yDirection(0.36f, -0.8f, -0.48f);
+        const AZ::Vector3 zDirection(0.9024f, 0.168f, 0.3968f);
+
+        // position the camera to look at the collider along the world y axis
+        AzFramework::SetCameraTransform(
+            m_cameraState,
+            AZ::Transform::CreateTranslation(expectedColliderPosition - AZ::Vector3(0.0f, 10.0f, 0.0f)));
+
+        const float screenToWorldMultiplier = AzToolsFramework::CalculateScreenToWorldMultiplier(expectedColliderPosition, m_cameraState);
+        const float manipulatorViewRadius = 2.0f;
+        const AZ::Vector3 worldStart = expectedColliderPosition + screenToWorldMultiplier * manipulatorViewRadius * yDirection;
+        const AZ::Vector3 worldEnd = expectedColliderPosition + screenToWorldMultiplier * manipulatorViewRadius * zDirection;
+
+        const auto screenStart = AzFramework::WorldToScreen(worldStart, m_cameraState);
+        const auto screenEnd = AzFramework::WorldToScreen(worldEnd, m_cameraState);
+
+        m_actionDispatcher
+            ->CameraState(m_cameraState)
+            // move the mouse to a position on the angular manipulator
+            ->MousePosition(screenStart)
+            // drag to move the manipulator
+            ->MouseLButtonDown()
+            ->MousePosition(screenEnd)
+            ->MouseLButtonUp();
+
+        AZ::Quaternion newColliderRotation = AZ::Quaternion::CreateIdentity();
+        PhysX::EditorColliderComponentRequestBus::EventResult(
+            newColliderRotation, m_idPair, &PhysX::EditorColliderComponentRequests::GetColliderRotation);
+
+        EXPECT_THAT(newColliderRotation, testing::Not(IsCloseTolerance(capsuleRotation, ManipulatorTolerance)));
+    }
 } // namespace UnitTest