diff --git a/.chronus/changes/fix-extension-proto-member-2026-8-22.md b/.chronus/changes/fix-extension-proto-member-2026-8-22.md
new file mode 100644
index 00000000000..e05925e6da7
--- /dev/null
+++ b/.chronus/changes/fix-extension-proto-member-2026-8-22.md
@@ -0,0 +1,7 @@
+---
+changeKind: fix
+packages:
+  - "@typespec/openapi"
+---
+
+Fix `@extension` dropping a member named `__proto__` from an object value. The member is now kept as a regular own property instead of being assigned through the `Object.prototype.__proto__` setter, which dropped it and, when its value was an object, made that value the prototype of the stored extension.
diff --git a/.chronus/changes/fix-marshal-proto-member-2026-8-21.md b/.chronus/changes/fix-marshal-proto-member-2026-8-21.md
new file mode 100644
index 00000000000..9fb79af0034
--- /dev/null
+++ b/.chronus/changes/fix-marshal-proto-member-2026-8-21.md
@@ -0,0 +1,7 @@
+---
+changeKind: fix
+packages:
+  - "@typespec/compiler"
+---
+
+Fix object values passed to decorators dropping a member named `__proto__`. The member is now marshalled as a regular own property instead of being assigned through the `Object.prototype.__proto__` setter, which dropped it and, when its value was an object, made that value the prototype of the marshalled object.
diff --git a/packages/compiler/src/core/js-marshaller.ts b/packages/compiler/src/core/js-marshaller.ts
index b15b35729fc..e33cf7e5d35 100644
--- a/packages/compiler/src/core/js-marshaller.ts
+++ b/packages/compiler/src/core/js-marshaller.ts
@@ -86,11 +86,11 @@ function numericValueToJs(type: NumericValue, valueConstraint: Type | undefined)
 }
 
 function objectValueToJs(type: ObjectValue): Record<string, unknown> {
-  const result: Record<string, unknown> = {};
-  for (const [key, value] of type.properties) {
-    result[key] = marshalTypeForJs(value.value, undefined);
-  }
-  return result;
+  // Object.fromEntries defines each member as an own property, so a member named `__proto__`
+  // is kept instead of going through the Object.prototype setter and being dropped.
+  return Object.fromEntries(
+    [...type.properties].map(([key, value]) => [key, marshalTypeForJs(value.value, undefined)]),
+  );
 }
 function arrayValueToJs(type: ArrayValue) {
   return type.values.map((x) => marshalTypeForJs(x, undefined));
diff --git a/packages/compiler/test/checker/decorators.test.ts b/packages/compiler/test/checker/decorators.test.ts
index 0dad4ab7b20..c1d0bbf295a 100644
--- a/packages/compiler/test/checker/decorators.test.ts
+++ b/packages/compiler/test/checker/decorators.test.ts
@@ -830,6 +830,29 @@ describe("compiler: checker: decorators", () => {
           );
           deepStrictEqual(arg, { name: { other: "foo" } });
         });
+
+        // Regression tests for https://github.com/microsoft/typespec/issues/11743
+        it("keeps a member named __proto__ holding a string as an own property", async () => {
+          const arg = await testCallDecorator("valueof unknown", `#{__proto__: "written", ok: 1}`);
+          ok(Object.prototype.hasOwnProperty.call(arg, "__proto__"));
+          strictEqual(arg.__proto__, "written");
+          strictEqual(arg.ok, 1);
+          deepStrictEqual(Object.keys(arg), ["__proto__", "ok"]);
+          strictEqual(Object.getPrototypeOf(arg), Object.prototype);
+        });
+
+        it("keeps a member named __proto__ holding an object as an own property", async () => {
+          const arg = await testCallDecorator(
+            "valueof unknown",
+            `#{__proto__: #{polluted: true}, ok: 1}`,
+          );
+          ok(Object.prototype.hasOwnProperty.call(arg, "__proto__"));
+          deepStrictEqual(arg.__proto__, { polluted: true });
+          strictEqual(arg.ok, 1);
+          deepStrictEqual(Object.keys(arg), ["__proto__", "ok"]);
+          strictEqual(Object.getPrototypeOf(arg), Object.prototype);
+          strictEqual(arg.polluted, undefined);
+        });
       });
 
       describe("passing an array value", () => {
diff --git a/packages/openapi/src/decorators.ts b/packages/openapi/src/decorators.ts
index f43d02c6f57..dc4efba3d1a 100644
--- a/packages/openapi/src/decorators.ts
+++ b/packages/openapi/src/decorators.ts
@@ -97,14 +97,13 @@ function convertRemainingValuesToExtensions(program: Program, value: unknown): u
       if (isTypeSpecValue(value)) {
         return serializeValueAsJson(program, value, value.type);
       } else {
-        const result: Record<string, unknown> = {};
-        for (const [key, val] of Object.entries(value)) {
-          if (val === undefined) {
-            continue;
-          }
-          result[key] = convertRemainingValuesToExtensions(program, val);
-        }
-        return result;
+        // Object.fromEntries defines each member as an own property, so a member named
+        // `__proto__` is kept instead of going through the Object.prototype setter.
+        return Object.fromEntries(
+          Object.entries(value)
+            .filter(([, val]) => val !== undefined)
+            .map(([key, val]) => [key, convertRemainingValuesToExtensions(program, val)]),
+        );
       }
     default:
       return value;
diff --git a/packages/openapi/test/decorators.test.ts b/packages/openapi/test/decorators.test.ts
index 5739379883b..7fa8d543344 100644
--- a/packages/openapi/test/decorators.test.ts
+++ b/packages/openapi/test/decorators.test.ts
@@ -1,5 +1,5 @@
 import { expectDiagnostics, t } from "@typespec/compiler/testing";
-import { deepStrictEqual } from "assert";
+import { deepStrictEqual, ok, strictEqual } from "assert";
 import { describe, it } from "vitest";
 import {
   getExtensions,
@@ -38,6 +38,34 @@ describe("@extension", () => {
     });
   });
 
+  // Regression tests for https://github.com/microsoft/typespec/issues/11743
+  it("keeps a member named __proto__ holding a string as an own property", async () => {
+    const { program, Foo } = await Tester.compile(t.code`
+      @extension("x-custom", #{__proto__: "written", ok: 1})
+      model ${t.model("Foo")} {}
+    `);
+
+    const value = getExtensions(program, Foo).get("x-custom");
+    ok(Object.prototype.hasOwnProperty.call(value, "__proto__"));
+    deepStrictEqual(Object.keys(value), ["__proto__", "ok"]);
+    strictEqual(value.__proto__, "written");
+    strictEqual(Object.getPrototypeOf(value), Object.prototype);
+  });
+
+  it("keeps a member named __proto__ holding an object as an own property", async () => {
+    const { program, Foo } = await Tester.compile(t.code`
+      @extension("x-custom", #{__proto__: #{polluted: true}, ok: 1})
+      model ${t.model("Foo")} {}
+    `);
+
+    const value = getExtensions(program, Foo).get("x-custom");
+    ok(Object.prototype.hasOwnProperty.call(value, "__proto__"));
+    deepStrictEqual(Object.keys(value), ["__proto__", "ok"]);
+    deepStrictEqual(value.__proto__, { polluted: true });
+    strictEqual(Object.getPrototypeOf(value), Object.prototype);
+    strictEqual(value.polluted, undefined);
+  });
+
   it.each([
     { value: `#{ name: "foo" }`, expected: { name: "foo" } },
     { value: `#{ items: #[ #{foo: "bar" }]}`, expected: { items: [{ foo: "bar" }] } },