diff --git a/spacy/displacy/render.py b/spacy/displacy/render.py
index 86869e3b8..47407bcb7 100644
--- a/spacy/displacy/render.py
+++ b/spacy/displacy/render.py
@@ -1,4 +1,3 @@
-import itertools
 import uuid
 from typing import Any, Dict, List, Optional, Tuple, Union
 
@@ -218,7 +217,7 @@ class SpanRenderer:
                     + (self.offset_step * (len(entities) - 1))
                 )
                 markup += self.span_template.format(
-                    text=token["text"],
+                    text=escape_html(token["text"]),
                     span_slices=slices,
                     span_starts=starts,
                     total_height=total_height,
diff --git a/spacy/tests/test_displacy.py b/spacy/tests/test_displacy.py
index ce103068a..1570f8d09 100644
--- a/spacy/tests/test_displacy.py
+++ b/spacy/tests/test_displacy.py
@@ -377,3 +377,22 @@ def test_displacy_manual_sorted_entities():
 
     html = displacy.render(doc, style="ent", manual=True)
     assert html.find("FIRST") < html.find("SECOND")
+
+
+@pytest.mark.issue(12816)
+def test_issue12816(en_vocab) -> None:
+    """Test that displaCy's span visualizer escapes annotated HTML tags correctly."""
+    # Create a doc containing an annotated word and an unannotated HTML tag
+    doc = Doc(en_vocab, words=["test", "<TEST>"])
+    doc.spans["sc"] = [Span(doc, 0, 1, label="test")]
+
+    # Verify that the HTML tag is escaped when unannotated
+    html = displacy.render(doc, style="span")
+    assert "&lt;TEST&gt;" in html
+
+    # Annotate the HTML tag
+    doc.spans["sc"].append(Span(doc, 1, 2, label="test"))
+
+    # Verify that the HTML tag is still escaped
+    html = displacy.render(doc, style="span")
+    assert "&lt;TEST&gt;" in html