diff --git a/crates/cast/tests/cli/main.rs b/crates/cast/tests/cli/main.rs
index d142cbd599b2..267e825bed7c 100644
--- a/crates/cast/tests/cli/main.rs
+++ b/crates/cast/tests/cli/main.rs
@@ -1841,3 +1841,94 @@ Transaction successfully executed.
 
 "#]]);
 });
+
+// tests cast can decode external libraries traces with project cached selectors
+forgetest_async!(decode_external_libraries_with_cached_selectors, |prj, cmd| {
+    let (api, handle) = anvil::spawn(NodeConfig::test()).await;
+
+    foundry_test_utils::util::initialize(prj.root());
+    prj.add_source(
+        "ExternalLib",
+        r#"
+import "./CounterInExternalLib.sol";
+library ExternalLib {
+    function updateCounterInExternalLib(CounterInExternalLib.Info storage counterInfo, uint256 counter) public {
+        counterInfo.counter = counter + 1;
+    }
+}
+   "#,
+    )
+    .unwrap();
+    prj.add_source(
+        "CounterInExternalLib",
+        r#"
+import "./ExternalLib.sol";
+contract CounterInExternalLib {
+    struct Info {
+        uint256 counter;
+    }
+    Info info;
+    constructor() {
+        ExternalLib.updateCounterInExternalLib(info, 100);
+    }
+}
+   "#,
+    )
+    .unwrap();
+    prj.add_script(
+        "CounterInExternalLibScript",
+        r#"
+import "forge-std/Script.sol";
+import {CounterInExternalLib} from "../src/CounterInExternalLib.sol";
+contract CounterInExternalLibScript is Script {
+    function run() public {
+        vm.startBroadcast();
+        new CounterInExternalLib();
+        vm.stopBroadcast();
+    }
+}
+   "#,
+    )
+    .unwrap();
+
+    cmd.args([
+        "script",
+        "--private-key",
+        "0xac0974bec39a17e36ba4a6b4d238ff944bacb478cbed5efcae784d7bf4f2ff80",
+        "--rpc-url",
+        &handle.http_endpoint(),
+        "--broadcast",
+        "CounterInExternalLibScript",
+    ])
+    .assert_success();
+
+    let tx_hash = api
+        .transaction_by_block_number_and_index(BlockNumberOrTag::Latest, Index::from(0))
+        .await
+        .unwrap()
+        .unwrap()
+        .tx_hash();
+
+    // Cache project selectors.
+    cmd.forge_fuse().set_current_dir(prj.root());
+    cmd.forge_fuse().args(["selectors", "cache"]).assert_success();
+
+    // Assert cast with local artifacts can decode external lib signature.
+    cmd.cast_fuse().set_current_dir(prj.root());
+    cmd.cast_fuse()
+        .args(["run", format!("{tx_hash}").as_str(), "--rpc-url", &handle.http_endpoint()])
+        .assert_success()
+        .stdout_eq(str![[r#"
+...
+Traces:
+  [37739] → new <unknown>@0xe7f1725E7734CE288F8367e1Bb143E90bb3F0512
+    ├─ [22411] 0xfAb06527117d29EA121998AC4fAB9Fc88bF5f979::updateCounterInExternalLib(0, 100) [delegatecall]
+    │   └─ ← [Stop] 
+    └─ ← [Return] 62 bytes of code
+
+
+Transaction successfully executed.
+[GAS]
+
+"#]]);
+});
diff --git a/crates/cli/src/utils/cmd.rs b/crates/cli/src/utils/cmd.rs
index 505634996de8..67aa65073ff8 100644
--- a/crates/cli/src/utils/cmd.rs
+++ b/crates/cli/src/utils/cmd.rs
@@ -501,6 +501,15 @@ pub fn cache_local_signatures(output: &ProjectCompileOutput, cache_path: PathBuf
                     .events
                     .insert(event.selector().to_string(), event.full_signature());
             }
+            // External libraries doesn't have functions included in abi, but `methodIdentifiers`.
+            if let Some(method_identifiers) = &artifact.method_identifiers {
+                method_identifiers.iter().for_each(|(signature, selector)| {
+                    cached_signatures
+                        .functions
+                        .entry(format!("0x{selector}"))
+                        .or_insert(signature.to_string());
+                });
+            }
         }
     });
 
diff --git a/crates/evm/traces/src/decoder/mod.rs b/crates/evm/traces/src/decoder/mod.rs
index b63c7f1d7209..68ecbac29c7e 100644
--- a/crates/evm/traces/src/decoder/mod.rs
+++ b/crates/evm/traces/src/decoder/mod.rs
@@ -689,10 +689,13 @@ fn reconstruct_params(event: &Event, decoded: &DecodedEvent) -> Vec<DynSolValue>
     let mut unindexed = 0;
     let mut inputs = vec![];
     for input in event.inputs.iter() {
-        if input.indexed {
+        // Prevent panic of event `Transfer(from, to)` decoded with a signature
+        // `Transfer(address indexed from, address indexed to, uint256 indexed tokenId)` by making
+        // sure the event inputs is not higher than decoded indexed / un-indexed values.
+        if input.indexed && indexed < decoded.indexed.len() {
             inputs.push(decoded.indexed[indexed].clone());
             indexed += 1;
-        } else {
+        } else if unindexed < decoded.body.len() {
             inputs.push(decoded.body[unindexed].clone());
             unindexed += 1;
         }