diff --git a/examples/config-extends/app.vue b/examples/config-extends/app.vue
new file mode 100644
index 0000000000..430bf40a54
--- /dev/null
+++ b/examples/config-extends/app.vue
@@ -0,0 +1,16 @@
+<script setup>
+const themeConfig = useRuntimeConfig().theme
+</script>
+
+<template>
+  <NuxtExampleLayout example="config-extends">
+    theme runtimeConfig
+    <pre>{{ JSON.stringify(themeConfig, null, 2) }}</pre>
+  </NuxtExampleLayout>
+</template>
+
+<style scoped>
+pre {
+  text-align: left;
+}
+</style>
diff --git a/examples/config-extends/base/nuxt.config.ts b/examples/config-extends/base/nuxt.config.ts
new file mode 100644
index 0000000000..aa815ae614
--- /dev/null
+++ b/examples/config-extends/base/nuxt.config.ts
@@ -0,0 +1,10 @@
+import { defineNuxtConfig } from 'nuxt3'
+
+export default defineNuxtConfig({
+  publicRuntimeConfig: {
+    theme: {
+      primaryColor: 'base_primary',
+      secondaryColor: 'base_secondary'
+    }
+  }
+})
diff --git a/examples/config-extends/nuxt.config.ts b/examples/config-extends/nuxt.config.ts
new file mode 100644
index 0000000000..a08add69b9
--- /dev/null
+++ b/examples/config-extends/nuxt.config.ts
@@ -0,0 +1,13 @@
+import { defineNuxtConfig } from 'nuxt3'
+
+export default defineNuxtConfig({
+  extends: './base',
+  publicRuntimeConfig: {
+    theme: {
+      primaryColor: 'user_primary'
+    }
+  },
+  modules: [
+    '@nuxt/ui'
+  ]
+})
diff --git a/examples/config-extends/package.json b/examples/config-extends/package.json
new file mode 100644
index 0000000000..da5aa26e79
--- /dev/null
+++ b/examples/config-extends/package.json
@@ -0,0 +1,13 @@
+{
+  "name": "example-config-extends",
+  "private": true,
+  "devDependencies": {
+    "@nuxt/ui": "npm:@nuxt/ui-edge@latest",
+    "nuxt3": "latest"
+  },
+  "scripts": {
+    "dev": "nuxi dev",
+    "build": "nuxi build",
+    "start": "nuxi preview"
+  }
+}
diff --git a/examples/config-extends/tsconfig.json b/examples/config-extends/tsconfig.json
new file mode 100644
index 0000000000..4b34df1571
--- /dev/null
+++ b/examples/config-extends/tsconfig.json
@@ -0,0 +1,3 @@
+{
+  "extends": "./.nuxt/tsconfig.json"
+}
diff --git a/packages/kit/package.json b/packages/kit/package.json
index 3fb7bca788..7373382d7f 100644
--- a/packages/kit/package.json
+++ b/packages/kit/package.json
@@ -14,9 +14,9 @@
   },
   "dependencies": {
     "@nuxt/schema": "^3.0.0",
+    "c12": "^0.1.1",
     "consola": "^2.15.3",
     "defu": "^5.0.1",
-    "dotenv": "^15.0.0",
     "globby": "^13.1.0",
     "hash-sum": "^2.0.0",
     "jiti": "^1.12.15",
@@ -24,7 +24,6 @@
     "mlly": "^0.4.1",
     "pathe": "^0.2.0",
     "pkg-types": "^0.3.2",
-    "rc9": "^1.2.0",
     "scule": "^0.2.1",
     "semver": "^7.3.5",
     "unctx": "^1.0.2",
diff --git a/packages/kit/src/internal/dotenv.ts b/packages/kit/src/internal/dotenv.ts
deleted file mode 100644
index eebfdff7dd..0000000000
--- a/packages/kit/src/internal/dotenv.ts
+++ /dev/null
@@ -1,128 +0,0 @@
-import { promises as fsp, existsSync } from 'fs'
-import { resolve } from 'pathe'
-import dotenv from 'dotenv'
-
-export interface DotenvOptions {
-  /** The project root directory (either absolute or relative to the current working directory). */
-  rootDir: string
-
-  /**
-   * What file to look in for environment variables (either absolute or relative
-   * to the current working directory). For example, `.env`.
-   */
-  fileName: string
-
-  /**
-   * Whether to interpolate variables within .env.
-   *
-   * @example
-   * ```env
-   * BASE_DIR="/test"
-   * # resolves to "/test/further"
-   * ANOTHER_DIR="${BASE_DIR}/further"
-   * ```
-   */
-  expand: boolean
-
-  /** An object describing environment variables (key, value pairs). */
-  env: NodeJS.ProcessEnv
-}
-
-export type Env = typeof process.env
-
-/**
- * Load and interpolate environment variables into `process.env`.
- * If you need more control (or access to the values), consider using `loadDotenv` instead
- *
- */
-export async function setupDotenv (options: DotenvOptions): Promise<Env> {
-  const targetEnv = options.env ?? process.env
-
-  // Load env
-  const env = await loadDotenv({
-    rootDir: options.rootDir,
-    fileName: options.fileName ?? '.env',
-    env: targetEnv,
-    expand: options.expand ?? true
-  })
-
-  // Fill process.env
-  for (const key in env) {
-    if (!key.startsWith('_') && targetEnv[key] === undefined) {
-      targetEnv[key] = env[key]
-    }
-  }
-
-  return env
-}
-
-/** Load environment variables into an object. */
-export async function loadDotenv (opts: DotenvOptions): Promise<Env> {
-  const env = Object.create(null)
-
-  const dotenvFile = resolve(opts.rootDir, opts.fileName)
-
-  if (existsSync(dotenvFile)) {
-    const parsed = dotenv.parse(await fsp.readFile(dotenvFile, 'utf-8'))
-    Object.assign(env, parsed)
-  }
-
-  // Apply process.env
-  if (!opts.env._applied) {
-    Object.assign(env, opts.env)
-    env._applied = true
-  }
-
-  // Interpolate env
-  if (opts.expand) {
-    expand(env)
-  }
-
-  return env
-}
-
-// Based on https://github.com/motdotla/dotenv-expand
-function expand (target: Record<string, any>, source: Record<string, any> = {}, parse = (v: any) => v) {
-  function getValue (key: string) {
-    // Source value 'wins' over target value
-    return source[key] !== undefined ? source[key] : target[key]
-  }
-
-  function interpolate (value: unknown, parents: string[] = []) {
-    if (typeof value !== 'string') {
-      return value
-    }
-    const matches = value.match(/(.?\${?(?:[a-zA-Z0-9_:]+)?}?)/g) || []
-    return parse(matches.reduce((newValue, match) => {
-      const parts = /(.?)\${?([a-zA-Z0-9_:]+)?}?/g.exec(match)
-      const prefix = parts[1]
-
-      let value, replacePart: string
-
-      if (prefix === '\\') {
-        replacePart = parts[0]
-        value = replacePart.replace('\\$', '$')
-      } else {
-        const key = parts[2]
-        replacePart = parts[0].substring(prefix.length)
-
-        // Avoid recursion
-        if (parents.includes(key)) {
-          console.warn(`Please avoid recursive environment variables ( loop: ${parents.join(' > ')} > ${key} )`)
-          return ''
-        }
-
-        value = getValue(key)
-
-        // Resolve recursive interpolations
-        value = interpolate(value, [...parents, key])
-      }
-
-      return value !== undefined ? newValue.replace(replacePart, value) : newValue
-    }, value))
-  }
-
-  for (const key in target) {
-    target[key] = interpolate(getValue(key))
-  }
-}
diff --git a/packages/kit/src/loader/config.ts b/packages/kit/src/loader/config.ts
index 54636b30b6..548eccc0fc 100644
--- a/packages/kit/src/loader/config.ts
+++ b/packages/kit/src/loader/config.ts
@@ -1,12 +1,10 @@
-import { existsSync } from 'fs'
 import { resolve } from 'pathe'
-import defu from 'defu'
 import { applyDefaults } from 'untyped'
-import * as rc from 'rc9'
+import { loadConfig, DotenvOptions } from 'c12'
 import type { NuxtOptions } from '@nuxt/schema'
 import { NuxtConfigSchema } from '@nuxt/schema'
-import { tryResolveModule, requireModule, scanRequireTree } from '../internal/cjs'
-import { setupDotenv, DotenvOptions } from '../internal/dotenv'
+// TODO
+// import { tryResolveModule, requireModule, scanRequireTree } from '../internal/cjs'
 
 export interface LoadNuxtConfigOptions {
   /** Your project root directory (either absolute or relative to the current working directory). */
@@ -25,39 +23,22 @@ export interface LoadNuxtConfigOptions {
 export async function loadNuxtConfig (opts: LoadNuxtConfigOptions): Promise<NuxtOptions> {
   const rootDir = resolve(process.cwd(), opts.rootDir || '.')
 
-  if (opts.dotenv !== false) {
-    await setupDotenv({ rootDir, ...opts.dotenv })
-  }
+  const { config: nuxtConfig, configFile, layers } = await loadConfig({
+    cwd: rootDir,
+    name: 'nuxt',
+    configFile: 'nuxt.config',
+    rcFile: '.nuxtrc',
+    dotenv: opts.dotenv,
+    globalRc: true,
+    overrides: opts.config
+  })
 
-  const nuxtConfigFile = tryResolveModule(resolve(rootDir, opts.configFile || 'nuxt.config'))
+  nuxtConfig.rootDir = nuxtConfig.rootDir || rootDir
 
-  let nuxtConfig: any = {}
+  nuxtConfig._nuxtConfigFile = configFile
+  nuxtConfig._nuxtConfigFiles = [configFile]
 
-  if (nuxtConfigFile && existsSync(nuxtConfigFile)) {
-    nuxtConfig = requireModule(nuxtConfigFile, { clearCache: true })
-
-    if (typeof nuxtConfig === 'function') {
-      nuxtConfig = await nuxtConfig(opts)
-    }
-
-    nuxtConfig = { ...nuxtConfig }
-    nuxtConfig._nuxtConfigFile = nuxtConfigFile
-    nuxtConfig._nuxtConfigFiles = Array.from(scanRequireTree(nuxtConfigFile))
-  }
-
-  // Combine configs
-  // Priority: configOverrides > nuxtConfig > .nuxtrc > .nuxtrc (global)
-  nuxtConfig = defu(
-    opts.config,
-    nuxtConfig,
-    rc.read({ name: '.nuxtrc', dir: rootDir }),
-    rc.readUser('.nuxtrc')
-  )
-
-  // Set rootDir
-  if (!nuxtConfig.rootDir) {
-    nuxtConfig.rootDir = rootDir
-  }
+  nuxtConfig.layers = layers
 
   // Resolve and apply defaults
   return applyDefaults(NuxtConfigSchema, nuxtConfig) as NuxtOptions
diff --git a/packages/schema/package.json b/packages/schema/package.json
index 06b4a573bb..d97fd0b5d1 100644
--- a/packages/schema/package.json
+++ b/packages/schema/package.json
@@ -19,6 +19,7 @@
     "unbuild": "latest"
   },
   "dependencies": {
+    "c12": "^0.1.1",
     "create-require": "^1.1.1",
     "defu": "^5.0.1",
     "jiti": "^1.12.15",
diff --git a/packages/schema/src/config/_common.ts b/packages/schema/src/config/_common.ts
index cd8325d0c8..50d822f43c 100644
--- a/packages/schema/src/config/_common.ts
+++ b/packages/schema/src/config/_common.ts
@@ -6,6 +6,19 @@ import jiti from 'jiti'
 import defu from 'defu'
 
 export default {
+  /**
+   * Extend nested configurations from multiple local or remoted sources
+   *
+   * Value should be either a string or array of strings pointing to source directories or config path relative to current config.
+   *
+   * You can use `github:`, `gitlab:`, `bitbucket:` or `https://` to extend from a remote git repository.
+   *
+   * @typedef {string|string[]}
+   *
+   * @version 3
+   */
+  extends: null,
+
   /**
    * Define the workspace directory of your application.
    *
diff --git a/packages/schema/src/types/config.ts b/packages/schema/src/types/config.ts
index 36b477f20f..d7c794b61d 100644
--- a/packages/schema/src/types/config.ts
+++ b/packages/schema/src/types/config.ts
@@ -1,7 +1,10 @@
 import { ConfigSchema } from '../../schema/config'
+import type { ResolvedConfig } from 'c12'
 
 /** Normalized Nuxt options available as `nuxt.options.*` */
-export interface NuxtOptions extends ConfigSchema { }
+export interface NuxtOptions extends ConfigSchema {
+  layers: ResolvedConfig<NuxtOptions>[]
+}
 
 type DeepPartial<T> = T extends Record<string, any> ? { [P in keyof T]?: DeepPartial<T[P]> | T[P] } : T
 
diff --git a/yarn.lock b/yarn.lock
index d0cb77ef6f..894e43a7da 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -2859,9 +2859,9 @@ __metadata:
     "@nuxt/schema": ^3.0.0
     "@types/lodash.template": ^4
     "@types/semver": ^7
+    c12: ^0.1.1
     consola: ^2.15.3
     defu: ^5.0.1
-    dotenv: ^15.0.0
     globby: ^13.1.0
     hash-sum: ^2.0.0
     jiti: ^1.12.15
@@ -2869,7 +2869,6 @@ __metadata:
     mlly: ^0.4.1
     pathe: ^0.2.0
     pkg-types: ^0.3.2
-    rc9: ^1.2.0
     scule: ^0.2.1
     semver: ^7.3.5
     unbuild: latest
@@ -3021,6 +3020,7 @@ __metadata:
   dependencies:
     "@types/lodash.template": ^4
     "@types/semver": ^7
+    c12: ^0.1.1
     create-require: ^1.1.1
     defu: ^5.0.1
     jiti: ^1.12.15
@@ -6744,6 +6744,21 @@ __metadata:
   languageName: node
   linkType: hard
 
+"c12@npm:^0.1.1":
+  version: 0.1.1
+  resolution: "c12@npm:0.1.1"
+  dependencies:
+    defu: ^5.0.1
+    dotenv: ^14.3.2
+    gittar: ^0.1.1
+    jiti: ^1.12.14
+    mlly: ^0.4.1
+    pathe: ^0.2.0
+    rc9: ^1.2.0
+  checksum: 628bd42845926249f9dfbaf14371793de72c4b9fa764e8a635ae56f5e67c99d765f8ea09ac44e3876e334095a627ca24d7029ca5d6254829998b9fab67927460
+  languageName: node
+  linkType: hard
+
 "cacache@npm:^12.0.2":
   version: 12.0.4
   resolution: "cacache@npm:12.0.4"
@@ -8908,20 +8923,13 @@ __metadata:
   languageName: node
   linkType: hard
 
-"dotenv@npm:^14.3.0":
+"dotenv@npm:^14.3.0, dotenv@npm:^14.3.2":
   version: 14.3.2
   resolution: "dotenv@npm:14.3.2"
   checksum: 86c06758915d6facc35275f4a7fafc16705b6f3b44befaa8abca91367991efc8ff8db5437d3cc14778231d19fb97610fe82d60f8a53ba723cdb69fe4171439aa
   languageName: node
   linkType: hard
 
-"dotenv@npm:^15.0.0":
-  version: 15.0.0
-  resolution: "dotenv@npm:15.0.0"
-  checksum: be5d852b2ad1708780e7038481c0687ce4bb9edf354d439872511e966a5f28c083f296e1d1c182256d695bfdd67e320382eb3b0f2e9d83efa3615cd1757257ab
-  languageName: node
-  linkType: hard
-
 "dotenv@npm:^8.2.0":
   version: 8.6.0
   resolution: "dotenv@npm:8.6.0"
@@ -10081,6 +10089,15 @@ __metadata:
   languageName: node
   linkType: hard
 
+"example-config-extends@workspace:examples/config-extends":
+  version: 0.0.0-use.local
+  resolution: "example-config-extends@workspace:examples/config-extends"
+  dependencies:
+    "@nuxt/ui": "npm:@nuxt/ui-edge@latest"
+    nuxt3: latest
+  languageName: unknown
+  linkType: soft
+
 "example-hello-world@workspace:examples/hello-world":
   version: 0.0.0-use.local
   resolution: "example-hello-world@workspace:examples/hello-world"
@@ -11116,6 +11133,16 @@ __metadata:
   languageName: node
   linkType: hard
 
+"gittar@npm:^0.1.1":
+  version: 0.1.1
+  resolution: "gittar@npm:0.1.1"
+  dependencies:
+    mkdirp: ^0.5.1
+    tar: ^4.4.1
+  checksum: fcc6127a9ce36116f1d2e429b896ab133c27ddd84817a48ccb88b3039caca33e1f8566fe00d14c6e7c16a0aa65cf543c94588427e5b72c52c1cd4d8d87414744
+  languageName: node
+  linkType: hard
+
 "glob-parent@npm:^3.1.0":
   version: 3.1.0
   resolution: "glob-parent@npm:3.1.0"
@@ -19608,7 +19635,7 @@ __metadata:
   languageName: node
   linkType: hard
 
-"tar@npm:^4, tar@npm:^4.4.12":
+"tar@npm:^4, tar@npm:^4.4.1, tar@npm:^4.4.12":
   version: 4.4.19
   resolution: "tar@npm:4.4.19"
   dependencies: