diff --git a/packages/nuxt/src/app/components/nuxt-island.ts b/packages/nuxt/src/app/components/nuxt-island.ts
index e2990cfed6..9f609fc5f6 100644
--- a/packages/nuxt/src/app/components/nuxt-island.ts
+++ b/packages/nuxt/src/app/components/nuxt-island.ts
@@ -13,6 +13,9 @@ import { getFragmentHTML, getSlotProps } from './utils'
 import { useNuxtApp, useRuntimeConfig } from '#app/nuxt'
 import { useRequestEvent } from '#app/composables/ssr'
 
+// @ts-expect-error virtual file
+import { remoteComponentIslands } from '#build/nuxt.config.mjs'
+
 const pKey = '_islandPromises'
 const SSR_UID_RE = /nuxt-ssr-component-uid="([^"]*)"/
 const UID_ATTR = /nuxt-ssr-component-uid(="([^"]*)")?/
@@ -106,7 +109,7 @@ export default defineComponent({
       const key = `${props.name}_${hashId.value}`
       if (nuxtApp.payload.data[key] && !force) { return nuxtApp.payload.data[key] }
 
-      const url = props.source ? new URL(`/__nuxt_island/${key}`, props.source).href : `/__nuxt_island/${key}`
+      const url = remoteComponentIslands && props.source ? new URL(`/__nuxt_island/${key}`, props.source).href : `/__nuxt_island/${key}`
 
       if (process.server && process.env.prerender) {
         // Hint to Nitro to prerender the island component
diff --git a/packages/nuxt/src/components/module.ts b/packages/nuxt/src/components/module.ts
index 94ecdac476..d9a638872f 100644
--- a/packages/nuxt/src/components/module.ts
+++ b/packages/nuxt/src/components/module.ts
@@ -221,7 +221,7 @@ export default defineNuxtModule<ComponentsOptions>({
         getComponents,
         mode,
         transform: typeof nuxt.options.components === 'object' && !Array.isArray(nuxt.options.components) ? nuxt.options.components.transform : undefined,
-        experimentalComponentIslands: nuxt.options.experimental.componentIslands
+        experimentalComponentIslands: !!nuxt.options.experimental.componentIslands
       }))
 
       if (isServer && nuxt.options.experimental.componentIslands) {
@@ -265,7 +265,7 @@ export default defineNuxtModule<ComponentsOptions>({
           getComponents,
           mode,
           transform: typeof nuxt.options.components === 'object' && !Array.isArray(nuxt.options.components) ? nuxt.options.components.transform : undefined,
-          experimentalComponentIslands: nuxt.options.experimental.componentIslands
+          experimentalComponentIslands: !!nuxt.options.experimental.componentIslands
         }))
 
         if (nuxt.options.experimental.componentIslands && mode === 'server') {
diff --git a/packages/nuxt/src/core/templates.ts b/packages/nuxt/src/core/templates.ts
index 55f3013dd2..4442da78ef 100644
--- a/packages/nuxt/src/core/templates.ts
+++ b/packages/nuxt/src/core/templates.ts
@@ -329,6 +329,7 @@ export const nuxtConfigTemplate = {
       ...Object.entries(ctx.nuxt.options.app).map(([k, v]) => `export const ${camelCase('app-' + k)} = ${JSON.stringify(v)}`),
       `export const renderJsonPayloads = ${!!ctx.nuxt.options.experimental.renderJsonPayloads}`,
       `export const componentIslands = ${!!ctx.nuxt.options.experimental.componentIslands}`,
+      `export const remoteComponentIslands = ${ctx.nuxt.options.experimental.componentIslands === 'local+remote'}`,
       `export const devPagesDir = ${ctx.nuxt.options.dev ? JSON.stringify(ctx.nuxt.options.dir.pages) : 'null'}`,
       `export const devRootDir = ${ctx.nuxt.options.dev ? JSON.stringify(ctx.nuxt.options.rootDir) : 'null'}`
     ].join('\n\n')
diff --git a/packages/schema/src/config/experimental.ts b/packages/schema/src/config/experimental.ts
index 17507c8f4e..5399ed7724 100644
--- a/packages/schema/src/config/experimental.ts
+++ b/packages/schema/src/config/experimental.ts
@@ -137,8 +137,15 @@ export default defineUntypedSchema({
 
     /**
      * Experimental component islands support with <NuxtIsland> and .island.vue files.
+     * @type {true | 'local' | 'local+remote' | false}
      */
-    componentIslands: false,
+    componentIslands: {
+      $resolve: (val) => {
+        if (typeof val === 'string') { return val }
+        if (val === true) { return 'local' }
+        return false
+      }
+    },
 
     /**
      * Config schema support