diff --git a/docs/content/3.docs/1.usage/8.error-handling.md b/docs/content/3.docs/1.usage/8.error-handling.md
new file mode 100644
index 0000000000..21a8cc3b1c
--- /dev/null
+++ b/docs/content/3.docs/1.usage/8.error-handling.md
@@ -0,0 +1,90 @@
+# Error handling
+
+## Handling errors
+
+Nuxt 3 is a full-stack framework, which means there are several sources of unpreventable user runtime errors that can happen in different contexts:
+
+1. Errors during the Vue rendering lifecycle (SSR + SPA)
+1. Errors during API or Nitro server lifecycle
+1. Server and client startup errors (SSR + SPA)
+
+### Errors during the Vue rendering lifecycle (SSR + SPA)
+
+You can hook into Vue errors using [`onErrorCaptured`](https://vuejs.org/api/composition-api-lifecycle.html#onerrorcaptured).
+
+In addition, Nuxt provides a `vue:error` hook that will be called if there are any errors that propagate up to the top level.
+
+If you are using a error reporting framework, you can provide a global handler through [`vueApp.config.errorHandler`](https://vuejs.org/api/application.html#app-config-errorhandler). It will receive all Vue errors, even if they are handled.
+
+#### Example with global error reporting framework
+
+```js
+export default defineNuxtPlugin((nuxtApp) => {
+  nuxtApp.vueApp.config.errorHandler = (error, context) => {
+    // ...
+  }
+})
+```
+
+### Server and client startup errors (SSR + SPA)
+
+Nuxt provides an `app:error` hook that will be called if there are any errors in starting your Nuxt application.
+
+This includes:
+
+* running Nuxt plugins
+* processing `app:created` and `app:beforeMount` hooks
+* mounting the app (on client-side), though you should handle this case with `onErrorCaptured` or with `vue:error`
+* processing the `app:mounted` hook
+
+### Errors during API or Nitro server lifecycle
+
+You cannot currently define a server-side handler for these errors, but can render an error page (see the next section).
+
+## Rendering an error page
+
+When Nuxt encounters a fatal error, whether during the server lifecycle, or when rendering your Vue application (both SSR and SPA), it will either render a JSON response (if requested with `Accept: application/json` header) or an HTML error page.
+
+You can customize this error page by adding `~/error.vue` in the source directory of your application, alongside `app.vue`. This page has a single prop - `error` which contains an error for you to handle.
+
+When you are ready to remove the error page, you can call the `clearError` helper function, which takes an optional path to redirect to (for example, if you want to navigate to a 'safe' page).
+
+::alert{type="warning"}
+Make sure to check before using anything dependent on Nuxt plugins, such as `$route` or `useRouter`, as if a plugin threw an error, then it won't be re-run until you clear the error.
+::
+
+### Example
+
+```vue [error.vue]
+<template>
+  <button @click="handleError">Clear errors</button>
+</template>
+
+<script setup>
+const props = defineProps({
+  error: Object
+})
+
+const handleError = () => clearError({ redirect: '/' })
+</script>
+```
+
+## Error helper methods
+
+### useError
+
+* `function useError (): Ref<any>`
+
+This function will return the global Nuxt error that is being handled.
+
+### throwError
+
+* `function throwError (err: string | Error): Error`
+
+You can call this function at any point on client-side, or (on server side) directly within middleware, plugins or `setup()` functions. It will trigger a full-screen error page (as above) which you can clear with `clearError`.
+
+### clearError
+
+* `function clearError (redirect?: string): Promise<void>`
+
+This function will clear the currently handled Nuxt error. It also takes an optional path to redirect to (for example, if you want to navigate to a 'safe' page).
diff --git a/examples/with-errors/app.vue b/examples/with-errors/app.vue
new file mode 100644
index 0000000000..8632613624
--- /dev/null
+++ b/examples/with-errors/app.vue
@@ -0,0 +1,45 @@
+<script setup lang="ts">
+import { throwError } from '#app'
+const route = useRoute()
+if ('setup' in route.query) {
+  throw new Error('error in setup')
+}
+if ('mounted' in route.query) {
+  onMounted(() => {
+    throw new Error('error in mounted')
+  })
+}
+function triggerError () {
+  throw new Error('manually triggered error')
+}
+</script>
+
+<template>
+  <NuxtExampleLayout example="with-errors">
+    <template #nav>
+      <nav class="flex align-center gap-4 p-4">
+        <NuxtLink to="/" class="n-link-base">
+          Home
+        </NuxtLink>
+        <NuxtLink to="/404" class="n-link-base">
+          404
+        </NuxtLink>
+        <NuxtLink to="/?middleware" class="n-link-base">
+          Middleware
+        </NuxtLink>
+        <button class="n-link-base" @click="throwError">
+          Trigger fatal error
+        </button>
+        <button class="n-link-base" @click="triggerError">
+          Trigger non-fatal error
+        </button>
+      </nav>
+    </template>
+
+    <template #footer>
+      <div class="text-center p-4 op-50">
+        Current route: <code>{{ route.path }}</code>
+      </div>
+    </template>
+  </NuxtExampleLayout>
+</template>
diff --git a/examples/with-errors/error.vue b/examples/with-errors/error.vue
new file mode 100644
index 0000000000..2b48035938
--- /dev/null
+++ b/examples/with-errors/error.vue
@@ -0,0 +1,26 @@
+<template>
+  <div class="relative font-sans" n="green6">
+    <div class="container max-w-200 mx-auto py-10 px-4">
+      <h1>{{ error.message }}</h1>
+      There was an error 😱
+
+      <button @click="handleError">
+        Clear error
+      </button>
+      <NuxtLink to="/404">
+        Trigger another error
+      </NuxtLink>
+      <NuxtLink to="/">
+        Navigate home
+      </NuxtLink>
+    </div>
+  </div>
+</template>
+
+<script setup lang="ts">
+defineProps({
+  error: Object
+})
+
+const handleError = () => clearError({ redirect: '/' })
+</script>
diff --git a/examples/with-errors/middleware/error.global.ts b/examples/with-errors/middleware/error.global.ts
new file mode 100644
index 0000000000..a8d658adf0
--- /dev/null
+++ b/examples/with-errors/middleware/error.global.ts
@@ -0,0 +1,5 @@
+export default defineNuxtRouteMiddleware((to) => {
+  if ('middleware' in to.query) {
+    return throwError('error in middleware')
+  }
+})
diff --git a/examples/with-errors/nuxt.config.ts b/examples/with-errors/nuxt.config.ts
new file mode 100644
index 0000000000..9850816d15
--- /dev/null
+++ b/examples/with-errors/nuxt.config.ts
@@ -0,0 +1,7 @@
+import { defineNuxtConfig } from 'nuxt3'
+
+export default defineNuxtConfig({
+  modules: [
+    '@nuxt/ui'
+  ]
+})
diff --git a/examples/with-errors/package.json b/examples/with-errors/package.json
new file mode 100644
index 0000000000..e73ff53ed4
--- /dev/null
+++ b/examples/with-errors/package.json
@@ -0,0 +1,13 @@
+{
+  "name": "example-with-errors",
+  "private": true,
+  "scripts": {
+    "build": "nuxi build",
+    "dev": "nuxi dev",
+    "start": "nuxi preview"
+  },
+  "devDependencies": {
+    "@nuxt/ui": "npm:@nuxt/ui-edge@latest",
+    "nuxt3": "latest"
+  }
+}
diff --git a/examples/with-errors/pages/index.vue b/examples/with-errors/pages/index.vue
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/examples/with-errors/plugins/error.ts b/examples/with-errors/plugins/error.ts
new file mode 100644
index 0000000000..b06a954765
--- /dev/null
+++ b/examples/with-errors/plugins/error.ts
@@ -0,0 +1,20 @@
+export default defineNuxtPlugin((nuxtApp) => {
+  nuxtApp.hook('vue:error', (..._args) => {
+    console.log('vue:error')
+    // if (process.client) {
+    //   console.log(..._args)
+    // }
+  })
+  nuxtApp.hook('app:error', (..._args) => {
+    console.log('app:error')
+    // if (process.client) {
+    //   console.log(..._args)
+    // }
+  })
+  nuxtApp.vueApp.config.errorHandler = (..._args) => {
+    console.log('global error handler')
+    // if (process.client) {
+    //   console.log(..._args)
+    // }
+  }
+})
diff --git a/examples/with-errors/server/middleware/error.ts b/examples/with-errors/server/middleware/error.ts
new file mode 100644
index 0000000000..0575be5532
--- /dev/null
+++ b/examples/with-errors/server/middleware/error.ts
@@ -0,0 +1,8 @@
+import { useQuery, defineMiddleware } from 'h3'
+
+export default defineMiddleware((req, res, next) => {
+  if ('api' in useQuery(req)) {
+    throw new Error('Server middleware error')
+  }
+  next()
+})
diff --git a/examples/with-errors/tsconfig.json b/examples/with-errors/tsconfig.json
new file mode 100644
index 0000000000..4b34df1571
--- /dev/null
+++ b/examples/with-errors/tsconfig.json
@@ -0,0 +1,3 @@
+{
+  "extends": "./.nuxt/tsconfig.json"
+}
diff --git a/packages/bridge/src/auto-imports.ts b/packages/bridge/src/auto-imports.ts
index bce37f8f7c..b5e108eda3 100644
--- a/packages/bridge/src/auto-imports.ts
+++ b/packages/bridge/src/auto-imports.ts
@@ -4,7 +4,7 @@ import type { Preset } from 'unimport'
 import autoImports from '../../nuxt3/src/auto-imports/module'
 import { vuePreset, commonPresets, appPreset } from '../../nuxt3/src/auto-imports/presets'
 
-const UnsupportedImports = new Set(['useAsyncData', 'useFetch'])
+const UnsupportedImports = new Set(['useAsyncData', 'useFetch', 'useError', 'throwError', 'clearError'])
 const CapiHelpers = new Set(Object.keys(CompositionApi))
 
 export function setupAutoImports () {
diff --git a/packages/nitro/package.json b/packages/nitro/package.json
index 84468cf40c..c4b979ee7f 100644
--- a/packages/nitro/package.json
+++ b/packages/nitro/package.json
@@ -15,9 +15,9 @@
   "dependencies": {
     "@cloudflare/kv-asset-handler": "^0.2.0",
     "@netlify/functions": "^1.0.0",
-    "@nuxt/design": "0.1.5",
     "@nuxt/devalue": "^2.0.0",
     "@nuxt/kit": "3.0.0",
+    "@nuxt/ui-templates": "npm:@nuxt/ui-templates-edge@latest",
     "@rollup/plugin-alias": "^3.1.9",
     "@rollup/plugin-commonjs": "^21.0.2",
     "@rollup/plugin-inject": "^4.0.4",
diff --git a/packages/nitro/src/runtime/app/render.ts b/packages/nitro/src/runtime/app/render.ts
index 73e8d9880f..657564b4f8 100644
--- a/packages/nitro/src/runtime/app/render.ts
+++ b/packages/nitro/src/runtime/app/render.ts
@@ -1,6 +1,7 @@
 import type { ServerResponse } from 'http'
 import { createRenderer } from 'vue-bundle-renderer'
 import devalue from '@nuxt/devalue'
+import { useQuery } from 'h3'
 import { privateConfig, publicConfig } from './config'
 import { buildAssetsURL } from './paths'
 // @ts-ignore
@@ -70,7 +71,9 @@ function renderToString (ssrContext) {
 }
 
 export async function renderMiddleware (req, res: ServerResponse) {
-  let url = req.url
+  // Whether we're rendering an error page
+  const ssrError = req.url.startsWith('/__error') ? useQuery(req) : null
+  let url = ssrError?.url || req.url
 
   // payload.json request detection
   let isPayloadReq = false
@@ -86,15 +89,23 @@ export async function renderMiddleware (req, res: ServerResponse) {
     res,
     runtimeConfig: { private: privateConfig, public: publicConfig },
     noSSR: req.spa || req.headers['x-nuxt-no-ssr'],
-    ...(req.context || {})
+    ...(req.context || {}),
+    error: ssrError
   }
 
   // Render app
-  const rendered = await renderToString(ssrContext)
+  const rendered = await renderToString(ssrContext).catch((e) => {
+    if (!ssrError) { throw e }
+  })
+
+  // If we error on rendering error page, we bail out and directly return to the error handler
+  if (!rendered) { return }
 
   // Handle errors
-  if (ssrContext.error) {
-    throw ssrContext.error
+  const error = ssrContext.error /* nuxt 3 */ || ssrContext.nuxt?.error /* nuxt 2 */
+  if (error && !ssrError) {
+    // trigger a re-render by onError handler
+    throw error
   }
 
   if (ssrContext.redirected || res.writableEnded) {
@@ -107,7 +118,6 @@ export async function renderMiddleware (req, res: ServerResponse) {
 
   // TODO: nuxt3 should not reuse `nuxt` property for different purpose!
   const payload = ssrContext.payload /* nuxt 3 */ || ssrContext.nuxt /* nuxt 2 */
-
   if (process.env.NUXT_FULL_STATIC) {
     payload.staticAssetsBase = STATIC_ASSETS_BASE
   }
@@ -121,8 +131,7 @@ export async function renderMiddleware (req, res: ServerResponse) {
     res.setHeader('Content-Type', 'text/html;charset=UTF-8')
   }
 
-  const error = ssrContext.nuxt && ssrContext.nuxt.error
-  res.statusCode = error ? error.statusCode : 200
+  res.statusCode = res.statusCode || 200
   res.end(data, 'utf-8')
 }
 
diff --git a/packages/nitro/src/runtime/server/error.ts b/packages/nitro/src/runtime/server/error.ts
index b38088cd1d..7e35b5748c 100644
--- a/packages/nitro/src/runtime/server/error.ts
+++ b/packages/nitro/src/runtime/server/error.ts
@@ -1,13 +1,14 @@
 // import ansiHTML from 'ansi-html'
 import type { IncomingMessage, ServerResponse } from 'http'
-import { error500, error404, errorDev } from '@nuxt/design'
+import { withQuery } from 'ufo'
+import { $fetch } from '.'
 const cwd = process.cwd()
 
 const hasReqHeader = (req, header, includes) => req.headers[header] && req.headers[header].toLowerCase().includes(includes)
 
 const isDev = process.env.NODE_ENV === 'development'
 
-export function handleError (error, req: IncomingMessage, res: ServerResponse) {
+export async function handleError (error, req: IncomingMessage, res: ServerResponse) {
   const isJsonRequest = hasReqHeader(req, 'accept', 'application/json') || hasReqHeader(req, 'user-agent', 'curl/') || hasReqHeader(req, 'user-agent', 'httpie/')
 
   const stack = (error.stack || '')
@@ -31,18 +32,17 @@ export function handleError (error, req: IncomingMessage, res: ServerResponse) {
   const is404 = error.statusCode === 404
 
   const errorObject = {
+    url: req.url,
     statusCode: error.statusCode || 500,
-    statusMessage: is404 ? 'Page Not Found' : 'Internal Server Error',
+    statusMessage: error.statusMessage ?? is404 ? 'Page Not Found' : 'Internal Server Error',
+    message: error.message || error.toString(),
     description: isDev && !is404
-      ? `
-    <h1>${error.message}</h1>
-    <pre>${stack.map(i => `<span class="stack${i.internal ? ' internal' : ''}">${i.text}</span>`).join('\n')}</pre>
-    `
+      ? `<pre>${stack.map(i => `<span class="stack${i.internal ? ' internal' : ''}">${i.text}</span>`).join('\n')}</pre>`
       : ''
   }
 
-  res.statusCode = error.statusCode || 500
-  res.statusMessage = error.statusMessage || 'Internal Server Error'
+  res.statusCode = errorObject.statusCode
+  res.statusMessage = errorObject.statusMessage
 
   // Console output
   if (!is404) {
@@ -56,8 +56,9 @@ export function handleError (error, req: IncomingMessage, res: ServerResponse) {
   }
 
   // HTML response
-  const errorTemplate = is404 ? error404 : (isDev ? errorDev : error500)
-  const html = errorTemplate(errorObject)
+  const url = withQuery('/_nitro/__error', errorObject)
+  const html = await $fetch(url).catch(() => errorObject.statusMessage)
+
   res.setHeader('Content-Type', 'text/html;charset=UTF-8')
   res.end(html)
 }
diff --git a/packages/nitro/src/runtime/server/index.ts b/packages/nitro/src/runtime/server/index.ts
index ce38f7c0b2..feb628f949 100644
--- a/packages/nitro/src/runtime/server/index.ts
+++ b/packages/nitro/src/runtime/server/index.ts
@@ -1,4 +1,4 @@
-import { createApp, useBase } from 'h3'
+import { createApp, lazyHandle, useBase } from 'h3'
 import { createFetch, Headers } from 'ohmyfetch'
 import destr from 'destr'
 import { createCall, createFetch as createLocalFetch } from 'unenv/runtime/fetch/index'
@@ -13,9 +13,12 @@ const app = createApp({
   onError: handleError
 })
 
+const renderMiddleware = lazyHandle(() => import('../app/render').then(e => e.renderMiddleware))
+
+app.use('/_nitro', renderMiddleware)
 app.use(timingMiddleware)
 app.use(serverMiddleware)
-app.use(() => import('../app/render').then(e => e.renderMiddleware), { lazy: true })
+app.use(renderMiddleware)
 
 export const stack = app.stack
 export const handle = useBase(baseURL(), app)
diff --git a/packages/nitro/src/server/dev.ts b/packages/nitro/src/server/dev.ts
index b0e10ae6ee..fa54419587 100644
--- a/packages/nitro/src/server/dev.ts
+++ b/packages/nitro/src/server/dev.ts
@@ -2,7 +2,7 @@ import { Worker } from 'worker_threads'
 
 import { IncomingMessage, ServerResponse } from 'http'
 import { existsSync, promises as fsp } from 'fs'
-import { loading as loadingTemplate } from '@nuxt/design'
+import { loading as loadingTemplate } from '@nuxt/ui-templates'
 import chokidar, { FSWatcher } from 'chokidar'
 import debounce from 'p-debounce'
 import { promisifyHandle, createApp, Middleware, useBase } from 'h3'
diff --git a/packages/nuxi/package.json b/packages/nuxi/package.json
index 22fcf9bdc2..37802b889b 100644
--- a/packages/nuxi/package.json
+++ b/packages/nuxi/package.json
@@ -17,9 +17,9 @@
     "prepack": "unbuild"
   },
   "devDependencies": {
-    "@nuxt/design": "0.1.5",
     "@nuxt/kit": "3.0.0",
     "@nuxt/schema": "3.0.0",
+    "@nuxt/ui-templates": "npm:@nuxt/ui-templates-edge@latest",
     "@types/clear": "^0",
     "@types/mri": "^1.1.1",
     "@types/rimraf": "^3",
diff --git a/packages/nuxi/src/commands/dev.ts b/packages/nuxi/src/commands/dev.ts
index e08bb5d685..faf79451fb 100644
--- a/packages/nuxi/src/commands/dev.ts
+++ b/packages/nuxi/src/commands/dev.ts
@@ -86,7 +86,7 @@ export default defineNuxtCommand({
           dLoad(true, `Directory \`${dir}/\` ${event === 'addDir' ? 'created' : 'removed'}`)
         }
       } else if (isFileChange) {
-        if (file.match(/app\.(js|ts|mjs|jsx|tsx|vue)$/)) {
+        if (file.match(/(app|error)\.(js|ts|mjs|jsx|tsx|vue)$/)) {
           dLoad(true, `\`${relative(rootDir, file)}\` ${event === 'add' ? 'created' : 'removed'}`)
         }
       }
diff --git a/packages/nuxi/src/utils/server.ts b/packages/nuxi/src/utils/server.ts
index 43aaf5223e..015386cefa 100644
--- a/packages/nuxi/src/utils/server.ts
+++ b/packages/nuxi/src/utils/server.ts
@@ -1,6 +1,6 @@
 import type { RequestListener } from 'http'
 import type { ListenOptions } from 'listhen'
-import { loading } from '@nuxt/design'
+import { loading } from '@nuxt/ui-templates'
 
 export function createServer (defaultApp?) {
   const listener = createDynamicFunction(defaultApp || createLoadingHandler('Loading...'))
diff --git a/packages/nuxt3/package.json b/packages/nuxt3/package.json
index bc36929930..95ebfde32b 100644
--- a/packages/nuxt3/package.json
+++ b/packages/nuxt3/package.json
@@ -30,10 +30,10 @@
     "prepack": "unbuild"
   },
   "dependencies": {
-    "@nuxt/design": "^0.1.5",
     "@nuxt/kit": "3.0.0",
     "@nuxt/nitro": "3.0.0",
     "@nuxt/schema": "3.0.0",
+    "@nuxt/ui-templates": "npm:@nuxt/ui-templates-edge@latest",
     "@nuxt/vite-builder": "3.0.0",
     "@vue/reactivity": "^3.2.31",
     "@vue/shared": "^3.2.31",
diff --git a/packages/nuxt3/src/app/components/nuxt-error-page.vue b/packages/nuxt3/src/app/components/nuxt-error-page.vue
new file mode 100644
index 0000000000..1d14f6869d
--- /dev/null
+++ b/packages/nuxt3/src/app/components/nuxt-error-page.vue
@@ -0,0 +1,42 @@
+<template>
+  <ErrorTemplate v-bind="{ statusCode, statusMessage, description, stack }" />
+</template>
+
+<script setup lang="ts">
+import Error404 from '@nuxt/ui-templates/templates/error-404.vue'
+import Error500 from '@nuxt/ui-templates/templates/error-500.vue'
+import ErrorDev from '@nuxt/ui-templates/templates/error-dev.vue'
+
+const props = defineProps({
+  error: Object
+})
+
+const error = props.error
+
+// TODO: extract to a separate utility
+const stacktrace = (error.stack || '')
+  .split('\n')
+  .splice(1)
+  .map((line) => {
+    const text = line
+      .replace('webpack:/', '')
+      .replace('.vue', '.js') // TODO: Support sourcemap
+      .trim()
+    return {
+      text,
+      internal: (line.includes('node_modules') && !line.includes('.cache')) ||
+          line.includes('internal') ||
+          line.includes('new Promise')
+    }
+  }).map(i => `<span class="stack${i.internal ? ' internal' : ''}">${i.text}</span>`).join('\n')
+
+// Error page props
+const statusCode = String(error.statusCode || 500)
+const is404 = statusCode === '404'
+
+const statusMessage = error.statusMessage ?? is404 ? 'Page Not Found' : 'Internal Server Error'
+const description = error.message || error.toString()
+const stack = process.dev && !is404 ? error.description || `<pre>${stacktrace}</pre>` : undefined
+
+const ErrorTemplate = is404 ? Error404 : process.dev ? ErrorDev : Error500
+</script>
diff --git a/packages/nuxt3/src/app/components/nuxt-root.vue b/packages/nuxt3/src/app/components/nuxt-root.vue
index 6b9efdd1c1..d52459c563 100644
--- a/packages/nuxt3/src/app/components/nuxt-root.vue
+++ b/packages/nuxt3/src/app/components/nuxt-root.vue
@@ -1,22 +1,31 @@
 <template>
   <Suspense @resolve="onResolve">
-    <App />
+    <ErrorComponent v-if="error" :error="error" />
+    <App v-else />
   </Suspense>
 </template>
 
-<script>
-import { useNuxtApp } from '#app'
+<script setup lang="ts">
+import { onErrorCaptured } from 'vue'
+import { callWithNuxt, throwError, useError, useNuxtApp } from '#app'
+// @ts-ignore
+import ErrorComponent from '#build/error-component.mjs'
 
-export default {
-  setup () {
-    const nuxtApp = useNuxtApp()
-    const results = nuxtApp.hooks.callHookWith(hooks => hooks.map(hook => hook()), 'vue:setup')
-    if (process.dev && results && results.some(i => i && 'then' in i)) {
-      console.error('[nuxt] Error in `vue:setup`. Callbacks must be synchronous.')
-    }
-    return {
-      onResolve: () => nuxtApp.callHook('app:suspense:resolve')
-    }
-  }
+const nuxtApp = useNuxtApp()
+const onResolve = () => nuxtApp.callHook('app:suspense:resolve')
+
+// vue:setup hook
+const results = nuxtApp.hooks.callHookWith(hooks => hooks.map(hook => hook()), 'vue:setup')
+if (process.dev && results && results.some(i => i && 'then' in i)) {
+  console.error('[nuxt] Error in `vue:setup`. Callbacks must be synchronous.')
 }
+
+// error handling
+const error = useError()
+onErrorCaptured((err, target, info) => {
+  nuxtApp.hooks.callHook('vue:error', err, target, info).catch(hookError => console.error('[nuxt] Error in `vue:error` hook', hookError))
+  if (process.server) {
+    callWithNuxt(nuxtApp, throwError, [err])
+  }
+})
 </script>
diff --git a/packages/nuxt3/src/app/components/nuxt-welcome.vue b/packages/nuxt3/src/app/components/nuxt-welcome.vue
deleted file mode 100644
index 9e3fb49ea3..0000000000
--- a/packages/nuxt3/src/app/components/nuxt-welcome.vue
+++ /dev/null
@@ -1,13 +0,0 @@
-<template>
-  <!-- eslint-disable-next-line vue/no-v-html -->
-  <div v-html="html" />
-</template>
-
-<script>
-import { welcome as welcomeTemplate } from '@nuxt/design'
-export default ({
-  computed: {
-    html: () => welcomeTemplate({})
-  }
-})
-</script>
diff --git a/packages/nuxt3/src/app/composables/error.ts b/packages/nuxt3/src/app/composables/error.ts
new file mode 100644
index 0000000000..cdee4541c7
--- /dev/null
+++ b/packages/nuxt3/src/app/composables/error.ts
@@ -0,0 +1,30 @@
+import { useNuxtApp, useState } from '#app'
+
+export const useError = () => {
+  const nuxtApp = useNuxtApp()
+  return useState('error', () => process.server ? nuxtApp.ssrContext.error : nuxtApp.payload.error)
+}
+
+export const throwError = (_err: string | Error) => {
+  const nuxtApp = useNuxtApp()
+  const error = useError()
+  const err = typeof _err === 'string' ? new Error(_err) : _err
+  nuxtApp.callHook('app:error', err)
+  if (process.server) {
+    nuxtApp.ssrContext.error = nuxtApp.ssrContext.error || err
+  } else {
+    error.value = error.value || err
+  }
+
+  return err
+}
+
+export const clearError = async (options: { redirect?: string } = {}) => {
+  const nuxtApp = useNuxtApp()
+  const error = useError()
+  nuxtApp.callHook('app:error:cleared', options)
+  if (options.redirect) {
+    await nuxtApp.$router.replace(options.redirect)
+  }
+  error.value = null
+}
diff --git a/packages/nuxt3/src/app/composables/index.ts b/packages/nuxt3/src/app/composables/index.ts
index d078732225..9f47d42c53 100644
--- a/packages/nuxt3/src/app/composables/index.ts
+++ b/packages/nuxt3/src/app/composables/index.ts
@@ -3,6 +3,7 @@ export { useAsyncData, useLazyAsyncData } from './asyncData'
 export type { AsyncDataOptions, AsyncData } from './asyncData'
 export { useHydration } from './hydrate'
 export { useState } from './state'
+export { clearError, throwError, useError } from './error'
 export { useFetch, useLazyFetch } from './fetch'
 export type { FetchResult, UseFetchOptions } from './fetch'
 export { useCookie } from './cookie'
diff --git a/packages/nuxt3/src/app/entry.ts b/packages/nuxt3/src/app/entry.ts
index 03cfd67e23..e62eefb455 100644
--- a/packages/nuxt3/src/app/entry.ts
+++ b/packages/nuxt3/src/app/entry.ts
@@ -19,9 +19,13 @@ if (process.server) {
 
     const nuxt = createNuxtApp({ vueApp, ssrContext })
 
-    await applyPlugins(nuxt, plugins)
-
-    await nuxt.hooks.callHook('app:created', vueApp)
+    try {
+      await applyPlugins(nuxt, plugins)
+      await nuxt.hooks.callHook('app:created', vueApp)
+    } catch (err) {
+      await nuxt.callHook('app:error', err)
+      ssrContext.error = ssrContext.error || err
+    }
 
     return vueApp
   }
@@ -43,19 +47,27 @@ if (process.client) {
 
     const nuxt = createNuxtApp({ vueApp })
 
-    await applyPlugins(nuxt, plugins)
-
-    await nuxt.hooks.callHook('app:created', vueApp)
-    await nuxt.hooks.callHook('app:beforeMount', vueApp)
-
     nuxt.hooks.hookOnce('app:suspense:resolve', () => {
       nuxt.isHydrating = false
     })
 
-    vueApp.mount('#__nuxt')
+    try {
+      await applyPlugins(nuxt, plugins)
+    } catch (err) {
+      await nuxt.callHook('app:error', err)
+      nuxt.payload.error = nuxt.payload.error || err
+    }
 
-    await nuxt.hooks.callHook('app:mounted', vueApp)
-    await nextTick()
+    try {
+      await nuxt.hooks.callHook('app:created', vueApp)
+      await nuxt.hooks.callHook('app:beforeMount', vueApp)
+      vueApp.mount('#__nuxt')
+      await nuxt.hooks.callHook('app:mounted', vueApp)
+      await nextTick()
+    } catch (err) {
+      await nuxt.callHook('app:error', err)
+      nuxt.payload.error = nuxt.payload.error || err
+    }
   }
 
   entry().catch((error) => {
diff --git a/packages/nuxt3/src/app/nuxt.ts b/packages/nuxt3/src/app/nuxt.ts
index c07f9b45a5..0b7b182bb9 100644
--- a/packages/nuxt3/src/app/nuxt.ts
+++ b/packages/nuxt3/src/app/nuxt.ts
@@ -1,6 +1,6 @@
 /* eslint-disable no-use-before-define */
 import { getCurrentInstance, reactive } from 'vue'
-import type { App, VNode } from 'vue'
+import type { App, onErrorCaptured, VNode } from 'vue'
 import { createHooks, Hookable } from 'hookable'
 import type { RuntimeConfig } from '@nuxt/schema'
 import { legacyPlugin, LegacyContext } from './compat/legacy-app'
@@ -21,10 +21,13 @@ export interface RuntimeNuxtHooks {
   'app:mounted': (app: App<Element>) => HookResult
   'app:rendered': () => HookResult
   'app:suspense:resolve': (Component?: VNode) => HookResult
+  'app:error': (err: any) => HookResult
+  'app:error:cleared': (options: { redirect?: string }) => HookResult
   'page:start': (Component?: VNode) => HookResult
   'page:finish': (Component?: VNode) => HookResult
   'meta:register': (metaRenderers: Array<(nuxt: NuxtApp) => NuxtMeta | Promise<NuxtMeta>>) => HookResult
   'vue:setup': () => void
+  'vue:error': (...args: Parameters<Parameters<typeof onErrorCaptured>[0]>) => HookResult
 }
 
 interface _NuxtApp {
diff --git a/packages/nuxt3/src/app/plugins/router.ts b/packages/nuxt3/src/app/plugins/router.ts
index c64a4ff8a6..3e0aca287e 100644
--- a/packages/nuxt3/src/app/plugins/router.ts
+++ b/packages/nuxt3/src/app/plugins/router.ts
@@ -4,6 +4,7 @@ import { NuxtApp } from '@nuxt/schema'
 import { createError } from 'h3'
 import { defineNuxtPlugin } from '..'
 import { callWithNuxt } from '../nuxt'
+import { clearError, throwError } from '#app'
 
 declare module 'vue' {
   export interface GlobalComponents {
@@ -106,6 +107,12 @@ export default defineNuxtPlugin<{ route: Route, router: Router }>((nuxtApp) => {
     try {
       // Resolve route
       const to = getRouteFromPath(url)
+
+      if (process.client && !nuxtApp.isHydrating) {
+      // Clear any existing errors
+        await callWithNuxt(nuxtApp as NuxtApp, clearError)
+      }
+
       // Run beforeEach hooks
       for (const middleware of hooks['navigate:before']) {
         const result = await middleware(to, route)
@@ -196,8 +203,7 @@ export default defineNuxtPlugin<{ route: Route, router: Router }>((nuxtApp) => {
           const error = result || createError({
             statusMessage: `Route navigation aborted: ${nuxtApp.ssrContext.url}`
           })
-          nuxtApp.ssrContext.error = error
-          throw error
+          return callWithNuxt(nuxtApp, throwError, [error])
         }
       }
       if (result || result === false) { return result }
diff --git a/packages/nuxt3/src/auto-imports/presets.ts b/packages/nuxt3/src/auto-imports/presets.ts
index 42ea854ab7..1195525492 100644
--- a/packages/nuxt3/src/auto-imports/presets.ts
+++ b/packages/nuxt3/src/auto-imports/presets.ts
@@ -37,7 +37,10 @@ export const appPreset = defineUnimportPreset({
     'defineNuxtRouteMiddleware',
     'navigateTo',
     'abortNavigation',
-    'addRouteMiddleware'
+    'addRouteMiddleware',
+    'throwError',
+    'clearError',
+    'useError'
   ]
 })
 
diff --git a/packages/nuxt3/src/core/app.ts b/packages/nuxt3/src/core/app.ts
index d912f7a442..67120a258a 100644
--- a/packages/nuxt3/src/core/app.ts
+++ b/packages/nuxt3/src/core/app.ts
@@ -2,7 +2,7 @@ import { promises as fsp } from 'fs'
 import { dirname, resolve } from 'pathe'
 import defu from 'defu'
 import type { Nuxt, NuxtApp, NuxtPlugin } from '@nuxt/schema'
-import { findPath, resolveFiles, normalizePlugin, normalizeTemplate, compileTemplate, templateUtils } from '@nuxt/kit'
+import { findPath, resolveFiles, normalizePlugin, normalizeTemplate, compileTemplate, templateUtils, tryResolveModule } from '@nuxt/kit'
 
 import * as defaultTemplates from './templates'
 
@@ -59,12 +59,17 @@ export async function resolveApp (nuxt: Nuxt, app: NuxtApp) {
     app.mainComponent = await findPath(['~/App', '~/app'])
   }
   if (!app.mainComponent) {
-    app.mainComponent = resolve(nuxt.options.appDir, 'components/nuxt-welcome.vue')
+    app.mainComponent = tryResolveModule('@nuxt/ui-templates/templates/welcome.vue')
   }
 
   // Default root component
   app.rootComponent = resolve(nuxt.options.appDir, 'components/nuxt-root.vue')
 
+  // Resolve error component
+  if (!app.errorComponent) {
+    app.errorComponent = (await findPath(['~/error'])) || resolve(nuxt.options.appDir, 'components/nuxt-error-page.vue')
+  }
+
   // Resolve plugins
   for (const config of [...nuxt.options._extends.map(layer => layer.config), nuxt.options]) {
     app.plugins.push(...[
diff --git a/packages/nuxt3/src/core/builder.ts b/packages/nuxt3/src/core/builder.ts
index 70c25b86fc..d196af81cf 100644
--- a/packages/nuxt3/src/core/builder.ts
+++ b/packages/nuxt3/src/core/builder.ts
@@ -10,10 +10,13 @@ export async function build (nuxt: Nuxt) {
   if (nuxt.options.dev) {
     watch(nuxt)
     nuxt.hook('builder:watch', async (event, path) => {
-      if (event !== 'change' && /app|plugins/i.test(path)) {
+      if (event !== 'change' && /app|error|plugins/i.test(path)) {
         if (path.match(/app/i)) {
           app.mainComponent = null
         }
+        if (path.match(/error/i)) {
+          app.errorComponent = null
+        }
         await generateApp(nuxt, app)
       }
     })
diff --git a/packages/nuxt3/src/core/nuxt.ts b/packages/nuxt3/src/core/nuxt.ts
index a98a0e3acc..0af512349c 100644
--- a/packages/nuxt3/src/core/nuxt.ts
+++ b/packages/nuxt3/src/core/nuxt.ts
@@ -1,7 +1,7 @@
 import { resolve } from 'pathe'
 import { createHooks } from 'hookable'
 import type { Nuxt, NuxtOptions, NuxtConfig, ModuleContainer, NuxtHooks } from '@nuxt/schema'
-import { loadNuxtConfig, LoadNuxtOptions, nuxtCtx, installModule, addComponent, addVitePlugin, addWebpackPlugin } from '@nuxt/kit'
+import { loadNuxtConfig, LoadNuxtOptions, nuxtCtx, installModule, addComponent, addVitePlugin, addWebpackPlugin, tryResolveModule } from '@nuxt/kit'
 // Temporary until finding better placement
 /* eslint-disable import/no-restricted-paths */
 import pagesModule from '../pages/module'
@@ -76,7 +76,7 @@ async function initNuxt (nuxt: Nuxt) {
   // Add <NuxtWelcome>
   addComponent({
     name: 'NuxtWelcome',
-    filePath: resolve(nuxt.options.appDir, 'components/nuxt-welcome.vue')
+    filePath: tryResolveModule('@nuxt/ui-templates/templates/welcome.vue')
   })
 
   // Add <ClientOnly>
@@ -108,6 +108,7 @@ export async function loadNuxt (opts: LoadNuxtOptions): Promise<Nuxt> {
   options._majorVersion = 3
   options._modules.push(pagesModule, metaModule, componentsModule, autoImportsModule)
   options.modulesDir.push(resolve(pkgDir, 'node_modules'))
+  options.build.transpile.push('@nuxt/ui-templates')
   options.alias['vue-demi'] = resolve(options.appDir, 'compat/vue-demi')
   options.alias['@vue/composition-api'] = resolve(options.appDir, 'compat/capi')
 
diff --git a/packages/nuxt3/src/core/templates.ts b/packages/nuxt3/src/core/templates.ts
index 2c5f8bb7e8..280943fc5e 100644
--- a/packages/nuxt3/src/core/templates.ts
+++ b/packages/nuxt3/src/core/templates.ts
@@ -33,6 +33,11 @@ export const rootComponentTemplate = {
   filename: 'root-component.mjs',
   getContents: (ctx: TemplateContext) => genExport(ctx.app.rootComponent, ['default'])
 }
+// TODO: Use an alias
+export const errorComponentTemplate = {
+  filename: 'error-component.mjs',
+  getContents: (ctx: TemplateContext) => genExport(ctx.app.errorComponent, ['default'])
+}
 
 export const cssTemplate = {
   filename: 'css.mjs',
diff --git a/packages/nuxt3/src/pages/module.ts b/packages/nuxt3/src/pages/module.ts
index 0527cc1974..ef5563d824 100644
--- a/packages/nuxt3/src/pages/module.ts
+++ b/packages/nuxt3/src/pages/module.ts
@@ -42,7 +42,7 @@ export default defineNuxtModule({
 
     nuxt.hook('app:resolve', (app) => {
       // Add default layout for pages
-      if (app.mainComponent.includes('nuxt-welcome')) {
+      if (app.mainComponent.includes('@nuxt/ui-templates')) {
         app.mainComponent = resolve(runtimeDir, 'app.vue')
       }
     })
diff --git a/packages/nuxt3/src/pages/runtime/router.ts b/packages/nuxt3/src/pages/runtime/router.ts
index 0e9f8a5aa1..27efae368a 100644
--- a/packages/nuxt3/src/pages/runtime/router.ts
+++ b/packages/nuxt3/src/pages/runtime/router.ts
@@ -9,7 +9,7 @@ import {
 import { createError } from 'h3'
 import NuxtPage from './page'
 import NuxtLayout from './layout'
-import { callWithNuxt, defineNuxtPlugin, useRuntimeConfig, NuxtApp } from '#app'
+import { callWithNuxt, defineNuxtPlugin, useRuntimeConfig, NuxtApp, throwError, clearError } from '#app'
 // @ts-ignore
 import routes from '#build/routes'
 // @ts-ignore
@@ -86,6 +86,11 @@ export default defineNuxtPlugin((nuxtApp) => {
       }
     }
 
+    if (process.client && !nuxtApp.isHydrating) {
+      // Clear any existing errors
+      await callWithNuxt(nuxtApp as NuxtApp, clearError)
+    }
+
     for (const entry of middlewareEntries) {
       const middleware = typeof entry === 'string' ? nuxtApp._middleware.named[entry] || await namedMiddleware[entry]?.().then(r => r.default || r) : entry
 
@@ -96,9 +101,10 @@ export default defineNuxtPlugin((nuxtApp) => {
       const result = await callWithNuxt(nuxtApp as NuxtApp, middleware, [to, from])
       if (process.server) {
         if (result === false || result instanceof Error) {
-          return result || createError({
+          const error = result || createError({
             statusMessage: `Route navigation aborted: ${nuxtApp.ssrContext.url}`
           })
+          return callWithNuxt(nuxtApp, throwError, [error])
         }
       }
       if (result || result === false) { return result }
@@ -110,6 +116,15 @@ export default defineNuxtPlugin((nuxtApp) => {
   })
 
   nuxtApp.hook('app:created', async () => {
+    router.afterEach((to) => {
+      if (to.matched.length === 0) {
+        callWithNuxt(nuxtApp, throwError, [createError({
+          statusCode: 404,
+          statusMessage: `Page not found: ${to.fullPath}`
+        })])
+      }
+    })
+
     if (process.server) {
       router.push(nuxtApp.ssrContext.url)
 
@@ -124,16 +139,8 @@ export default defineNuxtPlugin((nuxtApp) => {
 
     try {
       await router.isReady()
-
-      const is404 = router.currentRoute.value.matched.length === 0
-      if (process.server && is404) {
-        throw createError({
-          statusCode: 404,
-          statusMessage: `Page not found: ${nuxtApp.ssrContext.url}`
-        })
-      }
     } catch (error) {
-      nuxtApp.ssrContext.error = error
+      callWithNuxt(nuxtApp, throwError, [error])
     }
   })
 
diff --git a/packages/schema/src/types/nuxt.ts b/packages/schema/src/types/nuxt.ts
index 2f5988bc5b..82254090f4 100644
--- a/packages/schema/src/types/nuxt.ts
+++ b/packages/schema/src/types/nuxt.ts
@@ -53,6 +53,7 @@ export interface NuxtPlugin {
 export interface NuxtApp {
   mainComponent?: string
   rootComponent?: string
+  errorComponent?: string
   dir: string
   extensions: string[]
   plugins: NuxtPlugin[]
diff --git a/yarn.lock b/yarn.lock
index 92b50ae562..3721d193cd 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -2892,13 +2892,6 @@ __metadata:
   languageName: node
   linkType: hard
 
-"@nuxt/design@npm:0.1.5, @nuxt/design@npm:^0.1.5":
-  version: 0.1.5
-  resolution: "@nuxt/design@npm:0.1.5"
-  checksum: 1e75ba0c7e9519754d185133e1bc97d2056201b2c6ad99a9196ffb94e787a4ee9fa2a64b1dd868febece5b3370c8a50388033b65455edc939fe67bcc1f4bbe8b
-  languageName: node
-  linkType: hard
-
 "@nuxt/devalue@npm:^1.2.5":
   version: 1.2.5
   resolution: "@nuxt/devalue@npm:1.2.5"
@@ -3035,10 +3028,10 @@ __metadata:
   dependencies:
     "@cloudflare/kv-asset-handler": ^0.2.0
     "@netlify/functions": ^1.0.0
-    "@nuxt/design": 0.1.5
     "@nuxt/devalue": ^2.0.0
     "@nuxt/kit": 3.0.0
     "@nuxt/schema": 3.0.0
+    "@nuxt/ui-templates": "npm:@nuxt/ui-templates-edge@latest"
     "@rollup/plugin-alias": ^3.1.9
     "@rollup/plugin-commonjs": ^21.0.2
     "@rollup/plugin-inject": ^4.0.4
@@ -3294,6 +3287,13 @@ __metadata:
   languageName: node
   linkType: hard
 
+"@nuxt/ui-templates@npm:@nuxt/ui-templates-edge@latest":
+  version: 0.0.0-27449202.0cb54cc
+  resolution: "@nuxt/ui-templates-edge@npm:0.0.0-27449202.0cb54cc"
+  checksum: bbc709d35bf1c586bc604835caf8b6000e4cab22ad56d71d231a7d4e987ab8dd33a9adbba11af684f70826007ad3094480f38524160bf7c6f1a9dc1fcb375f79
+  languageName: node
+  linkType: hard
+
 "@nuxt/ui@npm:@nuxt/ui-edge@latest":
   version: 0.0.0-27376194.a859489
   resolution: "@nuxt/ui-edge@npm:0.0.0-27376194.a859489"
@@ -10570,6 +10570,15 @@ __metadata:
   languageName: unknown
   linkType: soft
 
+"example-with-errors@workspace:examples/with-errors":
+  version: 0.0.0-use.local
+  resolution: "example-with-errors@workspace:examples/with-errors"
+  dependencies:
+    "@nuxt/ui": "npm:@nuxt/ui-edge@latest"
+    nuxt3: latest
+  languageName: unknown
+  linkType: soft
+
 "example-with-layouts@workspace:examples/with-layouts":
   version: 0.0.0-use.local
   resolution: "example-with-layouts@workspace:examples/with-layouts"
@@ -15369,9 +15378,9 @@ __metadata:
   version: 0.0.0-use.local
   resolution: "nuxi@workspace:packages/nuxi"
   dependencies:
-    "@nuxt/design": 0.1.5
     "@nuxt/kit": 3.0.0
     "@nuxt/schema": 3.0.0
+    "@nuxt/ui-templates": "npm:@nuxt/ui-templates-edge@latest"
     "@types/clear": ^0
     "@types/mri": ^1.1.1
     "@types/rimraf": ^3
@@ -15476,10 +15485,10 @@ __metadata:
   version: 0.0.0-use.local
   resolution: "nuxt3@workspace:packages/nuxt3"
   dependencies:
-    "@nuxt/design": ^0.1.5
     "@nuxt/kit": 3.0.0
     "@nuxt/nitro": 3.0.0
     "@nuxt/schema": 3.0.0
+    "@nuxt/ui-templates": "npm:@nuxt/ui-templates-edge@latest"
     "@nuxt/vite-builder": 3.0.0
     "@types/fs-extra": ^9.0.13
     "@types/hash-sum": ^1.0.0