diff --git a/docs/2.guide/2.directory-structure/1.shared.md b/docs/2.guide/2.directory-structure/1.shared.md
new file mode 100644
index 0000000000..5c8330d31c
--- /dev/null
+++ b/docs/2.guide/2.directory-structure/1.shared.md
@@ -0,0 +1,98 @@
+---
+title: 'shared'
+head.title: 'shared/'
+description: 'Use the shared/ directory to share functionality between the Vue app and the Nitro server.'
+navigation.icon: 'i-ph-folder'
+---
+
+The `shared/` directory allows you to share code that can be used in both the Vue app and the Nitro server.
+
+::tip
+The `shared/` directory is available in Nuxt v3.14+.
+::
+
+::important
+Code in the `shared/` directory cannot import any Vue or Nitro code.
+::
+
+## Usage
+
+**Method 1:** Using named export
+
+```ts twoslash [shared/utils/capitalize.ts]
+export const capitalize = (input: string) => {
+  return input[0].toUpperCase() + input.slice(1)
+}
+```
+
+**Method 2:** Using default export
+
+```ts twoslash [shared/utils/capitalize.ts]
+export default function capitalize (input: string) {
+  return input[0].toUpperCase() + input.slice(1)
+}
+```
+
+**Usage:** You can now use auto-imported utility functions in `.js`, `.ts` and `.vue` files within your Vue app and the `server/` directory.
+
+If you have [set `compatibilityVersion: 4` in your `nuxt.config.ts`](/docs/getting-started/upgrade#opting-in-to-nuxt-4), you can use the auto-imported functions in the `app/` directory. This is part of Nuxt's progressive compatibility features preparing for version 4.
+
+```vue [app.vue]
+<script setup lang="ts">
+const hello = capitalize('hello')
+</script>
+
+<template>
+  <div>
+    {{ hello }}
+  </div>
+</template>
+```
+
+```ts [server/api/hello.get.ts]
+export default defineEventHandler((event) => {
+  return {
+    hello: capitalize('hello')
+  }
+})
+```
+
+## Auto Imports
+
+Only files in the `shared/utils/` and `shared/types/` directories will be auto-imported. Files nested within subdirectories of these directories will not be auto-imported.
+
+::tip
+The way `shared/utils` and `shared/types` auto-imports work and are scanned is identical to the [`composables/`](/docs/guide/directory-structure/composables) and [`utils/`](/docs/guide/directory-structure/utils) directories.
+::
+
+:read-more{to="/docs/guide/directory-structure/composables#how-files-are-scanned"}
+
+```bash [Directory Structure]
+-| shared/
+---| capitalize.ts        # Not auto-imported
+---| formatters
+-----| lower.ts           # Not auto-imported
+---| utils/
+-----| lower.ts           # Auto-imported
+-----| formatters
+-------| upper.ts         # Not auto-imported
+---| types/
+-----| bar.d.ts           # Auto-imported
+```
+
+Any other files you create in the `shared/` folder must be manually imported using the `#shared` alias (automatically configured by Nuxt):
+
+```ts
+// For files directly in the shared directory
+import capitalize from '#shared/capitalize'
+
+// For files in nested directories
+import lower from '#shared/formatters/lower'
+
+// For files nested in a folder within utils
+import upper from '#shared/utils/formatters/upper'
+```
+
+This alias ensures consistent imports across your application, regardless of the importing file's location.
+
+:read-more{to="/docs/guide/concepts/auto-imports"}