diff --git a/packages/nuxi/src/commands/dev.ts b/packages/nuxi/src/commands/dev.ts
index 139d69e629..93c3a6de93 100644
--- a/packages/nuxi/src/commands/dev.ts
+++ b/packages/nuxi/src/commands/dev.ts
@@ -46,9 +46,14 @@ export default defineNuxtCommand({
 
     const { loadNuxt, loadNuxtConfig, buildNuxt } = await loadKit(rootDir)
 
+    console.log('overrides', ...(process.env.NUXT_CONFIG_OVERRIDES ? JSON.parse(process.env.NUXT_CONFIG_OVERRIDES) : {}))
     const config = await loadNuxtConfig({
       cwd: rootDir,
-      overrides: { dev: true }
+      overrides: {
+        dev: true,
+        // used for testing
+        ...(process.env.NUXT_CONFIG_OVERRIDES ? JSON.parse(process.env.NUXT_CONFIG_OVERRIDES) : {})
+      }
     })
 
     const listener = await listen(serverHandler, {
diff --git a/packages/nuxt/test/__snapshots__/treeshake-client.test.ts.snap b/packages/nuxt/test/__snapshots__/treeshake-client.test.ts.snap
index 76ed86bfa4..8ca4bc8af7 100644
Binary files a/packages/nuxt/test/__snapshots__/treeshake-client.test.ts.snap and b/packages/nuxt/test/__snapshots__/treeshake-client.test.ts.snap differ
diff --git a/packages/test-utils/src/server.ts b/packages/test-utils/src/server.ts
index d37b4e62b1..7857553232 100644
--- a/packages/test-utils/src/server.ts
+++ b/packages/test-utils/src/server.ts
@@ -9,49 +9,64 @@ import { useTestContext } from './context'
 // @ts-ignore type cast
 const kit: typeof _kit = _kit.default || _kit
 
+export async function startDevServer () {
+  const ctx = useTestContext()
+  await stopServer()
+  const port = await getRandomPort()
+  const nuxiCLI = await kit.resolvePath('nuxi/cli')
+  ctx.serverProcess = execa(nuxiCLI, ['dev'], {
+    cwd: ctx.nuxt!.options.rootDir,
+    env: {
+      ...process.env,
+      PORT: String(port),
+      NITRO_PORT: String(port),
+      NODE_ENV: 'development',
+      NUXT_CONFIG_OVERRIDES: JSON.stringify(ctx.options.nuxtConfig)
+    }
+  })
+  // wait until the server process displays the listening path
+  ctx.url = await new Promise<string>(resolve => {
+    // @ts-expect-error untyoed
+    ctx.serverProcess.stdout?.on('data', (data: Buffer) => {
+      console.log(data.toString())
+      if (data.toString().includes('Local:')) {
+        console.log('resolving')
+        resolve(data.toString().split('Local:')[1].trim())
+      }
+    })
+  })
+  await waitForPort(port, { retries: 32 })
+  for (let i = 0; i < 50; i++) {
+    await new Promise(resolve => setTimeout(resolve, 100))
+    try {
+      const res = await $fetch(ctx.url)
+      if (!res.includes('__NUXT_LOADING__')) {
+        return
+      }
+    } catch {}
+  }
+  ctx.serverProcess.kill()
+  throw new Error('Timeout waiting for dev server!')
+}
+
+
 export async function startServer () {
   const ctx = useTestContext()
   await stopServer()
   const port = await getRandomPort()
   ctx.url = 'http://127.0.0.1:' + port
-  if (ctx.options.dev) {
-    const nuxiCLI = await kit.resolvePath('nuxi/cli')
-    ctx.serverProcess = execa(nuxiCLI, ['dev'], {
-      cwd: ctx.nuxt!.options.rootDir,
-      stdio: 'inherit',
-      env: {
-        ...process.env,
-        PORT: String(port),
-        NITRO_PORT: String(port),
-        NODE_ENV: 'development'
-      }
-    })
-    await waitForPort(port, { retries: 32 })
-    for (let i = 0; i < 50; i++) {
-      await new Promise(resolve => setTimeout(resolve, 100))
-      try {
-        const res = await $fetch(ctx.nuxt!.options.app.baseURL)
-        if (!res.includes('__NUXT_LOADING__')) {
-          return
-        }
-      } catch {}
+  ctx.serverProcess = execa('node', [
+    resolve(ctx.nuxt!.options.nitro.output!.dir!, 'server/index.mjs')
+  ], {
+    stdio: 'inherit',
+    env: {
+      ...process.env,
+      PORT: String(port),
+      NITRO_PORT: String(port),
+      NODE_ENV: 'test'
     }
-    ctx.serverProcess.kill()
-    throw new Error('Timeout waiting for dev server!')
-  } else {
-    ctx.serverProcess = execa('node', [
-      resolve(ctx.nuxt!.options.nitro.output!.dir!, 'server/index.mjs')
-    ], {
-      stdio: 'inherit',
-      env: {
-        ...process.env,
-        PORT: String(port),
-        NITRO_PORT: String(port),
-        NODE_ENV: 'test'
-      }
-    })
-    await waitForPort(port, { retries: 8 })
-  }
+  })
+  await waitForPort(port, { retries: 8 })
 }
 
 export async function stopServer () {
diff --git a/packages/test-utils/src/setup/index.ts b/packages/test-utils/src/setup/index.ts
index aa0b368cbb..8d22436a33 100644
--- a/packages/test-utils/src/setup/index.ts
+++ b/packages/test-utils/src/setup/index.ts
@@ -1,6 +1,6 @@
 import { createTestContext, setTestContext } from '../context'
 import { loadFixture, buildFixture } from '../nuxt'
-import { startServer, stopServer } from '../server'
+import {startDevServer, startServer, stopServer} from '../server'
 import { createBrowser } from '../browser'
 import type { TestHooks, TestOptions } from '../types'
 import setupJest from './jest'
@@ -41,12 +41,16 @@ export function createTest (options: Partial<TestOptions>): TestHooks {
       await loadFixture()
     }
 
-    if (ctx.options.build) {
-      await buildFixture()
-    }
+    if (ctx.options.dev) {
+      await startDevServer()
+    } else {
+      if (ctx.options.build) {
+        await buildFixture()
+      }
 
-    if (ctx.options.server) {
-      await startServer()
+      if (ctx.options.server) {
+        await startServer()
+      }
     }
 
     if (ctx.options.waitFor) {
diff --git a/test/dev.test.ts b/test/dev.test.ts
new file mode 100644
index 0000000000..804f8eba25
--- /dev/null
+++ b/test/dev.test.ts
@@ -0,0 +1,28 @@
+import { fileURLToPath } from 'node:url'
+// eslint-disable-next-line import/order
+import { setup, $fetch } from '@nuxt/test-utils'
+import { describe, it, expect } from 'vitest'
+
+await setup({
+  rootDir: fileURLToPath(new URL('./fixtures/basic', import.meta.url)),
+  dev: true,
+  nuxtConfig: {
+    app: {
+      baseURL: '/test'
+    }
+  }
+})
+describe('dev tests', () => {
+  it('should just work', async () => {
+    expect(await $fetch('/')).toMatchInlineSnapshot(`
+      "<!DOCTYPE html>
+      <html >
+      <head><meta charset=\\"utf-8\\">
+      <meta name=\\"viewport\\" content=\\"width=1024, initial-scale=1\\">
+      <title>- Fixture</title><link rel=\\"preload\\" as=\\"style\\" href=\\"/_nuxt/assets/global.css\\"><link rel=\\"preload\\" as=\\"style\\" href=\\"/_nuxt/virtual.css\\"><link rel=\\"preload\\" as=\\"style\\" href=\\"/_nuxt/assets/plugin.css\\"><link rel=\\"modulepreload\\" as=\\"script\\" crossorigin href=\\"/_nuxt/home/harlan/forks/nuxt3/packages/nuxt/src/app/entry.ts\\"><link rel=\\"stylesheet\\" href=\\"/_nuxt/assets/global.css\\"><link rel=\\"stylesheet\\" href=\\"/_nuxt/virtual.css\\"><link rel=\\"stylesheet\\" href=\\"/_nuxt/assets/plugin.css\\"></head>
+      <body ><div id=\\"__nuxt\\"><div><div>Extended layout from foo</div><div><h1>[...slug].vue</h1><div>catchall at    &gt; Network:  http:</div><div>Middleware ran: true</div></div></div></div><script>window.__NUXT__=(function(a){return {data:{hey:{foo:\\"bar\\",baz:\\"qux\\"}},state:{},_errors:{},serverRendered:true,config:{public:{ids:[1,2,3],needsFallback:a,testConfig:123},app:{baseURL:\\"\\\\u002F\\",buildAssetsDir:\\"\\\\u002F_nuxt\\\\u002F\\",cdnURL:a}},prerenderedAt:1678028804677}}(\\"\\"))</script><script type=\\"module\\" src=\\"/_nuxt/@vite/client\\" crossorigin></script><script type=\\"module\\" src=\\"/_nuxt/home/harlan/forks/nuxt3/packages/nuxt/src/app/entry.ts\\" crossorigin></script></body>
+      </html>"
+    `)
+  })
+})
+
diff --git a/test/fixtures/basic/pages/index.vue b/test/fixtures/basic/pages/index.vue
index ae4af0270c..e1ffda1d0d 100644
--- a/test/fixtures/basic/pages/index.vue
+++ b/test/fixtures/basic/pages/index.vue
@@ -5,6 +5,7 @@
     </Head>
     <h1>Hello Nuxt 3!</h1>
     <div>RuntimeConfig | testConfig: {{ config.testConfig }}</div>
+    <div>RuntimeConfig | baseURL: {{ config.baseURL }}</div>
     <div>Composable | foo: {{ foo }}</div>
     <div>Composable | bar: {{ bar }}</div>
     <div>Composable | template: {{ templateAutoImport }}</div>