diff --git a/packages/bridge/src/runtime/app.plugin.mjs b/packages/bridge/src/runtime/app.plugin.mjs
index 522b5e0d03..5d58f11b85 100644
--- a/packages/bridge/src/runtime/app.plugin.mjs
+++ b/packages/bridge/src/runtime/app.plugin.mjs
@@ -5,6 +5,7 @@ import { setNuxtAppInstance } from '#app'
 // Reshape payload to match key `useLazyAsyncData` expects
 function proxiedState (state) {
   state._asyncData = state._asyncData || {}
+  state._errors = state._errors || {}
   return new Proxy(state, {
     get (target, prop) {
       if (prop === 'data') {
@@ -39,7 +40,7 @@ export default (ctx, inject) => {
     globalName: 'nuxt',
     payload: proxiedState(process.client ? ctx.nuxtState : ctx.ssrContext.nuxt),
     _asyncDataPromises: [],
-    isHydrating: ctx.isHMR,
+    isHydrating: true,
     nuxt2Context: ctx
   }
 
@@ -51,6 +52,10 @@ export default (ctx, inject) => {
     ctx.app.created = [ctx.app.created]
   }
 
+  if (!Array.isArray(ctx.app.mounted)) {
+    ctx.app.mounted = [ctx.app.mounted]
+  }
+
   if (process.server) {
     nuxtApp.ssrContext = ctx.ssrContext
   }
@@ -59,6 +64,8 @@ export default (ctx, inject) => {
     nuxtApp.vue2App = this
   })
 
+  ctx.app.mounted.push(() => { nuxtApp.isHydrating = false })
+
   const proxiedApp = new Proxy(nuxtApp, {
     get (target, prop) {
       if (prop[0] === '$') {
diff --git a/packages/nuxt3/src/app/composables/asyncData.ts b/packages/nuxt3/src/app/composables/asyncData.ts
index a5d2c483e7..83292ac3ce 100644
--- a/packages/nuxt3/src/app/composables/asyncData.ts
+++ b/packages/nuxt3/src/app/composables/asyncData.ts
@@ -75,7 +75,7 @@ export function useAsyncData<
   const asyncData = {
     data: ref(nuxt.payload.data[key] ?? options.default()),
     pending: ref(true),
-    error: ref(null)
+    error: ref(nuxt.payload._errors[key] ?? null)
   } as AsyncData<DataT>
 
   asyncData.refresh = (force?: boolean) => {
@@ -84,7 +84,7 @@ export function useAsyncData<
       return nuxt._asyncDataPromises[key]
     }
     asyncData.pending.value = true
-    // TODO: Cancel previus promise
+    // TODO: Cancel previous promise
     // TODO: Handle immediate errors
     nuxt._asyncDataPromises[key] = Promise.resolve(handler(nuxt))
       .then((result) => {
@@ -104,13 +104,13 @@ export function useAsyncData<
       .finally(() => {
         asyncData.pending.value = false
         nuxt.payload.data[key] = asyncData.data.value
+        nuxt.payload._errors[key] = !!asyncData.error.value
         delete nuxt._asyncDataPromises[key]
       })
     return nuxt._asyncDataPromises[key]
   }
 
   const fetchOnServer = options.server !== false && nuxt.payload.serverRendered
-  const clientOnly = options.server === false || !nuxt.payload.serverRendered
 
   // Server side
   if (process.server && fetchOnServer) {
@@ -120,22 +120,16 @@ export function useAsyncData<
 
   // Client side
   if (process.client) {
-    // 1. Hydration (server: true): no fetch
-    if (nuxt.isHydrating && fetchOnServer) {
+    if (fetchOnServer && nuxt.isHydrating) {
+      // 1. Hydration (server: true): no fetch
       asyncData.pending.value = false
-    }
-    // 2. Initial load (server: false): fetch on mounted
-    if (instance && nuxt.isHydrating && clientOnly) {
-      // Fetch on mounted (initial load or lazy fetch)
+    } else if (instance && (nuxt.isHydrating || options.lazy)) {
+      // 2. Initial load (server: false): fetch on mounted
+      // 3. Navigation (lazy: true): fetch on mounted
       instance._nuxtOnBeforeMountCbs.push(asyncData.refresh)
-    } else if (!nuxt.isHydrating) { // Navigation
-      if (instance && options.lazy) {
-        // 3. Navigation (lazy: true): fetch on mounted
-        instance._nuxtOnBeforeMountCbs.push(asyncData.refresh)
-      } else {
-        // 4. Navigation (lazy: false) - or plugin usage: await fetch
-        asyncData.refresh()
-      }
+    } else {
+      // 4. Navigation (lazy: false) - or plugin usage: await fetch
+      asyncData.refresh()
     }
   }
 
diff --git a/packages/nuxt3/src/app/nuxt.ts b/packages/nuxt3/src/app/nuxt.ts
index e7899a131b..e30ea5a384 100644
--- a/packages/nuxt3/src/app/nuxt.ts
+++ b/packages/nuxt3/src/app/nuxt.ts
@@ -76,6 +76,7 @@ export function createNuxtApp (options: CreateOptions) {
     payload: reactive({
       data: {},
       state: {},
+      _errors: {},
       ...(process.client ? window.__NUXT__ : { serverRendered: true })
     }),
     isHydrating: process.client,