diff --git a/packages/nuxt/src/app/components/island-renderer.ts b/packages/nuxt/src/app/components/island-renderer.ts
index 8e77445742..6fc2fd479d 100644
--- a/packages/nuxt/src/app/components/island-renderer.ts
+++ b/packages/nuxt/src/app/components/island-renderer.ts
@@ -27,6 +27,6 @@ export default defineComponent({
       console.log(e)
     })
 
-    return () => createVNode(component || 'span', { ...props.context.props, 'nuxt-ssr-component-uid': '' })
+    return () => createVNode(component || 'span', { ...props.context.props, 'data-island-uid': '' })
   }
 })
diff --git a/packages/nuxt/src/app/components/nuxt-island.ts b/packages/nuxt/src/app/components/nuxt-island.ts
index 60e023ce68..b129f88dea 100644
--- a/packages/nuxt/src/app/components/nuxt-island.ts
+++ b/packages/nuxt/src/app/components/nuxt-island.ts
@@ -1,5 +1,5 @@
 import type { Component } from 'vue'
-import { Fragment, Teleport, computed, createStaticVNode, createVNode, defineComponent, getCurrentInstance, h, nextTick, onMounted, ref, toRaw, watch } from 'vue'
+import { Fragment, Teleport, computed, createStaticVNode, createVNode, defineComponent, getCurrentInstance, h, nextTick, onMounted, ref, toRaw, watch, withMemo } from 'vue'
 import { debounce } from 'perfect-debounce'
 import { hash } from 'ohash'
 import { appendResponseHeader } from 'h3'
@@ -13,29 +13,29 @@ import { join } from 'pathe'
 import type { NuxtIslandResponse } from '../../core/runtime/nitro/renderer'
 import { useNuxtApp, useRuntimeConfig } from '../nuxt'
 import { prerenderRoutes, useRequestEvent } from '../composables/ssr'
-import { getFragmentHTML, getSlotProps } from './utils'
+import { getFragmentHTML } from './utils'
 
 // @ts-expect-error virtual file
 import { remoteComponentIslands, selectiveClient } from '#build/nuxt.config.mjs'
 
 const pKey = '_islandPromises'
-const SSR_UID_RE = /nuxt-ssr-component-uid="([^"]*)"/
-const UID_ATTR = /nuxt-ssr-component-uid(="([^"]*)")?/
-const SLOTNAME_RE = /nuxt-ssr-slot-name="([^"]*)"/g
-const SLOT_FALLBACK_RE = /<div nuxt-slot-fallback-start="([^"]*)"[^>]*><\/div>(((?!<div nuxt-slot-fallback-end[^>]*>)[\s\S])*)<div nuxt-slot-fallback-end[^>]*><\/div>/g
+const SSR_UID_RE = /data-island-uid="([^"]*)"/
+const DATA_ISLAND_UID_RE = /data-island-uid/g
+const SLOTNAME_RE = /data-island-slot="([^"]*)"/g
+const SLOT_FALLBACK_RE = / data-island-slot="([^"]*)"[^>]*>/g
 
-let id = 0
+let id = 1
 const getId = import.meta.client ? () => (id++).toString() : randomUUID
 
 const components = import.meta.client ? new Map<string, Component>() : undefined
 
-async function loadComponents (source = '/', paths: Record<string, string>) {
+async function loadComponents (source = '/', paths: NuxtIslandResponse['components']) {
   const promises = []
 
   for (const component in paths) {
     if (!(components!.has(component))) {
       promises.push((async () => {
-        const chunkSource = join(source, paths[component])
+        const chunkSource = join(source, paths[component].chunk)
         const c = await import(/* @vite-ignore */ chunkSource).then(m => m.default || m)
         components!.set(component, c)
       })())
@@ -44,14 +44,6 @@ async function loadComponents (source = '/', paths: Record<string, string>) {
   await Promise.all(promises)
 }
 
-function emptyPayload () {
-  return {
-    chunks: {},
-    props: {},
-    teleports: {}
-  }
-}
-
 export default defineComponent({
   name: 'NuxtIsland',
   props: {
@@ -78,6 +70,8 @@ export default defineComponent({
     }
   },
   async setup (props, { slots, expose }) {
+    let canTeleport = import.meta.server
+    const teleportKey = ref(0)
     const key = ref(0)
     const canLoadClientComponent = computed(() => selectiveClient && (props.dangerouslyLoadClientComponents || !props.source))
     const error = ref<unknown>(null)
@@ -91,7 +85,7 @@ export default defineComponent({
     // TODO: remove use of `$fetch.raw` when nitro 503 issues on windows dev server are resolved
     const eventFetch = import.meta.server ? event.fetch : import.meta.dev ? $fetch.raw : globalThis.fetch
     const mounted = ref(false)
-    onMounted(() => { mounted.value = true })
+    onMounted(() => { mounted.value = true; teleportKey.value++ })
 
     function setPayload (key: string, result: NuxtIslandResponse) {
       nuxtApp.payload.data[key] = {
@@ -101,60 +95,51 @@ export default defineComponent({
             ? {}
             : { params: { ...props.context, props: props.props ? JSON.stringify(props.props) : undefined } },
           result: {
-            chunks: result.chunks,
             props: result.props,
-            teleports: result.teleports
+            slots: result.slots,
+            components: result.components
           }
         },
         ...result
       }
     }
-    // needs to be non-reactive because we don't want to trigger re-renders
-    // at hydration, we only retrieve props/chunks/teleports from payload. See the reviver at nuxt\src\app\plugins\revive-payload.client.ts
-    // If not hydrating, fetchComponent() will set it
-    const rawPayload = nuxtApp.isHydrating ? toRaw(nuxtApp.payload.data)?.[`${props.name}_${hashId.value}`] ?? emptyPayload() : emptyPayload()
 
-    const nonReactivePayload: Pick<NuxtIslandResponse, 'chunks'| 'props' | 'teleports'> = {
-      chunks: rawPayload.chunks,
-      props: rawPayload.props,
-      teleports: rawPayload.teleports
+    const payloadSlots: NonNullable<NuxtIslandResponse['slots']> = {}
+    const payloadComponents: NonNullable<NuxtIslandResponse['components']> = {}
+
+    if (nuxtApp.isHydrating) {
+      Object.assign(payloadSlots, toRaw(nuxtApp.payload.data[`${props.name}_${hashId.value}`])?.slots ?? {})
+      Object.assign(payloadComponents, toRaw(nuxtApp.payload.data[`${props.name}_${hashId.value}`])?.components ?? {})
     }
 
     const ssrHTML = ref<string>('')
 
-    if (import.meta.client) {
+    if (import.meta.client && nuxtApp.isHydrating) {
       ssrHTML.value = getFragmentHTML(instance.vnode?.el ?? null, true)?.join('') || ''
     }
 
-    const slotProps = computed(() => getSlotProps(ssrHTML.value))
     const uid = ref<string>(ssrHTML.value.match(SSR_UID_RE)?.[1] ?? getId())
     const availableSlots = computed(() => [...ssrHTML.value.matchAll(SLOTNAME_RE)].map(m => m[1]))
-
     const html = computed(() => {
       const currentSlots = Object.keys(slots)
       let html = ssrHTML.value
 
       if (import.meta.client && !canLoadClientComponent.value) {
-        for (const [key, value] of Object.entries(nonReactivePayload.teleports || {})) {
-          html = html.replace(new RegExp(`<div [^>]*nuxt-ssr-client="${key}"[^>]*>`), (full) => {
-            return full + value
+        for (const [key, value] of Object.entries(payloadComponents || {})) {
+          html = html.replace(new RegExp(` data-island-uid="${uid.value}" data-island-client="${key}"[^>]*>`), (full) => {
+            return full + value.html
           })
         }
       }
 
-      return html.replace(SLOT_FALLBACK_RE, (full, slotName, content) => {
-        // remove fallback to insert slots
-        if (currentSlots.includes(slotName)) {
-          return ''
+      return html.replaceAll(SLOT_FALLBACK_RE, (full, slotName) => {
+        if (!currentSlots.includes(slotName)) {
+          return full + payloadSlots[slotName]?.fallback ?? ''
         }
-        return content
+        return full
       })
     })
 
-    function setUid () {
-      uid.value = ssrHTML.value.match(SSR_UID_RE)?.[1] ?? getId() as string
-    }
-
     const cHead = ref<Record<'link' | 'style', Array<Record<string, string>>>>({ link: [], style: [] })
     useHead(cHead)
 
@@ -198,26 +183,25 @@ export default defineComponent({
         const res: NuxtIslandResponse = await nuxtApp[pKey][uid.value]
         cHead.value.link = res.head.link
         cHead.value.style = res.head.style
-        ssrHTML.value = res.html.replace(UID_ATTR, () => {
-          return `nuxt-ssr-component-uid="${getId()}"`
-        })
+        ssrHTML.value = res.html.replaceAll(DATA_ISLAND_UID_RE, `data-island-uid="${uid.value}"`)
         key.value++
         error.value = null
+        Object.assign(payloadSlots, res.slots || {})
+        Object.assign(payloadComponents, res.components || {})
 
         if (selectiveClient && import.meta.client) {
-          if (canLoadClientComponent.value && res.chunks) {
-            await loadComponents(props.source, res.chunks)
+          if (canLoadClientComponent.value && res.components) {
+            await loadComponents(props.source, res.components)
           }
-          nonReactivePayload.props = res.props
         }
-        nonReactivePayload.teleports = res.teleports
-        nonReactivePayload.chunks = res.chunks
 
         if (import.meta.client) {
           // must await next tick for Teleport to work correctly with static node re-rendering
-          await nextTick()
+          nextTick(() => {
+            canTeleport = true
+            teleportKey.value++
+          })
         }
-        setUid()
       } catch (e) {
         error.value = e
       }
@@ -241,46 +225,61 @@ export default defineComponent({
       fetchComponent()
     } else if (import.meta.server || !nuxtApp.isHydrating || !nuxtApp.payload.serverRendered) {
       await fetchComponent()
-    } else if (selectiveClient && canLoadClientComponent.value && nonReactivePayload.chunks) {
-      await loadComponents(props.source, nonReactivePayload.chunks)
+    } else if (selectiveClient && canLoadClientComponent.value) {
+      await loadComponents(props.source, payloadComponents)
     }
 
-    return () => {
+    return (_ctx: any, _cache: any) => {
       if (!html.value || error.value) {
         return [slots.fallback?.({ error: error.value }) ?? createVNode('div')]
       }
-      const nodes = [createVNode(Fragment, {
-        key: key.value
-      }, [h(createStaticVNode(html.value || '<div></div>', 1))])]
+      return [
+        withMemo([key.value], () => {
+          return createVNode(Fragment, { key: key.value }, [h(createStaticVNode(html.value || '<div></div>', 1))])
+        }, _cache, 0),
 
-      if (uid.value && (mounted.value || nuxtApp.isHydrating || import.meta.server) && html.value) {
-        for (const slot in slots) {
-          if (availableSlots.value.includes(slot)) {
-            nodes.push(createVNode(Teleport, { to: import.meta.client ? `[nuxt-ssr-component-uid='${uid.value}'] [nuxt-ssr-slot-name='${slot}']` : `uid=${uid.value};slot=${slot}` }, {
-              default: () => (slotProps.value[slot] ?? [undefined]).map((data: any) => slots[slot]?.(data))
-            }))
-          }
-        }
-        if (import.meta.server) {
-          for (const [id, html] of Object.entries(nonReactivePayload.teleports ?? {})) {
-            nodes.push(createVNode(Teleport, { to: `uid=${uid.value};client=${id}` }, {
-              default: () => [createStaticVNode(html, 1)]
-            }))
-          }
-        }
-        if (selectiveClient && import.meta.client && canLoadClientComponent.value) {
-          for (const [id, props] of Object.entries(nonReactivePayload.props ?? {})) {
-            const component = components!.get(id.split('-')[0])!
-            const vnode = createVNode(Teleport, { to: `[nuxt-ssr-component-uid='${uid.value}'] [nuxt-ssr-client="${id}"]` }, {
-              default: () => {
-                return [h(component, props)]
+        // should away be triggered ONE tick after re-rendering the static node
+        withMemo([teleportKey.value], () => {
+          const teleports = []
+          // this is used to force trigger Teleport when vue makes the diff between old and new node
+          const isKeyOdd = teleportKey.value === 0 || !!(teleportKey.value && !(teleportKey.value % 2))
+
+          if (uid.value && html.value && (import.meta.server || props.lazy ? canTeleport : mounted.value || nuxtApp.isHydrating)) {
+            for (const slot in slots) {
+              if (availableSlots.value.includes(slot)) {
+                teleports.push(createVNode(Teleport,
+                  // use different selectors for even and odd teleportKey to force trigger the teleport
+                  { to: import.meta.client ? `${isKeyOdd ? 'div' : ''}[data-island-uid="${uid.value}"][data-island-slot="${slot}"]` : `uid=${uid.value};slot=${slot}` },
+                  { default: () => (payloadSlots[slot].props?.length ? payloadSlots[slot].props : [{}]).map((data: any) => slots[slot]?.(data)) })
+                )
               }
-            })
-            nodes.push(vnode)
+            }
+            if (import.meta.server) {
+              for (const [id, info] of Object.entries(payloadComponents ?? {})) {
+                const { html } = info
+                teleports.push(createVNode(Teleport, { to: `uid=${uid.value};client=${id}` }, {
+                  default: () => [createStaticVNode(html, 1)]
+                }))
+              }
+            }
+            if (selectiveClient && import.meta.client && canLoadClientComponent.value) {
+              for (const [id, info] of Object.entries(payloadComponents ?? {})) {
+                const { props } = info
+                const component = components!.get(id)!
+                // use different selectors for even and odd teleportKey to force trigger the teleport
+                const vnode = createVNode(Teleport, { to: `${isKeyOdd ? 'div' : ''}[data-island-uid='${uid.value}'][data-island-client="${id}"]` }, {
+                  default: () => {
+                    return [h(component, props)]
+                  }
+                })
+                teleports.push(vnode)
+              }
+            }
           }
-        }
-      }
-      return nodes
+
+          return h(Fragment, teleports)
+        }, _cache, 1)
+      ]
     }
   }
 })
diff --git a/packages/nuxt/src/app/components/nuxt-teleport-ssr-client.ts b/packages/nuxt/src/app/components/nuxt-teleport-island-client.ts
similarity index 68%
rename from packages/nuxt/src/app/components/nuxt-teleport-ssr-client.ts
rename to packages/nuxt/src/app/components/nuxt-teleport-island-client.ts
index cbcba69f59..aca5f791ed 100644
--- a/packages/nuxt/src/app/components/nuxt-teleport-ssr-client.ts
+++ b/packages/nuxt/src/app/components/nuxt-teleport-island-client.ts
@@ -1,4 +1,4 @@
-import type { Component,   } from 'vue'
+import type { Component } from 'vue'
 import { Teleport, defineComponent, h } from 'vue'
 import { useNuxtApp } from '../nuxt'
 // @ts-expect-error virtual file
@@ -14,7 +14,7 @@ type ExtendedComponent = Component & {
  * this teleport the component in SSR only if it needs to be hydrated on client
  */
 export default defineComponent({
-  name: 'NuxtTeleportSsrClient',
+  name: 'NuxtTeleportIslandClient',
   props: {
     to: {
       type: String,
@@ -34,28 +34,26 @@ export default defineComponent({
     }
   },
   setup (props, { slots }) {
-    if (!props.nuxtClient) { return () => slots.default!() }
+    const nuxtApp = useNuxtApp()
 
-    const app = useNuxtApp()
-    const islandContext = app.ssrContext!.islandContext!
+    if (!nuxtApp.ssrContext?.islandContext || !props.nuxtClient) { return () => slots.default!() }
+
+    const islandContext = nuxtApp.ssrContext!.islandContext!
 
     return () => {
       const slot = slots.default!()[0]
       const slotType = (slot.type as ExtendedComponent)
       const name = (slotType.__name || slotType.name) as string
-     
-      if (import.meta.dev) {
-        const path = '_nuxt/' +  paths[name]
-        islandContext.chunks[name] = path
-      } else {
-        islandContext.chunks[name] = paths[name]
-      }
 
-      islandContext.propsData[props.to] = slot.props || {}
+      islandContext.components[props.to] = {
+        chunk: import.meta.dev ? '_nuxt/' + paths[name] : paths[name],
+        props: slot.props || {}
+      }
 
       return [h('div', {
         style: 'display: contents;',
-        'nuxt-ssr-client': props.to
+        'data-island-uid': '',
+        'data-island-client': props.to
       }, []), h(Teleport, { to: props.to }, slot)]
     }
   }
diff --git a/packages/nuxt/src/app/components/nuxt-teleport-island-slot.ts b/packages/nuxt/src/app/components/nuxt-teleport-island-slot.ts
new file mode 100644
index 0000000000..eb1713280e
--- /dev/null
+++ b/packages/nuxt/src/app/components/nuxt-teleport-island-slot.ts
@@ -0,0 +1,47 @@
+import { Teleport, defineComponent, h } from 'vue'
+import { useNuxtApp } from '../nuxt'
+ 
+/**
+ * component only used within islands for slot teleport
+ */
+export default defineComponent({
+  name: 'NuxtTeleportIslandSlot',
+  props: {
+    name: {
+        type: String,
+        required: true
+    },
+    /**
+     * must be an array to handle v-for
+     */
+    props: {
+        type: Object as () => Array<any>
+    }
+  },
+  setup (props, { slots }) {
+    const nuxtApp = useNuxtApp()
+    const islandContext = nuxtApp.ssrContext?.islandContext
+
+    if(!islandContext) {
+      return () => slots.default?.()
+    }
+
+    islandContext.slots[props.name] = {
+      props: (props.props ||  []) as unknown[]
+    }
+
+    return () => {
+      const vnodes = [h('div', {
+        style: 'display: contents;',
+        'data-island-uid': '',
+        'data-island-slot': props.name,
+      })]
+
+      if (slots.fallback) {
+        vnodes.push(h(Teleport, { to: `island-fallback=${props.name}`}, slots.fallback()))
+      }
+
+      return vnodes
+    }
+  }
+})
diff --git a/packages/nuxt/src/app/components/utils.ts b/packages/nuxt/src/app/components/utils.ts
index 5995e333a8..11108cb583 100644
--- a/packages/nuxt/src/app/components/utils.ts
+++ b/packages/nuxt/src/app/components/utils.ts
@@ -2,7 +2,6 @@ import { h } from 'vue'
 import type { Component, RendererNode } from 'vue'
 // eslint-disable-next-line
 import { isString, isPromise, isArray, isObject } from '@vue/shared'
-import destr from 'destr'
 import type { RouteLocationNormalized } from '#vue-router'
 // @ts-expect-error virtual file
 import { START_LOCATION } from '#build/pages'
@@ -143,7 +142,7 @@ export function getFragmentHTML (element: RendererNode | null, withoutSlots = fa
     }
     if (withoutSlots) {
       const clone = element.cloneNode(true)
-      clone.querySelectorAll('[nuxt-ssr-slot-name]').forEach((n: Element) => { n.innerHTML = '' })
+      clone.querySelectorAll('[data-island-slot]').forEach((n: Element) => { n.innerHTML = '' })
       return [clone.outerHTML]
     }
     return [element.outerHTML]
@@ -158,7 +157,7 @@ function getFragmentChildren (element: RendererNode | null, blocks: string[] = [
     } else if (!isStartFragment(element)) {
       const clone = element.cloneNode(true) as Element
       if (withoutSlots) {
-        clone.querySelectorAll('[nuxt-ssr-slot-name]').forEach((n) => { n.innerHTML = '' })
+        clone.querySelectorAll('[data-island-slot]').forEach((n) => { n.innerHTML = '' })
       }
       blocks.push(clone.outerHTML)
     }
@@ -175,15 +174,3 @@ function isStartFragment (element: RendererNode) {
 function isEndFragment (element: RendererNode) {
   return element.nodeName === '#comment' && element.nodeValue === ']'
 }
-const SLOT_PROPS_RE = /<div[^>]*nuxt-ssr-slot-name="([^"]*)" nuxt-ssr-slot-data="([^"]*)"[^/|>]*>/g
-
-export function getSlotProps (html: string) {
-  const slotsDivs = html.matchAll(SLOT_PROPS_RE)
-  const data: Record<string, any> = {}
-  for (const slot of slotsDivs) {
-    const [_, slotName, json] = slot
-    const slotData = destr(decodeHtmlEntities(json))
-    data[slotName] = slotData
-  }
-  return data
-}
diff --git a/packages/nuxt/src/components/islandsTransform.ts b/packages/nuxt/src/components/islandsTransform.ts
index 84b8c71718..a3b6875b8f 100644
--- a/packages/nuxt/src/components/islandsTransform.ts
+++ b/packages/nuxt/src/components/islandsTransform.ts
@@ -11,17 +11,17 @@ import { resolvePath } from '@nuxt/kit'
 import { isVue } from '../core/utils'
 
 interface ServerOnlyComponentTransformPluginOptions {
-    getComponents: () => Component[]
-    /**
-     * passed down to `NuxtTeleportSsrClient`
-     * should be done only in dev mode as we use build:manifest result in production
-     */
-    rootDir?: string
-    isDev?: boolean
-    /**
-     * allow using `nuxt-client` attribute on components
-     */
-    selectiveClient?: boolean
+  getComponents: () => Component[]
+  /**
+   * passed down to `NuxtTeleportIslandClient`
+   * should be done only in dev mode as we use build:manifest result in production
+   */
+  rootDir?: string
+  isDev?: boolean
+  /**
+   * allow using `nuxt-client` attribute on components
+   */
+  selectiveClient?: boolean
 }
 
 interface ComponentChunkOptions {
@@ -33,7 +33,11 @@ const SCRIPT_RE = /<script[^>]*>/g
 const HAS_SLOT_OR_CLIENT_RE = /(<slot[^>]*>)|(nuxt-client)/
 const TEMPLATE_RE = /<template>([\s\S]*)<\/template>/
 const NUXTCLIENT_ATTR_RE = /\snuxt-client(="[^"]*")?/g
-const IMPORT_CODE = '\nimport { vforToArray as __vforToArray } from \'#app/components/utils\'' + '\nimport NuxtTeleportSsrClient from \'#app/components/nuxt-teleport-ssr-client\''
+const IMPORT_CODE = '\nimport { vforToArray as __vforToArray } from \'#app/components/utils\'' + '\nimport NuxtTeleportIslandClient from \'#app/components/nuxt-teleport-island-client\'' + '\nimport NuxtTeleportSsrSlot from \'#app/components/nuxt-teleport-island-slot\''
+
+function wrapWithVForDiv (code: string, vfor: string): string {
+  return `<div v-for="${vfor}" style="display: contents;">${code}</div>`
+}
 
 export const islandsTransform = createUnplugin((options: ServerOnlyComponentTransformPluginOptions, meta) => {
   const isVite = meta.framework === 'vite'
@@ -62,53 +66,42 @@ export const islandsTransform = createUnplugin((options: ServerOnlyComponentTran
         s.prepend('<script setup>' + IMPORT_CODE + '</script>')
       } else {
         s.replace(SCRIPT_RE, (full) => {
-          return full + IMPORT_CODE 
+          return full + IMPORT_CODE
         })
       }
 
-
       let hasNuxtClient = false
 
       const ast = parse(template[0])
       await walk(ast, (node) => {
         if (node.type === ELEMENT_NODE) {
           if (node.name === 'slot') {
-            const { attributes, children, loc, isSelfClosingTag } = node
+            const { attributes, children, loc } = node
+
+            // pass slot fallback to NuxtTeleportSsrSlot fallback
+            if (children.length) {
+              const attrString = Object.entries(attributes).map(([name, value]) => name ? `${name}="${value}" ` : value).join(' ')
+              const slice = code.slice(startingIndex + loc[0].end, startingIndex + loc[1].start).replaceAll(/:?key="[^"]"/g, '')
+              s.overwrite(startingIndex + loc[0].start, startingIndex + loc[1].end, `<slot ${attrString} /><template #fallback>${attributes["v-for"] ? wrapWithVForDiv(slice, attributes['v-for']) : slice}</template>`)
+            }
+
             const slotName = attributes.name ?? 'default'
             let vfor: [string, string] | undefined
             if (attributes['v-for']) {
               vfor = attributes['v-for'].split(' in ').map((v: string) => v.trim()) as [string, string]
-              delete attributes['v-for']
             }
+            delete attributes['v-for']
+
             if (attributes.name) { delete attributes.name }
             if (attributes['v-bind']) {
               attributes._bind = attributes['v-bind']
               delete attributes['v-bind']
             }
-            const bindings = getBindings(attributes, vfor)
+            const bindings = getPropsToString(attributes, vfor)
 
-            if (isSelfClosingTag) {
-              s.overwrite(startingIndex + loc[0].start, startingIndex + loc[0].end, `<div style="display: contents;" nuxt-ssr-slot-name="${slotName}" ${bindings}/>`)
-            } else {
-              s.overwrite(startingIndex + loc[0].start, startingIndex + loc[0].end, `<div style="display: contents;" nuxt-ssr-slot-name="${slotName}" ${bindings}>`)
-              s.overwrite(startingIndex + loc[1].start, startingIndex + loc[1].end, '</div>')
-
-              if (children.length > 1) {
-                // need to wrap instead of applying v-for on each child
-                const wrapperTag = `<div ${vfor ? `v-for="${vfor[0]} in ${vfor[1]}"` : ''} style="display: contents;">`
-                s.appendRight(startingIndex + loc[0].end, `<div nuxt-slot-fallback-start="${slotName}"/>${wrapperTag}`)
-                s.appendLeft(startingIndex + loc[1].start, '</div><div nuxt-slot-fallback-end/>')
-              } else if (children.length === 1) {
-                if (vfor && children[0].type === ELEMENT_NODE) {
-                  const { loc, name, attributes, isSelfClosingTag } = children[0]
-                  const attrs = Object.entries(attributes).map(([attr, val]) => `${attr}="${val}"`).join(' ')
-                  s.overwrite(startingIndex + loc[0].start, startingIndex + loc[0].end, `<${name} v-for="${vfor[0]} in ${vfor[1]}" ${attrs} ${isSelfClosingTag ? '/' : ''}>`)
-                }
-
-                s.appendRight(startingIndex + loc[0].end, `<div nuxt-slot-fallback-start="${slotName}"/>`)
-                s.appendLeft(startingIndex + loc[1].start, '<div nuxt-slot-fallback-end/>')
-              }
-            }
+            // add the wrapper
+            s.appendLeft(startingIndex + loc[0].start, `<NuxtTeleportSsrSlot name="${slotName}" :props="${bindings}">`)
+            s.appendRight(startingIndex + loc[1].end, '</NuxtTeleportSsrSlot>')
           } else if (options.selectiveClient && ('nuxt-client' in node.attributes || ':nuxt-client' in node.attributes)) {
             hasNuxtClient = true
             const attributeValue = node.attributes[':nuxt-client'] || node.attributes['nuxt-client'] || 'true'
@@ -117,7 +110,7 @@ export const islandsTransform = createUnplugin((options: ServerOnlyComponentTran
               const htmlCode = code.slice(startingIndex + node.loc[0].start, startingIndex + node.loc[1].end)
               const uid = hash(id + node.loc[0].start + node.loc[0].end)
 
-              s.overwrite(startingIndex + node.loc[0].start, startingIndex + node.loc[1].end, `<NuxtTeleportSsrClient to="${node.name}-${uid}" ${rootDir && isDev ? `root-dir="${rootDir}"` : ''} :nuxt-client="${attributeValue}">${htmlCode.replaceAll(NUXTCLIENT_ATTR_RE, '')}</NuxtTeleportSsrClient>`)
+              s.overwrite(startingIndex + node.loc[0].start, startingIndex + node.loc[1].end, `<NuxtTeleportIslandClient to="${node.name}-${uid}" ${rootDir && isDev ? `root-dir="${rootDir}"` : ''} :nuxt-client="${attributeValue}">${htmlCode.replaceAll(NUXTCLIENT_ATTR_RE, '')}</NuxtTeleportIslandClient>`)
             }
           }
         }
@@ -142,14 +135,14 @@ function isBinding (attr: string): boolean {
   return attr.startsWith(':')
 }
 
-function getBindings (bindings: Record<string, string>, vfor?: [string, string]): string {
-  if (Object.keys(bindings).length === 0) { return '' }
+function getPropsToString (bindings: Record<string, string>, vfor?: [string, string]): string {
+  if (Object.keys(bindings).length === 0) { return 'undefined' }
   const content = Object.entries(bindings).filter(b => b[0] && b[0] !== '_bind').map(([name, value]) => isBinding(name) ? `${name.slice(1)}: ${value}` : `${name}: \`${value}\``).join(',')
   const data = bindings._bind ? `mergeProps(${bindings._bind}, { ${content} })` : `{ ${content} }`
   if (!vfor) {
-    return `:nuxt-ssr-slot-data="JSON.stringify([${data}])"`
+    return `[${data}]`
   } else {
-    return `:nuxt-ssr-slot-data="JSON.stringify(__vforToArray(${vfor[1]}).map(${vfor[0]} => (${data})))"`
+    return `__vforToArray(${vfor[1]}).map(${vfor[0]} => (${data}))`
   }
 }
 
@@ -158,7 +151,7 @@ export const componentsChunkPlugin = createUnplugin((options: ComponentChunkOpti
   return {
     name: 'componentsChunkPlugin',
     vite: {
-      async  config (config) {
+      async config (config) {
         const components = options.getComponents()
         config.build = config.build || {}
         config.build.rollupOptions = config.build.rollupOptions || {}
diff --git a/packages/nuxt/src/core/runtime/nitro/renderer.ts b/packages/nuxt/src/core/runtime/nitro/renderer.ts
index 3f412545cf..c6c239ec10 100644
--- a/packages/nuxt/src/core/runtime/nitro/renderer.ts
+++ b/packages/nuxt/src/core/runtime/nitro/renderer.ts
@@ -58,10 +58,18 @@ export interface NuxtIslandContext {
   name: string
   props?: Record<string, any>
   url?: string
-  // chunks to load components
-  chunks: Record<string, string>
-  // props to be sent back
-  propsData: Record<string, any>
+  slots: Record<string, Omit<NuxtIslandSlotResponse, 'html' | 'fallback'>>
+  components: Record<string, Omit<NuxtIslandClientResponse, 'html'>>
+}
+
+export interface NuxtIslandSlotResponse {
+  props: Array<unknown>
+  fallback: string
+}
+export interface NuxtIslandClientResponse {
+  html: string
+  props: unknown
+  chunk: string
 }
 
 export interface NuxtIslandResponse {
@@ -72,9 +80,9 @@ export interface NuxtIslandResponse {
     link: (Record<string, string>)[]
     style: ({ innerHTML: string, key: string })[]
   }
-  chunks?: Record<string, string>
   props?: Record<string, Record<string, any>>
-  teleports?: Record<string, string>
+  components?: Record<string, NuxtIslandClientResponse>
+  slots?: Record<string, NuxtIslandSlotResponse>
 }
 
 export interface NuxtRenderResponse {
@@ -195,10 +203,8 @@ async function getIslandContext (event: H3Event): Promise<NuxtIslandContext> {
     id: hashId,
     name: componentName,
     props: destr(context.props) || {},
-    uid: destr(context.uid) || undefined,
-    chunks: {},
-    propsData: {},
-    teleports: {}
+    slots: {},
+    components: {},
   }
 
   return ctx
@@ -421,7 +427,7 @@ export default defineRenderHandler(async (event): Promise<Partial<RenderResponse
     head: normalizeChunks([headTags, ssrContext.styles]),
     bodyAttrs: bodyAttrs ? [bodyAttrs] : [],
     bodyPrepend: normalizeChunks([bodyTagsOpen, ssrContext.teleports?.body]),
-    body: [process.env.NUXT_COMPONENT_ISLANDS ? replaceClientTeleport(ssrContext, replaceServerOnlyComponentsSlots(ssrContext, _rendered.html)) : _rendered.html],
+    body: [process.env.NUXT_COMPONENT_ISLANDS ? replaceIslandTeleports(ssrContext, _rendered.html) : _rendered.html],
     bodyAppend: [bodyTags]
   }
 
@@ -446,9 +452,8 @@ export default defineRenderHandler(async (event): Promise<Partial<RenderResponse
       head: islandHead,
       html: getServerComponentHTML(htmlContext.body),
       state: ssrContext.payload.state,
-      chunks: islandContext.chunks,
-      props: islandContext.propsData,
-      teleports: ssrContext.teleports || {}
+      components: getClientIslandResponse(ssrContext),
+      slots: getSlotIslandResponse(ssrContext)
     }
 
     await nitroApp.hooks.callHook('render:island', islandResponse, { event, islandContext })
@@ -593,37 +598,56 @@ function getServerComponentHTML (body: string[]): string {
   return match ? match[1] : body[0]
 }
 
-const SSR_TELEPORT_MARKER = /^uid=([^;]*);slot=(.*)$/
+const SSR_SLOT_TELEPORT_MARKER = /^uid=([^;]*);slot=(.*)$/
 const SSR_CLIENT_TELEPORT_MARKER = /^uid=([^;]*);client=(.*)$/
-function replaceServerOnlyComponentsSlots (ssrContext: NuxtSSRContext, html: string): string {
-  const { teleports, islandContext } = ssrContext
-  if (islandContext || !teleports) { return html }
-  for (const key in teleports) {
-    const match = key.match(SSR_TELEPORT_MARKER)
-    if (!match) { continue }
-    const [, uid, slot] = match
-    if (!uid || !slot) { continue }
-    html = html.replace(new RegExp(`<div [^>]*nuxt-ssr-component-uid="${uid}"[^>]*>((?!nuxt-ssr-slot-name="${slot}"|nuxt-ssr-component-uid)[\\s\\S])*<div [^>]*nuxt-ssr-slot-name="${slot}"[^>]*>`), (full) => {
-      return full + teleports[key]
-    })
+
+function getSlotIslandResponse (ssrContext: NuxtSSRContext): NuxtIslandResponse['slots'] {
+  if (!ssrContext.islandContext) { return {} }
+  const response: NuxtIslandResponse['slots'] = {}
+  for (const slot in ssrContext.islandContext.slots) {
+    response[slot] = {
+      ...ssrContext.islandContext.slots[slot],
+      fallback: ssrContext.teleports?.[`island-fallback=${slot}`] || ''
+    }
   }
-  return html
+  return response
 }
 
-// TODO merge with replaceServerOnlyComponentsSlots once slots are refactored
-function replaceClientTeleport (ssrContext: NuxtSSRContext, html: string) {
+function getClientIslandResponse (ssrContext: NuxtSSRContext): NuxtIslandResponse['components'] {
+  if (!ssrContext.islandContext) { return {} }
+  const response: NuxtIslandResponse['components'] = {}
+  for (const clientUid in ssrContext.islandContext.components) {
+    const html = ssrContext.teleports?.[clientUid] || ''
+    response[clientUid] = {
+      ...ssrContext.islandContext.components[clientUid],
+      html,
+    }
+  }
+  return response
+}
+
+function replaceIslandTeleports (ssrContext: NuxtSSRContext, html: string) {
   const { teleports, islandContext } = ssrContext
 
   if (islandContext || !teleports) { return html }
   for (const key in teleports) {
-    const match = key.match(SSR_CLIENT_TELEPORT_MARKER)
-    if (!match) { continue }
-    const [, uid, clientId] = match
-    if (!uid || !clientId) { continue }
-    html = html.replace(new RegExp(`<div [^>]*nuxt-ssr-component-uid="${uid}"[^>]*>((?!nuxt-ssr-client="${clientId}"|nuxt-ssr-component-uid)[\\s\\S])*<div [^>]*nuxt-ssr-client="${clientId}"[^>]*>`), (full) => {
-
-      return full + teleports[key]
-    })
+    const matchClientComp = key.match(SSR_CLIENT_TELEPORT_MARKER)
+    if (matchClientComp) {
+      const [, uid, clientId] = matchClientComp
+      if (!uid || !clientId) { continue }
+      html = html.replace(new RegExp(` data-island-client="${clientId}"[^>]*>`), (full) => {
+        return full + teleports[key]
+      })
+      continue
+    }
+    const matchSlot = key.match(SSR_SLOT_TELEPORT_MARKER)
+    if (matchSlot) {
+      const [, uid, slot] = matchSlot
+      if (!uid || !slot) { continue }
+      html = html.replace(new RegExp(` data-island-uid="${uid}" data-island-slot="${slot}"[^>]*>`), (full) => {
+        return full + teleports[key]
+      })
+    }
   }
   return html
 }
diff --git a/packages/nuxt/test/islandTransform.test.ts b/packages/nuxt/test/islandTransform.test.ts
index 843319ca75..43b5a4ae26 100644
--- a/packages/nuxt/test/islandTransform.test.ts
+++ b/packages/nuxt/test/islandTransform.test.ts
@@ -63,15 +63,19 @@ describe('islandTransform - server and island components', () => {
       expect(normalizeLineEndings(result)).toMatchInlineSnapshot(`
         "<template>
               <div>
-                <div style="display: contents;" nuxt-ssr-slot-name="default" />
+                <NuxtTeleportSsrSlot name="default" :props="undefined"><slot /></NuxtTeleportSsrSlot>
 
-                <div style="display: contents;" nuxt-ssr-slot-name="named" :nuxt-ssr-slot-data="JSON.stringify([{ some-data: someData }])"/>
-                <div style="display: contents;" nuxt-ssr-slot-name="other" :nuxt-ssr-slot-data="JSON.stringify([{ some-data: someData }])"/>
+                <NuxtTeleportSsrSlot name="named" :props="[{ some-data: someData }]"><slot name="named" :some-data="someData" /></NuxtTeleportSsrSlot>
+                <NuxtTeleportSsrSlot name="other" :props="[{ some-data: someData }]"><slot
+                  name="other"
+                  :some-data="someData"
+                /></NuxtTeleportSsrSlot>
               </div>
               </template>
               <script setup lang="ts">
         import { vforToArray as __vforToArray } from '#app/components/utils'
-        import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+        import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+        import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
               const someData = 'some data'
 
               </script>"
@@ -95,14 +99,15 @@ describe('islandTransform - server and island components', () => {
       expect(normalizeLineEndings(result)).toMatchInlineSnapshot(`
         "<template>
               <div>
-                <div style="display: contents;" nuxt-ssr-slot-name="default" :nuxt-ssr-slot-data="JSON.stringify([{ some-data: someData }])"><div nuxt-slot-fallback-start="default"/><div  style="display: contents;">
+                <NuxtTeleportSsrSlot name="default" :props="[{ some-data: someData }]"><slot :some-data="someData"  /><template #fallback>
                   <div>fallback</div>
-                </div><div nuxt-slot-fallback-end/></div>
+                </template></NuxtTeleportSsrSlot>
               </div>
               </template>
               <script setup lang="ts">
         import { vforToArray as __vforToArray } from '#app/components/utils'
-        import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+        import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+        import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
               const someData = 'some data'
 
               </script>"
@@ -153,10 +158,10 @@ describe('islandTransform - server and island components', () => {
                     <p>message: {{ message }}</p>
                     <p>Below is the slot I want to be hydrated on the client</p>
                     <div>
-                      <div style="display: contents;" nuxt-ssr-slot-name="default" ><div nuxt-slot-fallback-start="default"/>
+                      <NuxtTeleportSsrSlot name="default" :props="undefined"><slot  /><template #fallback>
                         This is the default content of the slot, I should not see this after
                         the client loading has completed.
-                      <div nuxt-slot-fallback-end/></div>
+                      </template></NuxtTeleportSsrSlot>
                     </div>
                     <p>Above is the slot I want to be hydrated on the client</p>
                   </template>
@@ -166,7 +171,8 @@ describe('islandTransform - server and island components', () => {
 
             <script setup lang="ts">
         import { vforToArray as __vforToArray } from '#app/components/utils'
-        import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+        import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+        import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
             export interface Props {
               count?: number;
             }
@@ -184,9 +190,9 @@ describe('islandTransform - server and island components', () => {
       it('test transform with vite in dev', async () => {
         const result = await viteTransform(`<template>
         <div>
-          <!-- should not be wrapped by NuxtTeleportSsrClient -->
+          <!-- should not be wrapped by NuxtTeleportIslandClient -->
           <HelloWorld />
-          <!-- should be wrapped by NuxtTeleportSsrClient with a rootDir attr -->
+          <!-- should be wrapped by NuxtTeleportIslandClient with a rootDir attr -->
           <HelloWorld nuxt-client />
         </div>
       </template>
@@ -199,16 +205,17 @@ describe('islandTransform - server and island components', () => {
         expect(normalizeLineEndings(result)).toMatchInlineSnapshot(`
           "<template>
                   <div>
-                    <!-- should not be wrapped by NuxtTeleportSsrClient -->
+                    <!-- should not be wrapped by NuxtTeleportIslandClient -->
                     <HelloWorld />
-                    <!-- should be wrapped by NuxtTeleportSsrClient with a rootDir attr -->
-                    <NuxtTeleportSsrClient to="HelloWorld-PIVollAJCe" root-dir="/root" :nuxt-client="true"><HelloWorld /></NuxtTeleportSsrClient>
+                    <!-- should be wrapped by NuxtTeleportIslandClient with a rootDir attr -->
+                    <NuxtTeleportIslandClient to="HelloWorld-u9V1gHwUZN" root-dir="/root" :nuxt-client="true"><HelloWorld /></NuxtTeleportIslandClient>
                   </div>
                 </template>
                 
                 <script setup lang="ts">
           import { vforToArray as __vforToArray } from '#app/components/utils'
-          import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+          import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+          import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
                 import HelloWorld from './HelloWorld.vue'
                 </script>
                 "
@@ -234,13 +241,14 @@ describe('islandTransform - server and island components', () => {
           "<template>
                   <div>
                     <HelloWorld />
-                    <NuxtTeleportSsrClient to="HelloWorld-CyH3UXLuYA"  :nuxt-client="true"><HelloWorld /></NuxtTeleportSsrClient>
+                    <NuxtTeleportIslandClient to="HelloWorld-CyH3UXLuYA"  :nuxt-client="true"><HelloWorld /></NuxtTeleportIslandClient>
                   </div>
                 </template>
                 
                 <script setup lang="ts">
           import { vforToArray as __vforToArray } from '#app/components/utils'
-          import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+          import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+          import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
                 import HelloWorld from './HelloWorld.vue'
                 </script>
                 "
@@ -269,13 +277,14 @@ describe('islandTransform - server and island components', () => {
           "<template>
                   <div>
                     <HelloWorld />
-                    <NuxtTeleportSsrClient to="HelloWorld-eo0XycWCUV"  :nuxt-client="nuxtClient"><HelloWorld :nuxt-client="nuxtClient" /></NuxtTeleportSsrClient>
+                    <NuxtTeleportIslandClient to="HelloWorld-eo0XycWCUV"  :nuxt-client="nuxtClient"><HelloWorld :nuxt-client="nuxtClient" /></NuxtTeleportIslandClient>
                   </div>
                 </template>
                 
                 <script setup lang="ts">
           import { vforToArray as __vforToArray } from '#app/components/utils'
-          import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+          import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+          import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
                 import HelloWorld from './HelloWorld.vue'
 
                 const nuxtClient = false
@@ -309,7 +318,8 @@ describe('islandTransform - server and island components', () => {
                 
                 <script setup lang="ts">
           import { vforToArray as __vforToArray } from '#app/components/utils'
-          import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+          import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+          import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
                 import HelloWorld from './HelloWorld.vue'
 
                 const nuxtClient = false
@@ -331,16 +341,17 @@ describe('islandTransform - server and island components', () => {
       expect(result).toMatchInlineSnapshot(`
         "<script setup>
         import { vforToArray as __vforToArray } from '#app/components/utils'
-        import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'</script><template>
+        import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+        import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'</script><template>
                 <div>
                   <HelloWorld />
-                  <NuxtTeleportSsrClient to="HelloWorld-CyH3UXLuYA"  :nuxt-client="true"><HelloWorld /></NuxtTeleportSsrClient>
+                  <NuxtTeleportIslandClient to="HelloWorld-CyH3UXLuYA"  :nuxt-client="true"><HelloWorld /></NuxtTeleportIslandClient>
                 </div>
               </template>
               
               "
       `)
-      expect(result).toContain(`import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'`)
+      expect(result).toContain(`import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'`)
       })
     })
 
@@ -349,10 +360,10 @@ describe('islandTransform - server and island components', () => {
         const spyOnWarn = vi.spyOn(console, 'warn')
         const result = await webpackTransform(`<template>
         <div>
-          <!-- should not be wrapped by NuxtTeleportSsrClient -->
+          <!-- should not be wrapped by NuxtTeleportIslandClient -->
           <HelloWorld />
       
-          <!-- should be not wrapped by NuxtTeleportSsrClient for now -->
+          <!-- should be not wrapped by NuxtTeleportIslandClient for now -->
           <HelloWorld nuxt-client />
         </div>
       </template>
@@ -366,17 +377,18 @@ describe('islandTransform - server and island components', () => {
         expect(normalizeLineEndings(result)).toMatchInlineSnapshot(`
           "<template>
                   <div>
-                    <!-- should not be wrapped by NuxtTeleportSsrClient -->
+                    <!-- should not be wrapped by NuxtTeleportIslandClient -->
                     <HelloWorld />
                 
-                    <!-- should be not wrapped by NuxtTeleportSsrClient for now -->
+                    <!-- should be not wrapped by NuxtTeleportIslandClient for now -->
                     <HelloWorld nuxt-client />
                   </div>
                 </template>
                 
                 <script setup lang="ts">
           import { vforToArray as __vforToArray } from '#app/components/utils'
-          import NuxtTeleportSsrClient from '#app/components/nuxt-teleport-ssr-client'
+          import NuxtTeleportIslandClient from '#app/components/nuxt-teleport-island-client'
+          import NuxtTeleportSsrSlot from '#app/components/nuxt-teleport-island-slot'
                 import HelloWorld from './HelloWorld.vue'
                 
                 const someData = 'some data'
diff --git a/test/basic.test.ts b/test/basic.test.ts
index d0d1d88645..48128f50b8 100644
--- a/test/basic.test.ts
+++ b/test/basic.test.ts
@@ -113,7 +113,7 @@ describe('pages', () => {
     // should apply attributes to client-only components
     expect(html).toContain('<div style="color:red;" class="client-only"></div>')
     // should render server-only components
-    expect(html.replace(/ nuxt-ssr-component-uid="[^"]*"/, '')).toContain('<div class="server-only" style="background-color:gray;"> server-only component </div>')
+    expect(html.replace(/ data-island-uid="[^"]*"/, '')).toContain('<div class="server-only" style="background-color:gray;"> server-only component </div>')
     // should register global components automatically
     expect(html).toContain('global component registered automatically')
     expect(html).toContain('global component via suffix')
@@ -1558,12 +1558,12 @@ describe('server components/islands', () => {
     await page.waitForLoadState('networkidle')
     await page.getByText('Go to page without lazy server component').click()
 
-    const text = (await page.innerText('pre')).replace(/nuxt-ssr-client="([^"]*)"/g, (_, content) => `nuxt-ssr-client="${content.split('-')[0]}"`)
+    const text = (await page.innerText('pre')).replaceAll(/ data-island-uid="([^"]*)"/g, '').replace(/data-island-client="([^"]*)"/g, (_, content) => `data-island-client="${content.split('-')[0]}"`)
 
     if (isWebpack) {
-      expect(text).toMatchInlineSnapshot('" End page <pre></pre><section id="fallback"><div nuxt-ssr-component-uid="4"> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div style="display:contents;" nuxt-ssr-slot-name="default"></div></div></section><section id="no-fallback"><div nuxt-ssr-component-uid="5"> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div style="display:contents;" nuxt-ssr-slot-name="default"></div></div></section><div nuxt-ssr-component-uid="3"> ServerWithClient.server.vue : <p>count: 0</p> This component should not be preloaded <div><!--[--><div>a</div><div>b</div><div>c</div><!--]--></div> This is not interactive <div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div class="interactive-component-wrapper" style="border:solid 1px red;"> The component bellow is not a slot but declared as interactive <div class="sugar-counter" nuxt-client=""> Sugar Counter 12 x 1 = 12 <button> Inc </button></div></div></div>"')
+      expect(text).toMatchInlineSnapshot('" End page <pre></pre><section id="fallback"><div> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--[--><div style="display: contents;" data-island-slot="default"></div><!--]--></div></section><section id="no-fallback"><div> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--[--><div style="display: contents;" data-island-slot="default"></div><!--]--></div></section><div> ServerWithClient.server.vue : <p>count: 0</p> This component should not be preloaded <div><!--[--><div>a</div><div>b</div><div>c</div><!--]--></div> This is not interactive <div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div class="interactive-component-wrapper" style="border:solid 1px red;"> The component bellow is not a slot but declared as interactive <div class="sugar-counter" nuxt-client=""> Sugar Counter 12 x 1 = 12 <button> Inc </button></div></div></div>"')
     } else {
-      expect(text).toMatchInlineSnapshot('" End page <pre></pre><section id="fallback"><div nuxt-ssr-component-uid="4"> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div style="display:contents;" nuxt-ssr-slot-name="default"></div></div></section><section id="no-fallback"><div nuxt-ssr-component-uid="5"> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div style="display:contents;" nuxt-ssr-slot-name="default"></div></div></section><div nuxt-ssr-component-uid="3"> ServerWithClient.server.vue : <p>count: 0</p> This component should not be preloaded <div><!--[--><div>a</div><div>b</div><div>c</div><!--]--></div> This is not interactive <div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div class="interactive-component-wrapper" style="border:solid 1px red;"> The component bellow is not a slot but declared as interactive <!--[--><div style="display: contents;" nuxt-ssr-client="Counter"></div><!--teleport start--><!--teleport end--><!--]--></div></div>"')
+      expect(text).toMatchInlineSnapshot(`" End page <pre></pre><section id="fallback"><div> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--[--><div style="display: contents;" data-island-slot="default"></div><!--]--></div></section><section id="no-fallback"><div> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">42</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--[--><div style="display: contents;" data-island-slot="default"></div><!--]--></div></section><div> ServerWithClient.server.vue : <p>count: 0</p> This component should not be preloaded <div><!--[--><div>a</div><div>b</div><div>c</div><!--]--></div> This is not interactive <div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div class="interactive-component-wrapper" style="border:solid 1px red;"> The component bellow is not a slot but declared as interactive <!--[--><div style="display: contents;" data-island-client="Counter"></div><!--teleport start--><!--teleport end--><!--]--></div></div>"`)
     }
     expect(text).toContain('async component that was very long')
 
@@ -1775,22 +1775,22 @@ describe('component islands', () => {
   it('renders components with route', async () => {
     const result: NuxtIslandResponse = await $fetch('/__nuxt_island/RouteComponent.json?url=/foo')
 
+    result.html = result.html.replace(/ data-island-uid="[^"]*"/g, '')
     if (isDev()) {
       result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates') && (l.href.startsWith('_nuxt/components/islands/') && l.href.includes('_nuxt/components/islands/RouteComponent')))
     }
 
     expect(result).toMatchInlineSnapshot(`
       {
-        "chunks": {},
+        "components": {},
         "head": {
           "link": [],
           "style": [],
         },
-        "html": "<pre nuxt-ssr-component-uid>    Route: /foo
+        "html": "<pre data-island-uid>    Route: /foo
         </pre>",
-        "props": {},
+        "slots": {},
         "state": {},
-        "teleports": {},
       }
     `)
   })
@@ -1804,19 +1804,57 @@ describe('component islands', () => {
     if (isDev()) {
       result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates') && (l.href.startsWith('_nuxt/components/islands/') && l.href.includes('_nuxt/components/islands/LongAsyncComponent')))
     }
+    result.html = result.html.replaceAll(/ (data-island-uid|data-island-client)="([^"]*)"/g, '')
     expect(result).toMatchInlineSnapshot(`
-          {
-            "chunks": {},
-            "head": {
-              "link": [],
-              "style": [],
-            },
-            "html": "<div nuxt-ssr-component-uid><div> count is above 2 </div><div style="display:contents;" nuxt-ssr-slot-name="default"></div> that was very long ... <div id="long-async-component-count">3</div>  <div style="display:contents;" nuxt-ssr-slot-name="test" nuxt-ssr-slot-data="[{&quot;count&quot;:3}]"></div><p>hello world !!!</p><div style="display:contents;" nuxt-ssr-slot-name="hello" nuxt-ssr-slot-data="[{&quot;t&quot;:0},{&quot;t&quot;:1},{&quot;t&quot;:2}]"><div nuxt-slot-fallback-start="hello"></div><!--[--><div style="display:contents;"><div> fallback slot -- index: 0</div></div><div style="display:contents;"><div> fallback slot -- index: 1</div></div><div style="display:contents;"><div> fallback slot -- index: 2</div></div><!--]--><div nuxt-slot-fallback-end></div></div><div style="display:contents;" nuxt-ssr-slot-name="fallback" nuxt-ssr-slot-data="[{&quot;t&quot;:&quot;fall&quot;},{&quot;t&quot;:&quot;back&quot;}]"><div nuxt-slot-fallback-start="fallback"></div><!--[--><div style="display:contents;"><div>fall slot -- index: 0</div><div class="fallback-slot-content"> wonderful fallback </div></div><div style="display:contents;"><div>back slot -- index: 1</div><div class="fallback-slot-content"> wonderful fallback </div></div><!--]--><div nuxt-slot-fallback-end></div></div></div>",
-            "props": {},
-            "state": {},
-            "teleports": {},
-          }
-        `)
+      {
+        "components": {},
+        "head": {
+          "link": [],
+          "style": [],
+        },
+        "html": "<div data-island-uid><div> count is above 2 </div><!--[--><div style="display: contents;" data-island-uid data-island-slot="default"></div><!--]--> that was very long ... <div id="long-async-component-count">3</div>  <!--[--><div style="display: contents;" data-island-uid data-island-slot="test"></div><!--]--><p>hello world !!!</p><!--[--><div style="display: contents;" data-island-uid data-island-slot="hello"></div><!--teleport start--><!--teleport end--><!--]--><!--[--><div style="display: contents;" data-island-uid data-island-slot="fallback"></div><!--teleport start--><!--teleport end--><!--]--></div>",
+        "slots": {
+          "default": {
+            "fallback": "",
+            "props": [],
+          },
+          "fallback": {
+            "fallback": "<!--[--><div style="display:contents;"><div>fall slot -- index: 0</div><div class="fallback-slot-content"> wonderful fallback </div></div><div style="display:contents;"><div>back slot -- index: 1</div><div class="fallback-slot-content"> wonderful fallback </div></div><!--]--><!--teleport anchor-->",
+            "props": [
+              {
+                "t": "fall",
+              },
+              {
+                "t": "back",
+              },
+            ],
+          },
+          "hello": {
+            "fallback": "<!--[--><div style="display:contents;"><div> fallback slot -- index: 0</div></div><div style="display:contents;"><div> fallback slot -- index: 1</div></div><div style="display:contents;"><div> fallback slot -- index: 2</div></div><!--]--><!--teleport anchor-->",
+            "props": [
+              {
+                "t": 0,
+              },
+              {
+                "t": 1,
+              },
+              {
+                "t": 2,
+              },
+            ],
+          },
+          "test": {
+            "fallback": "",
+            "props": [
+              {
+                "count": 3,
+              },
+            ],
+          },
+        },
+        "state": {},
+      }
+    `)
   })
 
   it('render .server async component', async () => {
@@ -1829,23 +1867,23 @@ describe('component islands', () => {
       result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates') && (l.href.startsWith('_nuxt/components/islands/') && l.href.includes('_nuxt/components/islands/AsyncServerComponent')))
     }
     result.props = {}
-    result.teleports = {}
-    result.chunks = {}
-    result.html = result.html.replace(/ nuxt-ssr-client="([^"]*)"/g, (_, content) => `'nuxt-ssr-client="${content.split('-')[0]}"`)
+    result.components = {}
+    result.slots = {}
+    result.html = result.html.replaceAll(/ (data-island-uid|data-island-client)="([^"]*)"/g, '')
 
     expect(result).toMatchInlineSnapshot(`
-        {
-          "chunks": {},
-          "head": {
-            "link": [],
-            "style": [],
-          },
-          "html": "<div nuxt-ssr-component-uid> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">2</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div style="display:contents;" nuxt-ssr-slot-name="default"></div></div>",
-          "props": {},
-          "state": {},
-          "teleports": {},
-        }
-      `)
+      {
+        "components": {},
+        "head": {
+          "link": [],
+          "style": [],
+        },
+        "html": "<div data-island-uid> This is a .server (20ms) async component that was very long ... <div id="async-server-component-count">2</div><div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--[--><div style="display: contents;" data-island-uid data-island-slot="default"></div><!--]--></div>",
+        "props": {},
+        "slots": {},
+        "state": {},
+      }
+    `)
   })
 
   if (!isWebpack) {
@@ -1854,40 +1892,33 @@ describe('component islands', () => {
       if (isDev()) {
         result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates') && (l.href.startsWith('_nuxt/components/islands/') && l.href.includes('_nuxt/components/islands/AsyncServerComponent')))
       }
-      const { props, teleports, chunks } = result
-      result.props = {}
-      result.teleports = {}
-      result.chunks = {}
-      result.html = result.html.replace(/ nuxt-ssr-client="([^"]*)"/g, (_, content) => `'nuxt-ssr-client="${content.split('-')[0]}"`)
+      const { components } = result
+      result.components = {}
+      result.slots = {}
+      result.html = result.html.replace(/ data-island-client="([^"]*)"/g, (_, content) => ` data-island-client="${content.split('-')[0]}"`)
 
-      const propsEntries = Object.entries(props || {})
-      const teleportsEntries = Object.entries(teleports || {})
-      const chunksEntries = Object.entries(chunks || {})
+      const teleportsEntries = Object.entries(components || {})
 
       expect(result).toMatchInlineSnapshot(`
         {
-          "chunks": {},
+          "components": {},
           "head": {
             "link": [],
             "style": [],
           },
-          "html": "<div nuxt-ssr-component-uid> ServerWithClient.server.vue : <p>count: 0</p> This component should not be preloaded <div><!--[--><div>a</div><div>b</div><div>c</div><!--]--></div> This is not interactive <div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div class="interactive-component-wrapper" style="border:solid 1px red;"> The component bellow is not a slot but declared as interactive <!--[--><div style="display: contents;"'nuxt-ssr-client="Counter"></div><!--teleport start--><!--teleport end--><!--]--></div></div>",
-          "props": {},
+          "html": "<div data-island-uid> ServerWithClient.server.vue : <p>count: 0</p> This component should not be preloaded <div><!--[--><div>a</div><div>b</div><div>c</div><!--]--></div> This is not interactive <div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><div class="interactive-component-wrapper" style="border:solid 1px red;"> The component bellow is not a slot but declared as interactive <!--[--><div style="display: contents;" data-island-uid data-island-client="Counter"></div><!--teleport start--><!--teleport end--><!--]--></div></div>",
+          "slots": {},
           "state": {},
-          "teleports": {},
         }
       `)
-      expect(propsEntries).toHaveLength(1)
       expect(teleportsEntries).toHaveLength(1)
-      expect(propsEntries[0][0].startsWith('Counter-')).toBeTruthy()
       expect(teleportsEntries[0][0].startsWith('Counter-')).toBeTruthy()
-      expect(chunksEntries[0][0]).toBe('Counter')
-      expect(propsEntries[0][1]).toMatchInlineSnapshot(`
+      expect(teleportsEntries[0][1].props).toMatchInlineSnapshot(`
       {
         "multiplier": 1,
       }
     `)
-      expect(teleportsEntries[0][1]).toMatchInlineSnapshot('"<div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--teleport anchor-->"')
+      expect(teleportsEntries[0][1].html).toMatchInlineSnapshot('"<div class="sugar-counter"> Sugar Counter 12 x 1 = 12 <button> Inc </button></div><!--teleport anchor-->"')
     })
   }
 
@@ -1900,7 +1931,7 @@ describe('component islands', () => {
         obj: { foo: 42, bar: false, me: 'hi' }
       })
     }))
-    result.html = result.html.replace(/ nuxt-ssr-component-uid="([^"]*)"/g, '')
+    result.html = result.html.replace(/ data-island-uid="([^"]*)"/g, '')
 
     if (isDev()) {
       result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates'))
@@ -1939,8 +1970,8 @@ describe('component islands', () => {
       `)
     }
 
-    expect(result.html.replace(/data-v-\w+|"|<!--.*-->/g, '')).toMatchInlineSnapshot(`
-      "<div nuxt-ssr-component-uid > Was router enabled: true <br > Props: <pre >{
+    expect(result.html.replace(/data-v-\w+|"|<!--.*-->/g, '').replace(/data-island-uid="[^"]"/g, '')).toMatchInlineSnapshot(`
+      "<div data-island-uid > Was router enabled: true <br > Props: <pre >{
         number: 3487,
         str: something,
         obj: {