diff --git a/packages/nuxt/src/app/components/island-renderer.ts b/packages/nuxt/src/app/components/island-renderer.ts
new file mode 100644
index 0000000000..ae4642efaa
--- /dev/null
+++ b/packages/nuxt/src/app/components/island-renderer.ts
@@ -0,0 +1,33 @@
+import { createBlock, defineComponent, h, Teleport } from 'vue'
+
+// @ts-ignore
+import * as islandComponents from '#build/components.islands.mjs'
+import { createError } from '#app'
+
+export default defineComponent({
+  props: {
+    context: {
+      type: Object as () => { name: string, props?: Record<string, any> },
+      required: true
+    }
+  },
+  async setup (props) {
+    // TODO: https://github.com/vuejs/core/issues/6207
+    const component = islandComponents[props.context.name]
+
+    if (!component) {
+      throw createError({
+        statusCode: 404,
+        statusMessage: `Island component not found: ${JSON.stringify(component)}`
+      })
+    }
+
+    if (typeof component === 'object') {
+      await component.__asyncLoader?.()
+    }
+
+    return () => [
+      createBlock(Teleport as any, { to: 'nuxt-island' }, [h(component || 'span', props.context.props)])
+    ]
+  }
+})
diff --git a/packages/nuxt/src/app/components/nuxt-island.ts b/packages/nuxt/src/app/components/nuxt-island.ts
new file mode 100644
index 0000000000..32faf805c2
--- /dev/null
+++ b/packages/nuxt/src/app/components/nuxt-island.ts
@@ -0,0 +1,67 @@
+import { defineComponent, createStaticVNode, computed, ref, watch } from 'vue'
+import { debounce } from 'perfect-debounce'
+import { hash } from 'ohash'
+import type { MetaObject } from '@nuxt/schema'
+// eslint-disable-next-line import/no-restricted-paths
+import type { NuxtIslandResponse } from '../../core/runtime/nitro/renderer'
+import { useHead, useNuxtApp } from '#app'
+
+const pKey = '_islandPromises'
+
+export default defineComponent({
+  name: 'NuxtIsland',
+  props: {
+    name: {
+      type: String,
+      required: true
+    },
+    props: {
+      type: Object,
+      default: () => undefined
+    },
+    context: {
+      type: Object,
+      default: () => ({})
+    }
+  },
+  async setup (props) {
+    const nuxtApp = useNuxtApp()
+    const hashId = computed(() => hash([props.name, props.props, props.context]))
+    const html = ref<string>('')
+    const cHead = ref<MetaObject>({ link: [], style: [] })
+    useHead(cHead)
+
+    function _fetchComponent () {
+      // TODO: Validate response
+      return $fetch<NuxtIslandResponse>(`/__nuxt_island/${props.name}:${hashId.value}`, {
+        params: {
+          ...props.context,
+          props: props.props ? JSON.stringify(props.props) : undefined
+        }
+      })
+    }
+
+    async function fetchComponent () {
+      nuxtApp[pKey] = nuxtApp[pKey] || {}
+      if (!nuxtApp[pKey][hashId.value]) {
+        nuxtApp[pKey][hashId.value] = _fetchComponent().finally(() => {
+          delete nuxtApp[pKey][hashId.value]
+        })
+      }
+      const res: NuxtIslandResponse = await nuxtApp[pKey][hashId.value]
+      cHead.value.link = res.head.link
+      cHead.value.style = res.head.style
+      html.value = res.html
+    }
+
+    if (process.server || !nuxtApp.isHydrating) {
+      await fetchComponent()
+    }
+
+    if (process.client) {
+      watch(props, debounce(fetchComponent, 100))
+    }
+
+    return () => createStaticVNode(html.value, 1)
+  }
+})
diff --git a/packages/nuxt/src/app/components/nuxt-root.vue b/packages/nuxt/src/app/components/nuxt-root.vue
index e703fef657..3cc5167472 100644
--- a/packages/nuxt/src/app/components/nuxt-root.vue
+++ b/packages/nuxt/src/app/components/nuxt-root.vue
@@ -1,6 +1,7 @@
 <template>
   <Suspense @resolve="onResolve">
     <ErrorComponent v-if="error" :error="error" />
+    <IslandRendererer v-else-if="islandContext" :context="islandContext" />
     <AppComponent v-else />
   </Suspense>
 </template>
@@ -11,6 +12,9 @@ import { callWithNuxt, isNuxtError, showError, useError, useRoute, useNuxtApp }
 import AppComponent from '#build/app-component.mjs'
 
 const ErrorComponent = defineAsyncComponent(() => import('#build/error-component.mjs').then(r => r.default || r))
+const IslandRendererer = process.server
+  ? defineAsyncComponent(() => import('./island-renderer').then(r => r.default || r))
+  : () => null
 
 const nuxtApp = useNuxtApp()
 const onResolve = nuxtApp.deferHydration()
@@ -32,4 +36,7 @@ onErrorCaptured((err, target, info) => {
     callWithNuxt(nuxtApp, showError, [err])
   }
 })
+
+// Component islands context
+const { islandContext } = process.server && nuxtApp.ssrContext
 </script>
diff --git a/packages/nuxt/src/app/nuxt.ts b/packages/nuxt/src/app/nuxt.ts
index d7a4d8e534..a6bd2aa22d 100644
--- a/packages/nuxt/src/app/nuxt.ts
+++ b/packages/nuxt/src/app/nuxt.ts
@@ -6,6 +6,8 @@ import type { RuntimeConfig, AppConfigInput } from '@nuxt/schema'
 import { getContext } from 'unctx'
 import type { SSRContext } from 'vue-bundle-renderer/runtime'
 import type { H3Event } from 'h3'
+// eslint-disable-next-line import/no-restricted-paths
+import type { NuxtIslandContext } from '../core/runtime/nitro/renderer'
 
 const nuxtAppCtx = getContext<NuxtApp>('nuxt-app')
 
@@ -50,6 +52,7 @@ export interface NuxtSSRContext extends SSRContext {
   payload: _NuxtApp['payload']
   teleports?: Record<string, string>
   renderMeta?: () => Promise<NuxtMeta> | NuxtMeta
+  islandContext?: NuxtIslandContext
 }
 
 interface _NuxtApp {
diff --git a/packages/nuxt/src/components/module.ts b/packages/nuxt/src/components/module.ts
index 5f078f502b..493e65dcf9 100644
--- a/packages/nuxt/src/components/module.ts
+++ b/packages/nuxt/src/components/module.ts
@@ -3,7 +3,7 @@ import { relative, resolve } from 'pathe'
 import { defineNuxtModule, resolveAlias, addTemplate, addPluginTemplate, updateTemplates } from '@nuxt/kit'
 import type { Component, ComponentsDir, ComponentsOptions } from '@nuxt/schema'
 import { distDir } from '../dirs'
-import { componentsPluginTemplate, componentsTemplate, componentsTypeTemplate } from './templates'
+import { componentsPluginTemplate, componentsTemplate, componentsIslandsTemplate, componentsTypeTemplate } from './templates'
 import { scanComponents } from './scan'
 import { loaderPlugin } from './loader'
 import { TreeShakeTemplatePlugin } from './tree-shake'
@@ -14,7 +14,7 @@ function compareDirByPathLength ({ path: pathA }: { path: string }, { path: path
   return pathB.split(/[\\/]/).filter(Boolean).length - pathA.split(/[\\/]/).filter(Boolean).length
 }
 
-const DEFAULT_COMPONENTS_DIRS_RE = /\/components$|\/components\/global$/
+const DEFAULT_COMPONENTS_DIRS_RE = /\/components(\/global|\/islands)?$/
 
 type getComponentsT = (mode?: 'client' | 'server' | 'all') => Component[]
 
@@ -44,6 +44,7 @@ export default defineNuxtModule<ComponentsOptions>({
       }
       if (dir === true || dir === undefined) {
         return [
+          { path: resolve(cwd, 'components/islands'), island: true },
           { path: resolve(cwd, 'components/global'), global: true },
           { path: resolve(cwd, 'components') }
         ]
@@ -117,6 +118,12 @@ export default defineNuxtModule<ComponentsOptions>({
     addTemplate({ ...componentsTemplate, filename: 'components.server.mjs', options: { getComponents, mode: 'server' } })
     // components.client.mjs
     addTemplate({ ...componentsTemplate, filename: 'components.client.mjs', options: { getComponents, mode: 'client' } })
+    // components.islands.mjs
+    if (nuxt.options.experimental.componentIslands) {
+      addTemplate({ ...componentsIslandsTemplate, filename: 'components.islands.mjs', options: { getComponents } })
+    } else {
+      addTemplate({ filename: 'components.islands.mjs', getContents: () => 'export default {}' })
+    }
 
     nuxt.hook('vite:extendConfig', (config, { isClient }) => {
       const mode = isClient ? 'client' : 'server'
diff --git a/packages/nuxt/src/components/scan.ts b/packages/nuxt/src/components/scan.ts
index 4cad3c587d..3b85cbd0fa 100644
--- a/packages/nuxt/src/components/scan.ts
+++ b/packages/nuxt/src/components/scan.ts
@@ -62,9 +62,10 @@ export async function scanComponents (dirs: ComponentsDir[], srcDir: string): Pr
        */
       let fileName = basename(filePath, extname(filePath))
 
-      const global = /\.(global)$/.test(fileName) || dir.global
-      const mode = (fileName.match(/(?<=\.)(client|server)(\.global)?$/)?.[1] || 'all') as 'client' | 'server' | 'all'
-      fileName = fileName.replace(/(\.(client|server))?(\.global)?$/, '')
+      const island = /\.(island)(\.global)?$/.test(fileName) || dir.island
+      const global = /\.(global)(\.island)?$/.test(fileName) || dir.global
+      const mode = island ? 'server' : (fileName.match(/(?<=\.)(client|server)(\.global|\.island)*$/)?.[1] || 'all') as 'client' | 'server' | 'all'
+      fileName = fileName.replace(/(\.(client|server))?(\.global|\.island)*$/, '')
 
       if (fileName.toLowerCase() === 'index') {
         fileName = dir.pathPrefix === false ? basename(dirname(filePath)) : '' /* inherits from path */
@@ -107,6 +108,7 @@ export async function scanComponents (dirs: ComponentsDir[], srcDir: string): Pr
         // inheritable from directory configuration
         mode,
         global,
+        island,
         prefetch: Boolean(dir.prefetch),
         preload: Boolean(dir.preload),
         // specific to the file
diff --git a/packages/nuxt/src/components/templates.ts b/packages/nuxt/src/components/templates.ts
index 00b3356dbf..ee5cbf2892 100644
--- a/packages/nuxt/src/components/templates.ts
+++ b/packages/nuxt/src/components/templates.ts
@@ -57,7 +57,7 @@ export const componentsTemplate: NuxtTemplate<ComponentsTemplateContext> = {
     imports.add('import { defineAsyncComponent } from \'vue\'')
 
     let num = 0
-    const components = options.getComponents(options.mode).flatMap((c) => {
+    const components = options.getComponents(options.mode).filter(c => !c.island).flatMap((c) => {
       const exp = c.export === 'default' ? 'c.default || c' : `c['${c.export}']`
       const comment = createImportMagicComments(c)
 
@@ -78,16 +78,29 @@ export const componentsTemplate: NuxtTemplate<ComponentsTemplateContext> = {
     return [
       ...imports,
       ...components,
-      `export const componentNames = ${JSON.stringify(options.getComponents().map(c => c.pascalName))}`
+      `export const componentNames = ${JSON.stringify(options.getComponents().filter(c => !c.island).map(c => c.pascalName))}`
     ].join('\n')
   }
 }
 
+export const componentsIslandsTemplate: NuxtTemplate<ComponentsTemplateContext> = {
+  // components.islands.mjs'
+  getContents ({ options }) {
+    return options.getComponents().filter(c => c.island).map(
+      (c) => {
+        const exp = c.export === 'default' ? 'c.default || c' : `c['${c.export}']`
+        const comment = createImportMagicComments(c)
+        return `export const ${c.pascalName} = defineAsyncComponent(${genDynamicImport(c.filePath, { comment })}.then(c => ${exp}))`
+      }
+    ).join('\n')
+  }
+}
+
 export const componentsTypeTemplate: NuxtTemplate<ComponentsTemplateContext> = {
   filename: 'components.d.ts',
   getContents: ({ options, nuxt }) => {
     const buildDir = nuxt.options.buildDir
-    const componentTypes = options.getComponents().map(c => [
+    const componentTypes = options.getComponents().filter(c => !c.island).map(c => [
       c.pascalName,
       `typeof ${genDynamicImport(isAbsolute(c.filePath)
         ? relative(buildDir, c.filePath).replace(/(?<=\w)\.(?!vue)\w+$/g, '')
diff --git a/packages/nuxt/src/core/nitro.ts b/packages/nuxt/src/core/nitro.ts
index 43e918464c..825e267e57 100644
--- a/packages/nuxt/src/core/nitro.ts
+++ b/packages/nuxt/src/core/nitro.ts
@@ -116,6 +116,7 @@ export async function initNitro (nuxt: Nuxt & { _nitro?: Nitro }) {
       'process.env.NUXT_NO_SCRIPTS': !!nuxt.options.experimental.noScripts && !nuxt.options.dev,
       'process.env.NUXT_INLINE_STYLES': !!nuxt.options.experimental.inlineSSRStyles,
       'process.env.NUXT_PAYLOAD_EXTRACTION': !!nuxt.options.experimental.payloadExtraction,
+      'process.env.NUXT_COMPONENT_ISLANDS': !!nuxt.options.experimental.componentIslands,
       'process.dev': nuxt.options.dev,
       __VUE_PROD_DEVTOOLS__: false
     },
diff --git a/packages/nuxt/src/core/nuxt.ts b/packages/nuxt/src/core/nuxt.ts
index 67462b743c..274e047a59 100644
--- a/packages/nuxt/src/core/nuxt.ts
+++ b/packages/nuxt/src/core/nuxt.ts
@@ -2,11 +2,11 @@ import { join, normalize, resolve } from 'pathe'
 import { createHooks, createDebugger } from 'hookable'
 import type { Nuxt, NuxtOptions, NuxtHooks } from '@nuxt/schema'
 import { loadNuxtConfig, LoadNuxtOptions, nuxtCtx, installModule, addComponent, addVitePlugin, addWebpackPlugin, tryResolveModule, addPlugin } from '@nuxt/kit'
-// Temporary until finding better placement
 /* eslint-disable import/no-restricted-paths */
 import escapeRE from 'escape-string-regexp'
 import fse from 'fs-extra'
 import { withoutLeadingSlash } from 'ufo'
+/* eslint-disable import/no-restricted-paths */
 import pagesModule from '../pages/module'
 import metaModule from '../head/module'
 import componentsModule from '../components/module'
@@ -167,6 +167,14 @@ async function initNuxt (nuxt: Nuxt) {
     filePath: resolve(nuxt.options.appDir, 'components/nuxt-loading-indicator')
   })
 
+  // Add <NuxtIsland>
+  if (nuxt.options.experimental.componentIslands) {
+    addComponent({
+      name: 'NuxtIsland',
+      filePath: resolve(nuxt.options.appDir, 'components/nuxt-island')
+    })
+  }
+
   // Add prerender payload support
   if (!nuxt.options.dev && nuxt.options.experimental.payloadExtraction) {
     addPlugin(resolve(nuxt.options.appDir, 'plugins/payload.client'))
diff --git a/packages/nuxt/src/core/runtime/nitro/renderer.ts b/packages/nuxt/src/core/runtime/nitro/renderer.ts
index 0b01f1b2e0..b68ca1cabb 100644
--- a/packages/nuxt/src/core/runtime/nitro/renderer.ts
+++ b/packages/nuxt/src/core/runtime/nitro/renderer.ts
@@ -1,11 +1,13 @@
 import { createRenderer, renderResourceHeaders } from 'vue-bundle-renderer/runtime'
 import type { RenderResponse } from 'nitropack'
 import type { Manifest } from 'vite'
-import { appendHeader, createError, getQuery, writeEarlyHints } from 'h3'
+import { appendHeader, getQuery, H3Event, writeEarlyHints, readBody, createError } from 'h3'
 import devalue from '@nuxt/devalue'
+import destr from 'destr'
 import { joinURL } from 'ufo'
 import { renderToString as _renderToString } from 'vue/server-renderer'
 import { useRuntimeConfig, useNitroApp, defineRenderHandler, getRouteRules } from '#internal/nitro'
+import { hash } from 'ohash'
 // eslint-disable-next-line import/no-restricted-paths
 import type { NuxtApp, NuxtSSRContext } from '#app'
 // @ts-ignore
@@ -19,6 +21,7 @@ globalThis.__buildAssetsURL = buildAssetsURL
 globalThis.__publicAssetsURL = publicAssetsURL
 
 export interface NuxtRenderHTMLContext {
+  island?: boolean
   htmlAttrs: string[]
   head: string[]
   bodyAttrs: string[]
@@ -27,6 +30,23 @@ export interface NuxtRenderHTMLContext {
   bodyAppend: string[]
 }
 
+export interface NuxtIslandContext {
+  id?: string
+  name: string
+  props?: Record<string, any>
+  url?: string
+}
+
+export interface NuxtIslandResponse {
+  id?: string
+  html: string
+  state: Record<string, any>
+  head: {
+    link: (Record<string, string>)[]
+    style: ({ innerHTML: string, key: string })[]
+  }
+}
+
 export interface NuxtRenderResponse {
   body: string,
   statusCode: number,
@@ -115,12 +135,33 @@ const getSPARenderer = lazyCachedFunction(async () => {
   }
 })
 
+async function getIslandContext (event: H3Event): Promise<NuxtIslandContext> {
+  // TODO: Strict validation for url
+  const url = event.req.url?.substring('/__nuxt_island'.length + 1) || ''
+  const [componentName, hashId] = url.split('?')[0].split(':')
+
+  // TODO: Validate context
+  const context = event.req.method === 'GET' ? getQuery(event) : await readBody(event)
+
+  const ctx: NuxtIslandContext = {
+    url: '/',
+    ...context,
+    id: hashId,
+    name: componentName,
+    props: destr(context.props) || {}
+  }
+
+  return ctx
+}
+
 const PAYLOAD_CACHE = (process.env.NUXT_PAYLOAD_EXTRACTION && process.env.prerender) ? new Map() : null // TODO: Use LRU cache
 const PAYLOAD_URL_RE = /\/_payload(\.[a-zA-Z0-9]+)?.js(\?.*)?$/
 
 const PRERENDER_NO_SSR_ROUTES = new Set(['/index.html', '/200.html', '/404.html'])
 
 export default defineRenderHandler(async (event) => {
+  const nitroApp = useNitroApp()
+
   // Whether we're rendering an error page
   const ssrError = event.node.req.url?.startsWith('/__nuxt_error')
     ? getQuery(event) as Exclude<NuxtApp['payload']['error'], Error>
@@ -129,7 +170,13 @@ export default defineRenderHandler(async (event) => {
     throw createError('Cannot directly render error page!')
   }
 
-  let url = ssrError?.url as string || event.node.req.url!
+  // Check for island component rendering
+  const islandContext = (process.env.NUXT_COMPONENT_ISLANDS && event.req.url?.startsWith('/__nuxt_island'))
+    ? await getIslandContext(event)
+    : undefined
+
+  // Request url
+  let url = ssrError?.url as string || islandContext?.url || event.node.req.url!
 
   // Whether we are rendering payload route
   const isRenderingPayload = PAYLOAD_URL_RE.test(url)
@@ -156,7 +203,8 @@ export default defineRenderHandler(async (event) => {
       (process.env.prerender ? PRERENDER_NO_SSR_ROUTES.has(url) : false),
     error: !!ssrError,
     nuxt: undefined!, /* NuxtApp */
-    payload: (ssrError ? { error: ssrError } : {}) as NuxtSSRContext['payload']
+    payload: (ssrError ? { error: ssrError } : {}) as NuxtSSRContext['payload'],
+    islandContext
   }
 
   // Whether we are prerendering route
@@ -212,6 +260,7 @@ export default defineRenderHandler(async (event) => {
 
   // Create render context
   const htmlContext: NuxtRenderHTMLContext = {
+    island: Boolean(islandContext),
     htmlAttrs: normalizeChunks([renderedMeta.htmlAttrs]),
     head: normalizeChunks([
       renderedMeta.headTags,
@@ -226,10 +275,7 @@ export default defineRenderHandler(async (event) => {
       renderedMeta.bodyScriptsPrepend,
       ssrContext.teleports?.body
     ]),
-    body: [
-      // TODO: Rename to _rendered.body in next vue-bundle-renderer
-      _rendered.html
-    ],
+    body: (process.env.NUXT_COMPONENT_ISLANDS && islandContext) ? [] : [_rendered.html],
     bodyAppend: normalizeChunks([
       process.env.NUXT_NO_SCRIPTS
         ? undefined
@@ -244,24 +290,58 @@ export default defineRenderHandler(async (event) => {
   }
 
   // Allow hooking into the rendered result
-  const nitroApp = useNitroApp()
   await nitroApp.hooks.callHook('render:html', htmlContext, { event })
 
+  // Response for component islands
+  if (process.env.NUXT_COMPONENT_ISLANDS && islandContext) {
+    const _tags = htmlContext.head.flatMap(head => extractHTMLTags(head))
+    const head: NuxtIslandResponse['head'] = {
+      link: _tags.filter(tag => tag.tagName === 'link' && tag.attrs.rel === 'stylesheet' && tag.attrs.href.includes('scoped') && !tag.attrs.href.includes('pages/')).map(tag => ({
+        key: 'island-link-' + hash(tag.attrs.href),
+        ...tag.attrs
+      })),
+      style: _tags.filter(tag => tag.tagName === 'style' && tag.innerHTML).map(tag => ({
+        key: 'island-style-' + hash(tag.innerHTML),
+        innerHTML: tag.innerHTML
+      }))
+    }
+
+    const islandResponse: NuxtIslandResponse = {
+      id: islandContext.id,
+      head,
+      html: ssrContext.teleports!['nuxt-island'].replace(/<!--.*-->/g, ''),
+      state: ssrContext.payload.state
+    }
+
+    await nitroApp.hooks.callHook('render:island', islandResponse, { event, islandContext })
+
+    const response: RenderResponse = {
+      body: JSON.stringify(islandResponse, null, 2),
+      statusCode: event.res.statusCode,
+      statusMessage: event.res.statusMessage,
+      headers: {
+        'content-type': 'application/json;charset=utf-8',
+        'x-powered-by': 'Nuxt'
+      }
+    }
+    return response
+  }
+
   // Construct HTML response
   const response: RenderResponse = {
     body: renderHTMLDocument(htmlContext),
     statusCode: event.node.res.statusCode,
     statusMessage: event.node.res.statusMessage,
     headers: {
-      'Content-Type': 'text/html;charset=UTF-8',
-      'X-Powered-By': 'Nuxt'
+      'content-type': 'text/html;charset=utf-8',
+      'x-powered-by': 'Nuxt'
     }
   }
 
   return response
 })
 
-function lazyCachedFunction <T> (fn: () => Promise<T>): () => Promise<T> {
+function lazyCachedFunction<T> (fn: () => Promise<T>): () => Promise<T> {
   let res: Promise<T> | null = null
   return () => {
     if (res === null) {
@@ -291,6 +371,22 @@ function renderHTMLDocument (html: NuxtRenderHTMLContext) {
 </html>`
 }
 
+// TOOD: Move to external library
+const HTML_TAG_RE = /<(?<tag>[a-z]+)(?<rawAttrs> [^>]*)?>(?:(?<innerHTML>[\s\S]*?)<\/\k<tag>)?/g
+const HTML_TAG_ATTR_RE = /(?<name>[a-z]+)="(?<value>[^"]*)"/g
+function extractHTMLTags (html: string) {
+  const tags: { tagName: string, attrs: Record<string, string>, innerHTML: string }[] = []
+  for (const tagMatch of html.matchAll(HTML_TAG_RE)) {
+    const attrs: Record<string, string> = {}
+    for (const attrMatch of tagMatch.groups!.rawAttrs?.matchAll(HTML_TAG_ATTR_RE) || []) {
+      attrs[attrMatch.groups!.name] = attrMatch.groups!.value
+    }
+    const innerHTML = tagMatch.groups!.innerHTML || ''
+    tags.push({ tagName: tagMatch.groups!.tag, attrs, innerHTML })
+  }
+  return tags
+}
+
 async function renderInlineStyles (usedModules: Set<string> | string[]) {
   const styleMap = await getSSRStyles()
   const inlinedStyles = new Set<string>()
diff --git a/packages/nuxt/test/fixture/components/global/Glob.vue b/packages/nuxt/test/fixture/components/global/Glob.vue
new file mode 100644
index 0000000000..76d4486c40
--- /dev/null
+++ b/packages/nuxt/test/fixture/components/global/Glob.vue
@@ -0,0 +1,5 @@
+<template>
+  <div>
+    Global component from folder
+  </div>
+</template>
diff --git a/packages/nuxt/test/fixture/components/islands/Isle.vue b/packages/nuxt/test/fixture/components/islands/Isle.vue
new file mode 100644
index 0000000000..48b2f5e7bd
--- /dev/null
+++ b/packages/nuxt/test/fixture/components/islands/Isle.vue
@@ -0,0 +1,5 @@
+<template>
+  <div>
+    Island from folder
+  </div>
+</template>
diff --git a/packages/nuxt/test/fixture/components/some-glob.global.vue b/packages/nuxt/test/fixture/components/some-glob.global.vue
new file mode 100644
index 0000000000..02137b9175
--- /dev/null
+++ b/packages/nuxt/test/fixture/components/some-glob.global.vue
@@ -0,0 +1,5 @@
+<template>
+  <div>
+    Global component from suffix
+  </div>
+</template>
diff --git a/packages/nuxt/test/fixture/components/some.island.vue b/packages/nuxt/test/fixture/components/some.island.vue
new file mode 100644
index 0000000000..4ed36d3f49
--- /dev/null
+++ b/packages/nuxt/test/fixture/components/some.island.vue
@@ -0,0 +1,5 @@
+<template>
+  <div>
+    Island defined with suffix
+  </div>
+</template>
diff --git a/packages/nuxt/test/scan-components.test.ts b/packages/nuxt/test/scan-components.test.ts
index 8e4fd12b7d..ee5000a371 100644
--- a/packages/nuxt/test/scan-components.test.ts
+++ b/packages/nuxt/test/scan-components.test.ts
@@ -11,6 +11,36 @@ vi.mock('@nuxt/kit', () => ({
 }))
 
 const dirs: ComponentsDir[] = [
+  {
+    path: rFixture('components/islands'),
+    enabled: true,
+    extensions: [
+      'vue'
+    ],
+    pattern: '**/*.{vue,}',
+    ignore: [
+      '**/*.stories.{js,ts,jsx,tsx}',
+      '**/*{M,.m,-m}ixin.{js,ts,jsx,tsx}',
+      '**/*.d.ts'
+    ],
+    transpile: false,
+    island: true
+  },
+  {
+    path: rFixture('components/global'),
+    enabled: true,
+    extensions: [
+      'vue'
+    ],
+    pattern: '**/*.{vue,}',
+    ignore: [
+      '**/*.stories.{js,ts,jsx,tsx}',
+      '**/*{M,.m,-m}ixin.{js,ts,jsx,tsx}',
+      '**/*.d.ts'
+    ],
+    transpile: false,
+    global: true
+  },
   {
     path: rFixture('components'),
     enabled: true,
@@ -57,6 +87,30 @@ const dirs: ComponentsDir[] = [
 ]
 
 const expectedComponents = [
+  {
+    chunkName: 'components/isle-server',
+    export: 'default',
+    global: undefined,
+    island: true,
+    kebabName: 'isle',
+    mode: 'server',
+    pascalName: 'Isle',
+    prefetch: false,
+    preload: false,
+    shortPath: 'components/islands/Isle.vue'
+  },
+  {
+    chunkName: 'components/glob',
+    export: 'default',
+    global: true,
+    island: undefined,
+    kebabName: 'glob',
+    mode: 'all',
+    pascalName: 'Glob',
+    prefetch: false,
+    preload: false,
+    shortPath: 'components/global/Glob.vue'
+  },
   {
     mode: 'all',
     pascalName: 'HelloWorld',
@@ -65,6 +119,7 @@ const expectedComponents = [
     shortPath: 'components/HelloWorld.vue',
     export: 'default',
     global: undefined,
+    island: undefined,
     prefetch: false,
     preload: false
   },
@@ -76,6 +131,7 @@ const expectedComponents = [
     shortPath: 'components/Nuxt3.client.vue',
     export: 'default',
     global: undefined,
+    island: undefined,
     prefetch: false,
     preload: false
   },
@@ -87,6 +143,7 @@ const expectedComponents = [
     shortPath: 'components/Nuxt3.server.vue',
     export: 'default',
     global: undefined,
+    island: undefined,
     prefetch: false,
     preload: false
   },
@@ -98,8 +155,33 @@ const expectedComponents = [
     shortPath: 'components/parent-folder/index.server.vue',
     export: 'default',
     global: undefined,
+    island: undefined,
     prefetch: false,
     preload: false
+  },
+  {
+    chunkName: 'components/some-glob',
+    export: 'default',
+    global: true,
+    island: undefined,
+    kebabName: 'some-glob',
+    mode: 'all',
+    pascalName: 'SomeGlob',
+    prefetch: false,
+    preload: false,
+    shortPath: 'components/some-glob.global.vue'
+  },
+  {
+    chunkName: 'components/some-server',
+    export: 'default',
+    global: undefined,
+    island: true,
+    kebabName: 'some',
+    mode: 'server',
+    pascalName: 'Some',
+    prefetch: false,
+    preload: false,
+    shortPath: 'components/some.island.vue'
   }
 ]
 
diff --git a/packages/schema/src/config/experimental.ts b/packages/schema/src/config/experimental.ts
index c7096ca04a..8d0e86557b 100644
--- a/packages/schema/src/config/experimental.ts
+++ b/packages/schema/src/config/experimental.ts
@@ -95,6 +95,11 @@ export default defineUntypedSchema({
      *
      * @note nginx does not support 103 Early hints in the current version.
      */
-    writeEarlyHints: false
+    writeEarlyHints: false,
+
+    /**
+     * Experimental component islands support with <NuxtIsland> and .island.vue files.
+     */
+    componentIslands: false
   }
 })
diff --git a/packages/schema/src/types/components.ts b/packages/schema/src/types/components.ts
index bce1c330cb..8291547f45 100644
--- a/packages/schema/src/types/components.ts
+++ b/packages/schema/src/types/components.ts
@@ -8,6 +8,7 @@ export interface Component {
   prefetch: boolean
   preload: boolean
   global?: boolean
+  island?: boolean
   mode?: 'client' | 'server' | 'all'
 }
 
@@ -53,12 +54,15 @@ export interface ScanDir {
   isAsync?: boolean
 
   extendComponent?: (component: Component) => Promise<Component | void> | (Component | void)
-
   /**
    * If enabled, registers components to be globally available.
    *
    */
   global?: boolean
+  /**
+   * If enabled, registers components as islands
+   */
+  island?: boolean
 }
 
 export interface ComponentsDir extends ScanDir {
diff --git a/test/basic.test.ts b/test/basic.test.ts
index f43b730538..401edb66b5 100644
--- a/test/basic.test.ts
+++ b/test/basic.test.ts
@@ -1,9 +1,10 @@
 import { fileURLToPath } from 'node:url'
 import { describe, expect, it } from 'vitest'
-import { joinURL } from 'ufo'
+import { joinURL, withQuery } from 'ufo'
 import { isWindows } from 'std-env'
-import { setup, fetch, $fetch, startServer, createPage, url } from '@nuxt/test-utils'
 // eslint-disable-next-line import/order
+import { setup, fetch, $fetch, startServer, createPage, url } from '@nuxt/test-utils'
+import type { NuxtIslandResponse } from '../packages/nuxt/src/core/runtime/nitro/renderer'
 import { expectNoClientErrors, renderPage, withLogs } from './utils'
 
 await setup({
@@ -774,6 +775,94 @@ describe('app config', () => {
   })
 })
 
+describe('component islands', () => {
+  it('renders components with route', async () => {
+    const result: NuxtIslandResponse = await $fetch('/__nuxt_island/RouteComponent?url=/foo')
+
+    if (process.env.NUXT_TEST_DEV) {
+      result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates'))
+    }
+
+    expect(result).toMatchInlineSnapshot(`
+      {
+        "head": {
+          "link": [],
+          "style": [],
+        },
+        "html": "<pre>    Route: /foo
+        </pre>",
+        "state": {},
+      }
+    `)
+  })
+
+  it('renders pure components', async () => {
+    const result: NuxtIslandResponse = await $fetch(withQuery('/__nuxt_island/PureComponent', {
+      props: JSON.stringify({
+        bool: false,
+        number: 3487,
+        str: 'something',
+        obj: { foo: 42, bar: false, me: 'hi' }
+      })
+    }))
+
+    if (process.env.NUXT_TEST_DEV) {
+      result.head.link = result.head.link.filter(l => !l.href.includes('@nuxt+ui-templates'))
+    }
+    result.head.style = result.head.style.map(s => ({
+      ...s,
+      innerHTML: (s.innerHTML || '').replace(/data-v-[a-z0-9]+/, 'data-v-xxxxx'),
+      key: s.key.replace(/-[a-zA-Z0-9]+$/, '')
+    }))
+
+    if (!(process.env.NUXT_TEST_DEV || process.env.TEST_WITH_WEBPACK)) {
+      expect(result.head).toMatchInlineSnapshot(`
+        {
+          "link": [],
+          "style": [
+            {
+              "innerHTML": "pre[data-v-xxxxx]{color:blue}",
+              "key": "island-style",
+            },
+          ],
+        }
+      `)
+    } else if (process.env.NUXT_TEST_DEV) {
+      expect(result.head).toMatchInlineSnapshot(`
+        {
+          "link": [
+            {
+              "href": "/_nuxt/components/islands/PureComponent.vue?vue&type=style&index=0&scoped=c0c0cf89&lang.css",
+              "key": "island-link-gH9jFOYxRw",
+              "rel": "stylesheet",
+            },
+          ],
+          "style": [],
+        }
+      `)
+    }
+
+    expect(result.html.replace(/data-v-\w+|"|<!--.*-->/g, '')).toMatchInlineSnapshot(`
+    "<div > Was router enabled: true <br > Props: <pre >{
+      number: 3487,
+      str: something,
+      obj: {
+        foo: 42,
+        bar: false,
+        me: hi
+      },
+      bool: false
+    }</pre></div>"
+  `)
+
+    expect(result.state).toMatchInlineSnapshot(`
+      {
+        "$shasRouter": true,
+      }
+    `)
+  })
+})
+
 describe.skipIf(process.env.NUXT_TEST_DEV || isWindows)('payload rendering', () => {
   it('renders a payload', async () => {
     const payload = await $fetch('/random/a/_payload.js', { responseType: 'text' })
diff --git a/test/fixtures/basic/components/islands/PureComponent.vue b/test/fixtures/basic/components/islands/PureComponent.vue
new file mode 100644
index 0000000000..61a3941ced
--- /dev/null
+++ b/test/fixtures/basic/components/islands/PureComponent.vue
@@ -0,0 +1,26 @@
+<script setup lang="ts">
+const props = defineProps({
+  bool: Boolean,
+  number: Number,
+  str: String,
+  obj: Object
+})
+
+const hasRouter = useState('hasRouter', () => !!useRouter())
+</script>
+
+<template>
+  <div>
+    Was router enabled: {{ hasRouter }}
+    <br>
+    Props:
+    <!-- eslint-disable-next-line vue/no-v-html -->
+    <pre v-html="JSON.stringify(props, null, 2)" />
+  </div>
+</template>
+
+<style scoped>
+pre {
+  color: blue
+}
+</style>
diff --git a/test/fixtures/basic/components/islands/RouteComponent.vue b/test/fixtures/basic/components/islands/RouteComponent.vue
new file mode 100644
index 0000000000..a5f3defe1a
--- /dev/null
+++ b/test/fixtures/basic/components/islands/RouteComponent.vue
@@ -0,0 +1,5 @@
+<template>
+  <pre>
+    Route: {{ $route.fullPath }}
+  </pre>
+</template>
diff --git a/test/fixtures/basic/nuxt.config.ts b/test/fixtures/basic/nuxt.config.ts
index 5553166e34..70e64e9049 100644
--- a/test/fixtures/basic/nuxt.config.ts
+++ b/test/fixtures/basic/nuxt.config.ts
@@ -104,6 +104,7 @@ export default defineNuxtConfig({
   },
   experimental: {
     inlineSSRStyles: id => !!id && !id.includes('assets.vue'),
+    componentIslands: true,
     reactivityTransform: true,
     treeshakeClientOnly: true,
     payloadExtraction: true
diff --git a/test/fixtures/basic/pages/islands.vue b/test/fixtures/basic/pages/islands.vue
new file mode 100644
index 0000000000..ca229bc8a4
--- /dev/null
+++ b/test/fixtures/basic/pages/islands.vue
@@ -0,0 +1,39 @@
+<script setup lang="ts">
+const islandProps = ref({
+  bool: true,
+  number: 100,
+  str: 'helo world',
+  obj: { json: 'works' }
+})
+
+const routeIslandVisible = ref(false)
+</script>
+
+<template>
+  <div>
+    Pure island component:
+    <div class="box">
+      <NuxtIsland name="PureComponent" :props="islandProps" />
+      <NuxtIsland name="PureComponent" :props="islandProps" />
+    </div>
+    <button @click="islandProps.number++">
+      Increase
+    </button>
+    <hr>
+    Route island component:
+    <div v-if="routeIslandVisible" class="box">
+      <NuxtIsland name="RouteComponent" :context="{ url: '/test' }" />
+    </div>
+    <button v-else @click="routeIslandVisible = true">
+      Show
+    </button>
+  </div>
+</template>
+
+<style scoped>
+.box {
+  border: 1px solid black;
+  margin: 3px;
+  display: flex;
+}
+</style>
diff --git a/test/fixtures/basic/plugins/my-plugin.ts b/test/fixtures/basic/plugins/my-plugin.ts
index 9f59aea022..627d9db911 100644
--- a/test/fixtures/basic/plugins/my-plugin.ts
+++ b/test/fixtures/basic/plugins/my-plugin.ts
@@ -2,7 +2,7 @@ export default defineNuxtPlugin(() => {
   useHead({
     titleTemplate: '%s - Fixture'
   })
-  const path = useRoute().path
+  const path = useRoute()?.path
   return {
     provide: {
       myPlugin: () => 'Injected by my-plugin',