diff --git a/.changeset/fifty-melons-film.md b/.changeset/fifty-melons-film.md
new file mode 100644
index 0000000000..a6a8c62621
--- /dev/null
+++ b/.changeset/fifty-melons-film.md
@@ -0,0 +1,5 @@
+---
+'@shopify/cli-hydrogen': patch
+---
+
+Fix CLI upgrade notification when running from a globla process.
diff --git a/.changeset/wet-apricots-fix.md b/.changeset/wet-apricots-fix.md
new file mode 100644
index 0000000000..7424b2b9a5
--- /dev/null
+++ b/.changeset/wet-apricots-fix.md
@@ -0,0 +1,5 @@
+---
+'@shopify/create-hydrogen': major
+---
+
+The code is now bundled to enhance installation speed.
diff --git a/package-lock.json b/package-lock.json
index d51971c1cc..c3463a2abc 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -31359,10 +31359,14 @@
       "version": "4.3.10",
       "license": "MIT",
       "dependencies": {
-        "@shopify/cli-hydrogen": "^8.1.0"
+        "@ast-grep/napi": "0.11.0"
       },
       "bin": {
         "create-hydrogen": "dist/create-app.js"
+      },
+      "devDependencies": {
+        "@shopify/cli-hydrogen": "^8.1.0",
+        "tempy": "3.0.0"
       }
     },
     "packages/hydrogen": {
@@ -39678,7 +39682,9 @@
     "@shopify/create-hydrogen": {
       "version": "file:packages/create-hydrogen",
       "requires": {
-        "@shopify/cli-hydrogen": "^8.1.0"
+        "@ast-grep/napi": "0.11.0",
+        "@shopify/cli-hydrogen": "^8.1.0",
+        "tempy": "3.0.0"
       }
     },
     "@shopify/generate-docs": {
diff --git a/package.json b/package.json
index 7b8057fea2..c3294539cb 100644
--- a/package.json
+++ b/package.json
@@ -10,8 +10,8 @@
     "build:all": "npm run build:pkg && npm run build:templates && npm run build:examples",
     "ci:checks": "turbo run lint test format:check typecheck",
     "dev": "npm run dev:pkg",
-    "dev:pkg": "cross-env LOCAL_DEV=true turbo dev --parallel --filter=./packages/*",
-    "dev:app": "cd templates/skeleton && cross-env LOCAL_DEV=true npm run dev --",
+    "dev:pkg": "turbo dev --parallel --filter=./packages/*",
+    "dev:app": "cd templates/skeleton && npm run dev --",
     "docs:build": "turbo run build-docs",
     "docs:preview": "turbo run preview-docs",
     "lint": "eslint --no-error-on-unmatched-pattern --ext .js,.ts,.jsx,.tsx ./packages",
diff --git a/packages/cli/src/commands/hydrogen/init.test.ts b/packages/cli/src/commands/hydrogen/init.test.ts
index b50459103e..fb20aee113 100644
--- a/packages/cli/src/commands/hydrogen/init.test.ts
+++ b/packages/cli/src/commands/hydrogen/init.test.ts
@@ -5,12 +5,12 @@ import {exec} from '@shopify/cli-kit/node/system';
 import {mockAndCaptureOutput} from '@shopify/cli-kit/node/testing/output';
 import {fileExists, readFile, removeFile} from '@shopify/cli-kit/node/fs';
 import {temporaryDirectory} from 'tempy';
-import {checkHydrogenVersion} from '../../lib/check-version.js';
+import {checkCurrentCLIVersion} from '../../lib/check-cli-version.js';
 import {runCheckRoutes} from './check.js';
 import {runCodegen} from './codegen.js';
 import {setupTemplate} from '../../lib/onboarding/index.js';
 
-vi.mock('../../lib/check-version.js');
+vi.mock('../../lib/check-cli-version.js');
 
 vi.mock('../../lib/onboarding/index.js', async () => {
   const original = await vi.importActual<
@@ -32,21 +32,19 @@ describe('init', () => {
     outputMock.clear();
   });
 
-  it('checks Hydrogen version', async () => {
+  it('checks Hydrogen CLI version', async () => {
     const showUpgradeMock = vi.fn((param?: string) => ({
       currentVersion: '1.0.0',
       newVersion: '1.0.1',
     }));
-    vi.mocked(checkHydrogenVersion).mockResolvedValueOnce(showUpgradeMock);
+    vi.mocked(checkCurrentCLIVersion).mockResolvedValueOnce(showUpgradeMock);
     vi.mocked(setupTemplate).mockResolvedValueOnce(undefined);
 
-    const project = await runInit();
+    const project = await runInit({packageManager: 'pnpm'});
 
     expect(project).toBeFalsy();
-    expect(checkHydrogenVersion).toHaveBeenCalledOnce();
-    expect(showUpgradeMock).toHaveBeenCalledWith(
-      expect.stringContaining('npm create @shopify/hydrogen@latest'),
-    );
+    expect(checkCurrentCLIVersion).toHaveBeenCalledOnce();
+    expect(showUpgradeMock).toHaveBeenCalledWith('pnpm');
   });
 
   it('scaffolds Quickstart project with expected values', async () => {
diff --git a/packages/cli/src/commands/hydrogen/init.ts b/packages/cli/src/commands/hydrogen/init.ts
index 425afa9b6e..c1f0762beb 100644
--- a/packages/cli/src/commands/hydrogen/init.ts
+++ b/packages/cli/src/commands/hydrogen/init.ts
@@ -1,9 +1,4 @@
 import Command from '@shopify/cli-kit/node/base-command';
-import {fileURLToPath} from 'node:url';
-import {
-  packageManager,
-  packageManagerFromUserAgent,
-} from '@shopify/cli-kit/node/node-package-manager';
 import {Flags} from '@oclif/core';
 import {AbortError} from '@shopify/cli-kit/node/error';
 import {
@@ -11,16 +6,11 @@ import {
   parseProcessFlags,
   flagsToCamelObject,
 } from '../../lib/flags.js';
-import {checkHydrogenVersion} from '../../lib/check-version.js';
+import {checkCurrentCLIVersion} from '../../lib/check-cli-version.js';
 import {I18N_CHOICES, type I18nChoice} from '../../lib/setups/i18n/index.js';
-import {execAsync, supressNodeExperimentalWarnings} from '../../lib/process.js';
+import {supressNodeExperimentalWarnings} from '../../lib/process.js';
 import {setupTemplate, type InitOptions} from '../../lib/onboarding/index.js';
 import {LANGUAGES} from '../../lib/onboarding/common.js';
-import {
-  currentProcessIsGlobal,
-  inferPackageManagerForGlobalCLI,
-} from '@shopify/cli-kit/node/is-global';
-import {getPkgJsonPath} from '../../lib/build.js';
 
 const FLAG_MAP = {f: 'force'} as Record<string, string>;
 
@@ -121,36 +111,9 @@ export async function runInit(
     options.shortcut ??= true;
   }
 
-  // Check if we are running the command using the h2 alias
-  const npmPrefix = (await execAsync('npm prefix -s')).stdout.trim();
-  const isH2 = process.argv[1]?.startsWith(npmPrefix);
-
-  // If the current process is global (shopify hydrogen init) we need to check for @shopify/cli version
-  // The process could report to be global when using the h2 alias, so we need to check for that
-  const isGlobal = currentProcessIsGlobal() && !isH2;
-
-  const showUpgrade = await checkHydrogenVersion(
-    // Resolving the CLI package from a local directory might fail because
-    // this code could be run from a global dependency (e.g. on `npm create`).
-    // Therefore, pass the known path to the package.json directly from here:
-    await getPkgJsonPath(),
-    isGlobal ? 'cli' : 'cliHydrogen',
-  );
-
+  const showUpgrade = await checkCurrentCLIVersion();
   if (showUpgrade) {
-    let packageManager =
-      options.packageManager ?? packageManagerFromUserAgent();
-    if (packageManager === 'unknown' || !packageManager) {
-      packageManager = inferPackageManagerForGlobalCLI();
-    }
-    const globalInstallCommand =
-      packageManager === 'yarn'
-        ? `yarn global add @shopify/cli`
-        : `${packageManager} install -g @shopify/cli`;
-    const globalMessage = `Please install the latest Shopify CLI version with \`${globalInstallCommand}\` and try again.`;
-    const localMessage = `Please use the latest version with \`${packageManager} create @shopify/hydrogen@latest\``;
-    const message = isGlobal ? globalMessage : localMessage;
-    showUpgrade(message);
+    showUpgrade(options.packageManager);
   }
 
   return setupTemplate(options);
diff --git a/packages/cli/src/lib/check-cli-version.test.ts b/packages/cli/src/lib/check-cli-version.test.ts
new file mode 100644
index 0000000000..5cabd90fb1
--- /dev/null
+++ b/packages/cli/src/lib/check-cli-version.test.ts
@@ -0,0 +1,125 @@
+import {
+  checkCurrentCLIVersion,
+  UPGRADABLE_CLI_NAMES,
+} from './check-cli-version.js';
+import {afterEach, beforeEach, describe, it, expect, vi} from 'vitest';
+import {mockAndCaptureOutput} from '@shopify/cli-kit/node/testing/output';
+import {
+  checkForNewVersion,
+  findUpAndReadPackageJson,
+} from '@shopify/cli-kit/node/node-package-manager';
+
+vi.mock('@shopify/cli-kit/node/node-package-manager', () => {
+  return {
+    checkForNewVersion: vi.fn(),
+    packageManagerFromUserAgent: vi.fn(() => 'npm'),
+    findUpAndReadPackageJson: vi.fn(() =>
+      Promise.resolve({
+        path: '',
+        content: {
+          name: UPGRADABLE_CLI_NAMES.cliHydrogen,
+          version: '8.0.0',
+        },
+      }),
+    ),
+  };
+});
+
+describe('checkHydrogenVersion()', () => {
+  const outputMock = mockAndCaptureOutput();
+
+  afterEach(() => {
+    vi.restoreAllMocks();
+    outputMock.clear();
+  });
+
+  describe('when a current version is available', () => {
+    it('calls checkForNewVersion', async () => {
+      await checkCurrentCLIVersion();
+
+      expect(checkForNewVersion).toHaveBeenCalledWith(
+        UPGRADABLE_CLI_NAMES.cliHydrogen,
+        expect.stringMatching(/\d{1,2}\.\d{1,2}\.\d{1,2}/),
+      );
+    });
+
+    describe('and it is up to date', () => {
+      beforeEach(() => {
+        vi.mocked(checkForNewVersion).mockResolvedValue(undefined);
+      });
+
+      it('returns undefined', async () => {
+        expect(await checkCurrentCLIVersion()).toBe(undefined);
+      });
+    });
+
+    describe('and it is using @next or @exprimental', () => {
+      it('returns undefined', async () => {
+        vi.mocked(checkForNewVersion).mockResolvedValue('8.0.0');
+        vi.mocked(findUpAndReadPackageJson).mockResolvedValueOnce({
+          path: '',
+          content: {
+            name: UPGRADABLE_CLI_NAMES.cliHydrogen,
+            version: '0.0.0-next-a188915-20230713115118',
+          },
+        });
+
+        expect(await checkCurrentCLIVersion()).toBe(undefined);
+
+        vi.mocked(findUpAndReadPackageJson).mockResolvedValueOnce({
+          path: '',
+          content: {
+            name: UPGRADABLE_CLI_NAMES.cliHydrogen,
+            version: '0.0.0-experimental-a188915-20230713115118',
+          },
+        });
+
+        expect(await checkCurrentCLIVersion()).toBe(undefined);
+      });
+    });
+
+    describe('and a new version is available', () => {
+      beforeEach(() => {
+        vi.mocked(checkForNewVersion).mockResolvedValue('9.0.0');
+      });
+
+      it('returns a function that prints the upgrade', async () => {
+        const showUpgrade = await checkCurrentCLIVersion();
+        expect(showUpgrade).toBeInstanceOf(Function);
+
+        showUpgrade!();
+
+        expect(outputMock.info()).toMatch(
+          / info .+ Upgrade available .+ Version 9.0.0.+ running v8.0.0.+`npm create @shopify\/hydrogen@latest`/is,
+        );
+      });
+
+      it('outputs a message to the user with the new version', async () => {
+        const showUpgrade = await checkCurrentCLIVersion();
+        const {currentVersion, newVersion} = showUpgrade!();
+
+        expect(outputMock.info()).toMatch(
+          new RegExp(
+            ` info .+ Upgrade available .+ Version ${newVersion.replaceAll(
+              '.',
+              '\\.',
+            )}.+ running v${currentVersion.replaceAll('.', '\\.')}`,
+            'is',
+          ),
+        );
+      });
+    });
+  });
+
+  describe('when no current version can be found', () => {
+    beforeEach(() => {
+      vi.mocked(findUpAndReadPackageJson).mockRejectedValue(new Error());
+    });
+
+    it('returns undefined and does not call checkForNewVersion', async () => {
+      expect(await checkCurrentCLIVersion()).toBe(undefined);
+
+      expect(checkForNewVersion).not.toHaveBeenCalled();
+    });
+  });
+});
diff --git a/packages/cli/src/lib/check-cli-version.ts b/packages/cli/src/lib/check-cli-version.ts
new file mode 100644
index 0000000000..ea5d561166
--- /dev/null
+++ b/packages/cli/src/lib/check-cli-version.ts
@@ -0,0 +1,94 @@
+import {fileURLToPath} from 'node:url';
+import {
+  type PackageManager,
+  checkForNewVersion,
+  findUpAndReadPackageJson,
+  packageManagerFromUserAgent,
+} from '@shopify/cli-kit/node/node-package-manager';
+import {renderInfo} from '@shopify/cli-kit/node/ui';
+import {} from '@shopify/cli-kit/node/path';
+import {isHydrogenMonorepo} from './build.js';
+import {inferPackageManagerForGlobalCLI} from '@shopify/cli-kit/node/is-global';
+
+export const UPGRADABLE_CLI_NAMES = {
+  cli: '@shopify/cli',
+  cliHydrogen: '@shopify/cli-hydrogen',
+  createApp: '@shopify/create-hydrogen',
+} as const;
+
+/**
+ * Checks if a new version of the current package is available.
+ * @returns A function to show the update information if any update is available.
+ */
+export async function checkCurrentCLIVersion() {
+  if (isHydrogenMonorepo && !process.env.SHOPIFY_UNIT_TEST) return;
+
+  const {content: pkgJson} = await findUpAndReadPackageJson(
+    fileURLToPath(import.meta.url),
+  ).catch(() => ({content: undefined}));
+
+  const pkgName = pkgJson?.name;
+  const currentVersion = pkgJson?.version;
+
+  if (
+    !pkgName ||
+    !currentVersion ||
+    !Object.values(UPGRADABLE_CLI_NAMES).some((name) => name === pkgName) ||
+    currentVersion.includes('next') ||
+    currentVersion.includes('experimental')
+  ) {
+    return;
+  }
+
+  const newVersionAvailable = await checkForNewVersion(pkgName, currentVersion);
+
+  if (!newVersionAvailable) return;
+
+  const reference = [
+    {
+      link: {
+        label: 'Hydrogen releases',
+        url: 'https://github.com/Shopify/hydrogen/releases',
+      },
+    },
+  ];
+
+  if (pkgName === UPGRADABLE_CLI_NAMES.cli) {
+    reference.push({
+      link: {
+        label: 'Global CLI reference',
+        url: 'https://shopify.dev/docs/api/shopify-cli/',
+      },
+    });
+  }
+
+  return (packageManager?: PackageManager) => {
+    packageManager ??= packageManagerFromUserAgent();
+    if (packageManager === 'unknown' || !packageManager) {
+      packageManager = inferPackageManagerForGlobalCLI();
+    }
+    if (packageManager === 'unknown') {
+      packageManager = 'npm';
+    }
+
+    const installMessage =
+      pkgName === UPGRADABLE_CLI_NAMES.cli
+        ? `Please install the latest Shopify CLI version with \`${
+            packageManager === 'yarn'
+              ? `yarn global add ${UPGRADABLE_CLI_NAMES.cli}`
+              : `${packageManager} install -g ${UPGRADABLE_CLI_NAMES.cli}`
+          }\` and try again.`
+        : `Please use the latest version with \`${packageManager} create @shopify/hydrogen@latest\``;
+
+    renderInfo({
+      headline: 'Upgrade available',
+      body:
+        `Version ${newVersionAvailable} of ${pkgName} is now available.\n` +
+        `You are currently running v${currentVersion}.\n\n` +
+        installMessage,
+      reference,
+    });
+
+    return {currentVersion, newVersion: newVersionAvailable};
+  };
+}
diff --git a/packages/cli/src/lib/check-lockfile.ts b/packages/cli/src/lib/check-lockfile.ts
index ecb41c38b2..a9d167d26e 100644
--- a/packages/cli/src/lib/check-lockfile.ts
+++ b/packages/cli/src/lib/check-lockfile.ts
@@ -4,6 +4,7 @@ import {checkIfIgnoredInGitRepository} from '@shopify/cli-kit/node/git';
 import {renderWarning} from '@shopify/cli-kit/node/ui';
 import {AbortError} from '@shopify/cli-kit/node/error';
 import {packageManagers, type PackageManager} from './package-managers.js';
+import {isHydrogenMonorepo} from './build.js';
 
 function missingLockfileWarning(shouldExit: boolean) {
   const headline = 'No lockfile found';
@@ -73,7 +74,7 @@ export async function checkLockfileStatus(
   directory: string,
   shouldExit = false,
 ) {
-  if (process.env.LOCAL_DEV) return;
+  if (isHydrogenMonorepo && !process.env.SHOPIFY_UNIT_TEST) return;
 
   const foundPackageManagers: PackageManager[] = [];
   for (const packageManager of packageManagers) {
diff --git a/packages/cli/src/lib/check-version.test.ts b/packages/cli/src/lib/check-version.test.ts
deleted file mode 100644
index f8f1f19d5c..0000000000
--- a/packages/cli/src/lib/check-version.test.ts
+++ /dev/null
@@ -1,115 +0,0 @@
-import {checkHydrogenVersion} from './check-version.js';
-import {afterEach, beforeEach, describe, it, expect, vi} from 'vitest';
-import {mockAndCaptureOutput} from '@shopify/cli-kit/node/testing/output';
-import {checkForNewVersion} from '@shopify/cli-kit/node/node-package-manager';
-import {CLI_KIT_VERSION} from '@shopify/cli-kit/common/version';
-
-vi.mock('@shopify/cli-kit/node/node-package-manager', () => {
-  return {
-    checkForNewVersion: vi.fn(),
-  };
-});
-
-const requireMock = vi.fn();
-vi.mock('node:module', async () => {
-  const {createRequire} = await vi.importActual<typeof import('node:module')>(
-    'node:module',
-  );
-
-  return {
-    createRequire: (url: string) => {
-      const actualRequire = createRequire(url);
-      requireMock.mockImplementation((mod: string) => actualRequire(mod));
-      const require = requireMock as unknown as typeof actualRequire;
-      require.resolve = actualRequire.resolve.bind(actualRequire);
-
-      return require;
-    },
-  };
-});
-
-describe('checkHydrogenVersion()', () => {
-  const outputMock = mockAndCaptureOutput();
-
-  afterEach(() => {
-    vi.restoreAllMocks();
-    outputMock.clear();
-  });
-
-  describe('when a current version is available', () => {
-    it('calls checkForNewVersion', async () => {
-      await checkHydrogenVersion('dir');
-
-      expect(checkForNewVersion).toHaveBeenCalledWith(
-        '@shopify/hydrogen',
-        // Calver
-        expect.stringMatching(/20\d{2}\.\d{1,2}\.\d{1,3}/),
-      );
-    });
-
-    describe('and it is up to date', () => {
-      beforeEach(() => {
-        vi.mocked(checkForNewVersion).mockResolvedValue(undefined);
-      });
-
-      it('returns undefined', async () => {
-        expect(await checkHydrogenVersion('dir')).toBe(undefined);
-      });
-    });
-
-    describe('and it is using @next', () => {
-      it('returns undefined', async () => {
-        vi.mocked(checkForNewVersion).mockResolvedValue('2023.1.5');
-        vi.mocked(requireMock).mockReturnValueOnce({
-          version: '0.0.0-next-a188915-20230713115118',
-        });
-
-        expect(await checkHydrogenVersion('dir')).toBe(undefined);
-      });
-    });
-
-    describe('and a new version is available', () => {
-      beforeEach(() => {
-        vi.mocked(checkForNewVersion).mockResolvedValue('2023.1.5');
-      });
-
-      it('returns a function', async () => {
-        expect(await checkHydrogenVersion('dir')).toBeInstanceOf(Function);
-      });
-
-      it('outputs a message to the user with the new version', async () => {
-        const showUpgrade = await checkHydrogenVersion('dir');
-        const {currentVersion, newVersion} = showUpgrade!();
-
-        expect(outputMock.info()).toMatch(
-          new RegExp(
-            ` info .+ Upgrade available .+ Version ${newVersion.replaceAll(
-              '.',
-              '\\.',
-            )}.+ running v${currentVersion.replaceAll('.', '\\.')}`,
-            'is',
-          ),
-        );
-      });
-    });
-  });
-
-  describe('when checking the global cli version', () => {
-    it('uses the CLI_KIT_VERSION', async () => {
-      await checkHydrogenVersion('dir', 'cli');
-
-      expect(checkForNewVersion).toHaveBeenCalledWith(
-        '@shopify/cli',
-        CLI_KIT_VERSION,
-      );
-    });
-  });
-
-  describe('when no current version can be found', () => {
-    it('returns undefined and does not call checkForNewVersion', async () => {
-      expect(await checkHydrogenVersion('/fake-absolute-dir')).toBe(undefined);
-
-      expect(checkForNewVersion).not.toHaveBeenCalled();
-    });
-  });
-});
diff --git a/packages/cli/src/lib/check-version.ts b/packages/cli/src/lib/check-version.ts
deleted file mode 100644
index ddc8cfa449..0000000000
--- a/packages/cli/src/lib/check-version.ts
+++ /dev/null
@@ -1,103 +0,0 @@
-import path from 'node:path';
-import {createRequire} from 'node:module';
-import {checkForNewVersion} from '@shopify/cli-kit/node/node-package-manager';
-import {renderInfo} from '@shopify/cli-kit/node/ui';
-import {CLI_KIT_VERSION} from '@shopify/cli-kit/common/version';
-
-const PACKAGE_NAMES = {
-  main: '@shopify/hydrogen',
-  cliHydrogen: '@shopify/cli-hydrogen',
-  cli: '@shopify/cli',
-} as const;
-
-/**
- *
- * @param resolveFrom Path to a directory to resolve from, or directly the path to a package.json file.
- * @param pkgKey Package to check for updates.
- * @returns A function to show the update information if any update is available.
- */
-export async function checkHydrogenVersion(
-  resolveFrom: string,
-  pkgKey: keyof typeof PACKAGE_NAMES = 'main',
-) {
-  if (process.env.LOCAL_DEV) return;
-  const pkgName = PACKAGE_NAMES[pkgKey];
-
-  let currentVersion: string | undefined;
-  if (pkgName === PACKAGE_NAMES.cli) {
-    currentVersion = CLI_KIT_VERSION;
-  } else {
-    currentVersion = getCurrentVersionFromPackageJson(pkgName, resolveFrom);
-  }
-
-  if (!currentVersion || currentVersion.includes('next')) return;
-
-  const newVersionAvailable = await checkForNewVersion(pkgName, currentVersion);
-
-  if (!newVersionAvailable) return;
-
-  const references = [
-    {
-      link: {
-        label: 'Hydrogen releases',
-        url: 'https://github.com/Shopify/hydrogen/releases',
-      },
-    },
-  ];
-
-  if (pkgName === PACKAGE_NAMES.cli) {
-    references.push({
-      link: {
-        label: 'Global CLI reference',
-        url: 'https://shopify.dev/docs/api/shopify-cli/',
-      },
-    });
-  }
-
-  return (extraMessage = '') => {
-    renderInfo({
-      headline: 'Upgrade available',
-      body:
-        `Version ${newVersionAvailable} of ${pkgName} is now available.\n` +
-        `You are currently running v${currentVersion}.` +
-        (extraMessage ? '\n\n' : '') +
-        extraMessage,
-      reference: references,
-    });
-
-    return {currentVersion, newVersion: newVersionAvailable};
-  };
-}
-
-function getCurrentVersionFromPackageJson(
-  pkgName: string,
-  resolveFrom: string,
-) {
-  const require = createRequire(import.meta.url);
-  const pkgJsonPath = resolveFrom.endsWith('package.json')
-    ? locateDependency(require, resolveFrom)
-    : locateDependency(
-        require,
-        path.join(pkgName, 'package.json'),
-        resolveFrom,
-      );
-
-  if (!pkgJsonPath) return;
-
-  const currentVersion = require(pkgJsonPath).version as string;
-  return currentVersion;
-}
-
-function locateDependency(
-  require: NodeRequire,
-  nameToResolve: string,
-  resolveFrom?: string,
-) {
-  try {
-    return require.resolve(nameToResolve, {
-      paths: [resolveFrom ?? process.cwd()],
-    });
-  } catch {
-    return;
-  }
-}
diff --git a/packages/cli/src/lib/template-downloader.ts b/packages/cli/src/lib/template-downloader.ts
index 934d1f217c..2c529302cb 100644
--- a/packages/cli/src/lib/template-downloader.ts
+++ b/packages/cli/src/lib/template-downloader.ts
@@ -8,7 +8,11 @@ import {parseGitHubRepositoryURL} from '@shopify/cli-kit/node/github';
 import {mkdir, fileExists, rmdir} from '@shopify/cli-kit/node/fs';
 import {AbortError} from '@shopify/cli-kit/node/error';
 import {AbortSignal} from '@shopify/cli-kit/node/abort';
-import {getAssetsDir, getSkeletonSourceDir} from './build.js';
+import {
+  getAssetsDir,
+  getSkeletonSourceDir,
+  isHydrogenMonorepo,
+} from './build.js';
 import {joinPath} from '@shopify/cli-kit/node/path';
 import {downloadGitRepository} from '@shopify/cli-kit/node/git';
 
@@ -78,7 +82,7 @@ async function downloadMonorepoTarball(
 export async function downloadMonorepoTemplates({
   signal,
 }: {signal?: AbortSignal} = {}) {
-  if (process.env.LOCAL_DEV) {
+  if (isHydrogenMonorepo && process.env.FORCE_TEMPLATES_SOURCE !== 'remote') {
     const templatesDir = path.dirname(getSkeletonSourceDir());
     return {
       version: 'local',
diff --git a/packages/create-hydrogen/integration.test.ts b/packages/create-hydrogen/integration.test.ts
new file mode 100644
index 0000000000..a893d3005d
--- /dev/null
+++ b/packages/create-hydrogen/integration.test.ts
@@ -0,0 +1,69 @@
+import path from 'node:path';
+import fs from 'node:fs/promises';
+import {createRequire} from 'node:module';
+import {execa} from 'execa';
+import {temporaryDirectoryTask} from 'tempy';
+import {describe, it, expect} from 'vitest';
+
+describe('create-hydrogen', () => {
+  it('creates a quickstart project using the compiled files', async () => {
+    const packageJson = createRequire(import.meta.url)('./package.json');
+    const bin = path.resolve(packageJson.bin);
+
+    expect(bin).toMatch(/\bdist\/.*\.m?js$/);
+
+    await expect(
+      fs.stat(bin).catch(() => false),
+      `It looks like there are no compiled files for create-hydrogen in ${bin}.` +
+        `Please build the project before running the tests`,
+    ).resolves.toBeTruthy();
+
+    await temporaryDirectoryTask(async (tmpDir) => {
+      const processPromise = execa('node', [
+        bin,
+        '--quickstart',
+        '--no-install-deps',
+        '--no-shortcut',
+        '--path',
+        tmpDir,
+      ]);
+
+      await expect(processPromise, 'create-app process').resolves.toBeTruthy();
+
+      await expect(
+        fs.stat(path.resolve(tmpDir, 'package.json')).catch(() => false),
+      ).resolves.toBeTruthy();
+
+      // Replace the temporary directory with a placeholder to avoid snapshot noise.
+      // The directory can wrap to a new line, so we can't use a simple string replace.
+      const output = (await processPromise).stdout
+        .replace(/^.*╭/ims, '╭')
+        .replace(/Run `.*$/s, 'Run `<redacted-command-for-test>`');
+
+      expect(output).toMatchInlineSnapshot(`
+        "╭─ success ────────────────────────────────────────────────────────────────────╮
+        │                                                                              │
+        │  Storefront setup complete!                                                  │
+        │                                                                              │
+        │    Shopify:   Mock.shop                                                      │
+        │    Language:  JavaScript                                                     │
+        │    Routes:                                                                   │
+        │      • Home (/ & /:catchAll)                                                 │
+        │      • Page (/pages/:handle)                                                 │
+        │      • Cart (/cart/* & /discount/*)                                          │
+        │      • Products (/products/:handle)                                          │
+        │      • Collections (/collections/*)                                          │
+        │      • Policies (/policies & /policies/:handle)                              │
+        │      • Blogs (/blogs/*)                                                      │
+        │      • Account (/account/*)                                                  │
+        │      • Search (/api/predictive-search & /search)                             │
+        │      • Robots (/robots.txt)                                                  │
+        │      • Sitemap (/sitemap.xml)                                                │
+        │                                                                              │
+        │  Next steps                                                                  │
+        │                                                                              │
+        │    • Run \`<redacted-command-for-test>\`"
+      `);
+    });
+  });
+});
diff --git a/packages/create-hydrogen/package.json b/packages/create-hydrogen/package.json
index f7951967ab..27771090ec 100644
--- a/packages/create-hydrogen/package.json
+++ b/packages/create-hydrogen/package.json
@@ -9,11 +9,16 @@
   "type": "module",
   "scripts": {
     "build": "tsup --clean",
-    "dev": "tsup --watch",
+    "dev": "tsup --watch src --watch ../cli/src",
+    "test": "vitest run --test-timeout=60000",
     "typecheck": "tsc --noEmit"
   },
   "dependencies": {
-    "@shopify/cli-hydrogen": "^8.1.0"
+    "@ast-grep/napi": "0.11.0"
+  },
+  "devDependencies": {
+    "@shopify/cli-hydrogen": "^8.1.0",
+    "tempy": "3.0.0"
   },
   "bin": "dist/create-app.js",
   "files": [
diff --git a/packages/create-hydrogen/tsconfig.json b/packages/create-hydrogen/tsconfig.json
index dcb7ad5398..c4bbacee81 100644
--- a/packages/create-hydrogen/tsconfig.json
+++ b/packages/create-hydrogen/tsconfig.json
@@ -1,12 +1,18 @@
 {
   "extends": "../../tsconfig.json",
-  "include": ["src"],
+  "include": ["src", "*.test.ts"],
   "exclude": ["dist", "__tests__", "node_modules", ".turbo"],
   "compilerOptions": {
+    "target": "ES2022",
     "module": "NodeNext",
     "moduleResolution": "NodeNext",
-    "rootDir": "src",
     "noUncheckedIndexedAccess": true,
-    "outDir": "dist"
+    "outDir": "dist",
+    "types": ["node"],
+    "paths": {
+      // Ensure we use the source code of the CLI,
+      // not the compiled version from `dist`.
+      "@shopify/cli-hydrogen/*": ["../cli/src/*"]
+    }
   }
 }
diff --git a/packages/create-hydrogen/tsup.config.ts b/packages/create-hydrogen/tsup.config.ts
index f18defe787..e5e9fbd023 100644
--- a/packages/create-hydrogen/tsup.config.ts
+++ b/packages/create-hydrogen/tsup.config.ts
@@ -1,13 +1,37 @@
+import {createRequire} from 'node:module';
+import fs from 'node:fs/promises';
 import {defineConfig} from 'tsup';
 
 export default defineConfig({
-  entry: ['src/**/*.ts'],
+  entry: ['src/create-app.ts'],
   outDir: 'dist',
   format: 'esm',
-  minify: false,
-  bundle: false,
-  splitting: true,
-  treeshake: true,
+  clean: true,
   sourcemap: false,
   dts: false,
+  minify: true,
+  splitting: true, // Async/await breaks without splitting
+
+  // -- Bundle:
+  bundle: true,
+  external: [
+    '@ast-grep/napi', // Required binary
+    '@parcel/watcher', // Not used but but needs to resolve it
+    'react-devtools-core', // Not used but breaks the build otherwise
+  ],
+  // Needed for some CJS dependencies:
+  shims: true,
+  banner: {
+    js: "import { createRequire as __createRequire } from 'module';globalThis.require = __createRequire(import.meta.url);",
+  },
+  async onSuccess() {
+    // Copy assets to the dist folder
+    await fs.cp('../cli/dist/assets', './dist/assets', {recursive: true});
+
+    // This WASM file is used in a dependency, copy it over:
+    await fs.copyFile(
+      createRequire(import.meta.url).resolve('yoga-wasm-web/dist/yoga.wasm'),
+      './dist/yoga.wasm',
+    );
+  },
 });
diff --git a/turbo.json b/turbo.json
index bed6c8ffa6..f2e4471794 100644
--- a/turbo.json
+++ b/turbo.json
@@ -39,6 +39,9 @@
     "@shopify/create-hydrogen#build": {
       "dependsOn": ["@shopify/cli-hydrogen#build"]
     },
+    "@shopify/create-hydrogen#test": {
+      "dependsOn": ["@shopify/create-hydrogen#build"]
+    },
     "@shopify/remix-oxygen#build": {
       "dependsOn": ["@shopify/hydrogen#build"]
     },