diff --git a/code/.storybook/vitest.config.ts b/code/.storybook/vitest.config.ts
index 05205f3e762a..4b177f409281 100644
--- a/code/.storybook/vitest.config.ts
+++ b/code/.storybook/vitest.config.ts
@@ -34,20 +34,13 @@ export default mergeConfig(
     ],
     test: {
       name: 'storybook-ui',
-      include: [
-        '../addons/**/*.{story,stories}.?(c|m)[jt]s?(x)',
-        // '../core/template/stories/**/*.{story,stories}.?(c|m)[jt]s?(x)',
-        '../core/src/manager/**/*.{story,stories}.?(c|m)[jt]s?(x)',
-        '../core/src/preview-api/**/*.{story,stories}.?(c|m)[jt]s?(x)',
-        '../core/src/components/{brand,components}/**/*.{story,stories}.?(c|m)[jt]s?(x)',
-      ],
       exclude: [
         ...defaultExclude,
         '../node_modules/**',
         '**/__mockdata__/**',
         '../**/__mockdata__/**',
-        // expected to fail in Vitest because of fetching /iframe.html to cause ECONNREFUSED
-        '**/Zoom.stories.tsx',
+        '**/Zoom.stories.tsx', // expected to fail in Vitest because of fetching /iframe.html to cause ECONNREFUSED
+        '**/lib/blocks/src/**', // won't work because of https://github.com/storybookjs/storybook/issues/29783
       ],
       // TODO: bring this back once portable stories support @storybook/core/preview-api hooks
       // @ts-expect-error this type does not exist but the property does!
diff --git a/code/addons/test/package.json b/code/addons/test/package.json
index 55babe10d98a..9be90b1c5199 100644
--- a/code/addons/test/package.json
+++ b/code/addons/test/package.json
@@ -103,6 +103,7 @@
     "execa": "^8.0.1",
     "find-up": "^7.0.0",
     "formik": "^2.2.9",
+    "glob": "^10.0.0",
     "istanbul-lib-report": "^3.0.1",
     "pathe": "^1.1.2",
     "picocolors": "^1.1.0",
diff --git a/code/addons/test/src/postinstall.ts b/code/addons/test/src/postinstall.ts
index f6772f7691c1..3ea45bd01bf7 100644
--- a/code/addons/test/src/postinstall.ts
+++ b/code/addons/test/src/postinstall.ts
@@ -336,8 +336,6 @@ export default async function postInstall(options: PostinstallOptions) {
     // If there's an existing config, we create a workspace file so we can run Storybook tests alongside.
     const extension = extname(rootConfig);
     const browserWorkspaceFile = resolve(dirname(rootConfig), `vitest.workspace${extension}`);
-    // to be set in vitest config
-    const vitestSetupFilePath = relative(dirname(browserWorkspaceFile), vitestSetupFile);
 
     logger.line(1);
     logger.plain(`${step} Creating a Vitest project workspace file:`);
@@ -355,6 +353,7 @@ export default async function postInstall(options: PostinstallOptions) {
           {
             extends: '${viteConfigFile ? relative(dirname(browserWorkspaceFile), viteConfigFile) : ''}',
             plugins: [
+              // The plugin will run tests for the stories defined in your Storybook config 
               // See options at: https://storybook.js.org/docs/writing-tests/vitest-plugin#storybooktest
               storybookTest({ configDir: '${options.configDir}' }),${vitestInfo.frameworkPluginDocs + vitestInfo.frameworkPluginCall}
             ],
@@ -366,9 +365,7 @@ export default async function postInstall(options: PostinstallOptions) {
                 name: 'chromium',
                 provider: 'playwright',
               },
-              // Make sure to adjust this pattern to match your stories files.
-              include: ['**/*.stories.?(m)[jt]s?(x)'],
-              setupFiles: ['${vitestSetupFilePath}'],
+              setupFiles: ['./.storybook/vitest.setup.ts'],
             },
           },
         ]);
@@ -393,6 +390,7 @@ export default async function postInstall(options: PostinstallOptions) {
         // More info at: https://storybook.js.org/docs/writing-tests/vitest-plugin
         export default defineConfig({
           plugins: [
+            // The plugin will run tests for the stories defined in your Storybook config 
             // See options at: https://storybook.js.org/docs/writing-tests/vitest-plugin#storybooktest
             storybookTest({ configDir: '${options.configDir}' }),${vitestInfo.frameworkPluginDocs + vitestInfo.frameworkPluginCall}
           ],
@@ -404,8 +402,6 @@ export default async function postInstall(options: PostinstallOptions) {
               name: 'chromium',
               provider: 'playwright',
             },
-            // Make sure to adjust this pattern to match your stories files.
-            include: ['**/*.stories.?(m)[jt]s?(x)'],
             setupFiles: ['${vitestSetupFilePath}'],
           },
         });
diff --git a/code/addons/test/src/vitest-plugin/index.ts b/code/addons/test/src/vitest-plugin/index.ts
index b93eed96ddcf..177b2e6ca745 100644
--- a/code/addons/test/src/vitest-plugin/index.ts
+++ b/code/addons/test/src/vitest-plugin/index.ts
@@ -4,12 +4,16 @@ import type { Plugin } from 'vitest/config';
 import {
   getInterpretedFile,
   loadAllPresets,
+  normalizeStories,
   validateConfigurationFiles,
 } from 'storybook/internal/common';
+import { StoryIndexGenerator } from 'storybook/internal/core-server';
 import { readConfig, vitestTransform } from 'storybook/internal/csf-tools';
 import { MainFileMissingError } from 'storybook/internal/server-errors';
-import type { StoriesEntry } from 'storybook/internal/types';
+import type { DocsOptions, StoriesEntry } from 'storybook/internal/types';
 
+// eslint-disable-next-line depend/ban-dependencies
+import { escape } from 'glob';
 import { join, resolve } from 'pathe';
 
 import type { InternalOptions, UserOptions } from './types';
@@ -51,8 +55,6 @@ export const storybookTest = (options?: UserOptions): Plugin => {
   process.env.__STORYBOOK_URL__ = storybookUrl;
   process.env.__STORYBOOK_SCRIPT__ = finalOptions.storybookScript;
 
-  let stories: StoriesEntry[];
-
   if (!finalOptions.configDir) {
     finalOptions.configDir = resolve(join(process.cwd(), '.storybook'));
   } else {
@@ -60,6 +62,8 @@ export const storybookTest = (options?: UserOptions): Plugin => {
   }
 
   let previewLevelTags: string[];
+  let storiesGlobs: StoriesEntry[];
+  let storiesFiles: string[];
 
   return {
     name: 'vite-plugin-storybook-test',
@@ -82,7 +86,27 @@ export const storybookTest = (options?: UserOptions): Plugin => {
         packageJson: {},
       });
 
-      stories = await presets.apply('stories', []);
+      const workingDir = process.cwd();
+      const directories = {
+        configDir,
+        workingDir,
+      };
+      storiesGlobs = await presets.apply('stories');
+      const indexers = await presets.apply('experimental_indexers', []);
+      const docsOptions = await presets.apply<DocsOptions>('docs', {});
+      const normalizedStories = normalizeStories(await storiesGlobs, directories);
+
+      const generator = new StoryIndexGenerator(normalizedStories, {
+        ...directories,
+        indexers: indexers,
+        docs: docsOptions,
+        workingDir,
+      });
+
+      await generator.initialize();
+
+      storiesFiles = generator.storyFileNames();
+
       previewLevelTags = await extractTagsFromPreview(configDir);
 
       const framework = await presets.apply('framework', undefined);
@@ -92,8 +116,19 @@ export const storybookTest = (options?: UserOptions): Plugin => {
       // const isRunningInBrowserMode = config.plugins.find((plugin: Plugin) =>
       //   plugin.name?.startsWith('vitest:browser')
       // )
+
       config.test ??= {};
 
+      config.test.include ??= [];
+      config.test.include.push(
+        // Escape magic characters in paths because they shouldn't be treated as glob patterns
+        // Paths are resolved using `pathe` to convert Windows paths to POSIX paths first
+        ...storiesFiles.map((path) => escape(resolve(path)))
+      );
+
+      config.test.exclude ??= [];
+      config.test.exclude.push('**/*.mdx');
+
       config.test.env ??= {};
       config.test.env = {
         ...config.test.env,
@@ -163,13 +198,13 @@ export const storybookTest = (options?: UserOptions): Plugin => {
         return code;
       }
 
-      if (id.match(/(story|stories)\.[cm]?[jt]sx?$/)) {
+      if (storiesFiles.includes(id)) {
         return vitestTransform({
           code,
           fileName: id,
           configDir: finalOptions.configDir,
           tagsFilter: finalOptions.tags,
-          stories,
+          stories: storiesGlobs,
           previewLevelTags,
         });
       }
diff --git a/code/core/src/core-server/index.ts b/code/core/src/core-server/index.ts
index 4906ddd9b1f5..3163e70875ea 100644
--- a/code/core/src/core-server/index.ts
+++ b/code/core/src/core-server/index.ts
@@ -6,3 +6,4 @@ export * from './build-static';
 export * from './build-dev';
 export * from './withTelemetry';
 export { default as build } from './standalone';
+export { StoryIndexGenerator } from './utils/StoryIndexGenerator';
diff --git a/code/yarn.lock b/code/yarn.lock
index 2be3e8503969..97473ea1d726 100644
--- a/code/yarn.lock
+++ b/code/yarn.lock
@@ -6623,6 +6623,7 @@ __metadata:
     execa: "npm:^8.0.1"
     find-up: "npm:^7.0.0"
     formik: "npm:^2.2.9"
+    glob: "npm:^10.0.0"
     istanbul-lib-report: "npm:^3.0.1"
     pathe: "npm:^1.1.2"
     picocolors: "npm:^1.1.0"
diff --git a/scripts/tasks/sandbox-parts.ts b/scripts/tasks/sandbox-parts.ts
index 27b73c36de4e..920b31857a8b 100644
--- a/scripts/tasks/sandbox-parts.ts
+++ b/scripts/tasks/sandbox-parts.ts
@@ -498,14 +498,11 @@ export async function setupVitest(details: TemplateDetails, options: PassedOptio
           test: {
             name: "storybook",
             pool: "threads",
-            include: [
-              "src/**/*.{story,stories}.?(c|m)[jt]s?(x)",
-              "template-stories/**/*.{story,stories}.?(c|m)[jt]s?(x)",
-            ],
             exclude: [
               ...defaultExclude,
               // TODO: investigate TypeError: Cannot read properties of null (reading 'useContext')
               "**/*argtypes*",
+              ${template.expected.renderer === '@storybook/svelte' ? '"**/*.stories.svelte",' : ''}
             ],
             /**
              * TODO: Either fix or acknowledge limitation of: