diff --git a/packages/@headlessui-vue/CHANGELOG.md b/packages/@headlessui-vue/CHANGELOG.md
index b54b01f4c7..ffe2b1460a 100644
--- a/packages/@headlessui-vue/CHANGELOG.md
+++ b/packages/@headlessui-vue/CHANGELOG.md
@@ -10,6 +10,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Fixed
 
 - Don't call `<Dialog>`'s `onClose` twice on mobile devices ([#2690](https://github.com/tailwindlabs/headlessui/pull/2690))
+- Fix Portal SSR hydration mismatches ([#2700](https://github.com/tailwindlabs/headlessui/pull/2700))
 
 ## [1.7.16] - 2023-08-17
 
diff --git a/packages/@headlessui-vue/src/components/portal/portal.test.ts b/packages/@headlessui-vue/src/components/portal/portal.test.ts
index 620cf386c3..ccc49534dd 100644
--- a/packages/@headlessui-vue/src/components/portal/portal.test.ts
+++ b/packages/@headlessui-vue/src/components/portal/portal.test.ts
@@ -99,7 +99,7 @@ it('SSR-rendering a Portal should not error', async () => {
   expect(result).toBe(html`<main id="parent"><!----></main>`)
 })
 
-it('should be possible to use a Portal', () => {
+it('should be possible to use a Portal', async () => {
   expect(getPortalRoot()).toBe(null)
 
   renderTemplate(
@@ -112,6 +112,8 @@ it('should be possible to use a Portal', () => {
     `
   )
 
+  await nextTick()
+
   let parent = document.getElementById('parent')
   let content = document.getElementById('content')
 
@@ -125,7 +127,7 @@ it('should be possible to use a Portal', () => {
   expect(content).toHaveTextContent('Contents...')
 })
 
-it('should be possible to use multiple Portal elements', () => {
+it('should be possible to use multiple Portal elements', async () => {
   expect(getPortalRoot()).toBe(null)
 
   renderTemplate(
@@ -142,6 +144,8 @@ it('should be possible to use multiple Portal elements', () => {
     `
   )
 
+  await nextTick()
+
   let parent = document.getElementById('parent')
   let content1 = document.getElementById('content1')
   let content2 = document.getElementById('content2')
@@ -284,6 +288,8 @@ it('should be possible to render multiple portals at the same time', async () =>
     },
   })
 
+  await nextTick()
+
   expect(getPortalRoot()).not.toBe(null)
   expect(getPortalRoot().children).toHaveLength(3)
 
diff --git a/packages/@headlessui-vue/src/components/portal/portal.ts b/packages/@headlessui-vue/src/components/portal/portal.ts
index f82eef33b1..1c667b9cc9 100644
--- a/packages/@headlessui-vue/src/components/portal/portal.ts
+++ b/packages/@headlessui-vue/src/components/portal/portal.ts
@@ -15,6 +15,7 @@ import {
   InjectionKey,
   PropType,
   Ref,
+  watch,
 } from 'vue'
 import { render } from '../../utils/render'
 import { usePortalRoot } from '../../internal/portal-force-root'
@@ -63,6 +64,11 @@ export let Portal = defineComponent({
         : groupContext.resolveTarget()
     )
 
+    let ready = ref(false)
+    onMounted(() => {
+      ready.value = true
+    })
+
     watchEffect(() => {
       if (forcePortalRoot) return
       if (groupContext == null) return
@@ -70,12 +76,18 @@ export let Portal = defineComponent({
     })
 
     let parent = inject(PortalParentContext, null)
-    onMounted(() => {
+
+    // Since the element is mounted lazily (because of SSR hydration)
+    // We use `watch` on `element` + a local var rather than
+    // `onMounted` to ensure registration only happens once
+    let didRegister = false
+    watch(element, () => {
+      if (didRegister) return
+      if (!parent) return
       let domElement = dom(element)
       if (!domElement) return
-      if (!parent) return
-
       onUnmounted(parent.register(domElement))
+      didRegister = true
     })
 
     onUnmounted(() => {
@@ -89,6 +101,7 @@ export let Portal = defineComponent({
     })
 
     return () => {
+      if (!ready.value) return null
       if (myTarget.value === null) return null
 
       let ourProps = {