diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index 41d41ff27..141cf842d 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -1526,6 +1526,9 @@ importers:
       '@types/qunit':
         specifier: ^2.11.1
         version: 2.19.10
+      decorator-transforms:
+        specifier: ^1.0.1
+        version: 1.0.1(@babel/core@7.23.9)
       ember-auto-import:
         specifier: ^2.6.3
         version: 2.7.2(@glint/template@1.3.0)(webpack@5.90.3)
@@ -1662,6 +1665,9 @@ importers:
       ember-cli-4.4:
         specifier: npm:ember-cli@~4.4.0
         version: /ember-cli@4.4.1(lodash@4.17.21)
+      ember-cli-babel-8:
+        specifier: npm:ember-cli-babel@^8.2.0
+        version: /ember-cli-babel@8.2.0(@babel/core@7.23.9)
       ember-cli-beta:
         specifier: npm:ember-cli@beta
         version: /ember-cli@5.2.0-beta.0(lodash@4.17.21)
@@ -2706,7 +2712,6 @@ packages:
     dependencies:
       '@babel/core': 7.23.9(supports-color@8.1.1)
       '@babel/helper-plugin-utils': 7.22.5
-    dev: true
 
   /@babel/plugin-syntax-decorators@7.23.3(@babel/core@7.24.0):
     resolution: {integrity: sha512-cf7Niq4/+/juY67E0PbgH0TDhLQ5J7zS8C/Q5FFx+DWyrRa9sUQdTXkjqKu8zGvuqr7vw1muKiukseihU+PJDA==}
@@ -11293,6 +11298,15 @@ packages:
       mimic-response: 1.0.1
     dev: true
 
+  /decorator-transforms@1.0.1(@babel/core@7.23.9):
+    resolution: {integrity: sha512-ZOaiw4tqiyhtqiMKCNzjS+nGsYPZltToqRAFc5rOUcc4u8d7MTlgelw1qXfL6ieg2l6xZcz6lTZ5M94Ohnk2xA==}
+    dependencies:
+      '@babel/plugin-syntax-decorators': 7.23.3(@babel/core@7.23.9)
+      babel-import-util: 2.0.1
+    transitivePeerDependencies:
+      - '@babel/core'
+    dev: false
+
   /dedent@1.5.1:
     resolution: {integrity: sha512-+LxW+KLWxu3HW3M2w2ympwtqPrqYRzU8fqi6Fhd18fBALe15blJPI/I4+UHveMVG6lJqB4JNd4UG0S5cnVHwIg==}
     peerDependencies:
diff --git a/tests/scenarios/package.json b/tests/scenarios/package.json
index e30a5538e..38108851f 100644
--- a/tests/scenarios/package.json
+++ b/tests/scenarios/package.json
@@ -10,6 +10,7 @@
     "@embroider/test-support": "workspace:*",
     "@embroider/webpack": "workspace:*",
     "@types/qunit": "^2.11.1",
+    "decorator-transforms": "^1.0.1",
     "ember-auto-import": "^2.6.3",
     "fastboot": "^4.1.1",
     "fs-extra": "^10.0.0",
@@ -67,6 +68,7 @@
     "ember-cli-beta": "npm:ember-cli@beta",
     "ember-cli-fastboot": "^4.1.1",
     "ember-cli-latest": "npm:ember-cli@latest",
+    "ember-cli-babel-8": "npm:ember-cli-babel@^8.2.0",
     "ember-composable-helpers": "^4.4.1",
     "ember-data": "~3.28.0",
     "ember-data-4.4": "npm:ember-data@~4.4.0",
diff --git a/tests/scenarios/v2-addon-test.ts b/tests/scenarios/v2-addon-test.ts
index 4c18982cb..f67fe825d 100644
--- a/tests/scenarios/v2-addon-test.ts
+++ b/tests/scenarios/v2-addon-test.ts
@@ -32,9 +32,9 @@ appScenarios
         'example-component.css': '/* not empty */ h1 { color: red }',
       },
       'import-from-npm.js': `
-        export default async function() { 
+        export default async function() {
           let { message } = await import('third-party');
-          return message() 
+          return message()
         }
         `,
     });
diff --git a/tests/scenarios/v2-addon-type-module-test.ts b/tests/scenarios/v2-addon-type-module-test.ts
new file mode 100644
index 000000000..bf7ebe6a2
--- /dev/null
+++ b/tests/scenarios/v2-addon-type-module-test.ts
@@ -0,0 +1,216 @@
+import path from 'path';
+import { appScenarios, baseV2Addon } from './scenarios';
+import { PreparedApp } from 'scenario-tester';
+import QUnit from 'qunit';
+import merge from 'lodash/merge';
+import { pathExistsSync, readJsonSync, readFileSync } from 'fs-extra';
+
+const { module: Qmodule, test } = QUnit;
+
+appScenarios
+  .only('release')
+  .map('v2-addon-as-type-module', async project => {
+    let addon = baseV2Addon();
+    addon.pkg.name = 'v2-addon';
+    addon.pkg.type = 'module';
+    addon.pkg.files = ['dist'];
+    addon.pkg.exports = {
+      './*': './dist/*.js',
+      './addon-main.cjs': './addon-main.cjs',
+      // needed for our "inDependency" function defined in this test
+      './package.json': './package.json',
+    };
+    addon.pkg.scripts = {
+      build: 'node ./node_modules/rollup/dist/bin/rollup -c ./rollup.config.mjs',
+    };
+
+    merge(addon.files, {
+      'babel.config.json': `
+        {
+          "plugins": [
+            ["babel-plugin-ember-template-compilation", {
+              "targetFormat": "hbs",
+              "transforms": []
+            }],
+            ["module:decorator-transforms", { "runtime": { "import": "decorator-transforms/runtime" } }]
+          ]
+        }
+      `,
+      'rollup.config.mjs': `
+      import { Addon } from '@embroider/addon-dev/rollup';
+      import { babel } from '@rollup/plugin-babel';
+
+      const addon = new Addon({
+        srcDir: 'src',
+        destDir: 'dist',
+      });
+
+      export default {
+        output: addon.output(),
+        plugins: [
+          addon.publicEntrypoints(['**/*.js']),
+          addon.appReexports(['components/*.js']),
+          addon.dependencies(),
+          babel({ extensions: ['.js', '.gjs', '.ts', '.gts'], babelHelpers: 'bundled' }),
+          addon.gjs(),
+          addon.hbs(),
+          addon.keepAssets(["**/*.css"]),
+          addon.clean(),
+        ],
+      };
+
+      `,
+      src: {
+        components: {
+          'styles.css': `button { font-weight: bold; color: blue; }`,
+          'demo.gjs': `
+            import Component from '@glimmer/component';
+            import { tracked } from '@glimmer/tracking';
+            import { on } from '@ember/modifier';
+
+            import { importSync, isDevelopingApp, macroCondition } from '@embroider/macros';
+
+            if (macroCondition(isDevelopingApp())) {
+              importSync('./styles.css');
+            }
+
+            export default class ExampleComponent extends Component {
+              @tracked active = false;
+
+              flip = () => (this.active = !this.active);
+
+              <template>
+                Hello there!
+
+                <out>{{this.active}}</out>
+
+                <button {{on 'click' this.flip}}>flip</button>
+              </template>
+            }
+          `,
+        },
+      },
+    });
+
+    addon.linkDependency('@embroider/addon-shim', { baseDir: __dirname });
+    addon.linkDependency('@embroider/addon-dev', { baseDir: __dirname });
+    addon.linkDependency('@babel/runtime', { baseDir: __dirname });
+    addon.linkDevDependency('@babel/core', { baseDir: __dirname });
+    addon.linkDevDependency('@rollup/plugin-babel', { baseDir: __dirname });
+    addon.linkDependency('decorator-transforms', { baseDir: __dirname });
+    addon.linkDevDependency('rollup', { baseDir: __dirname });
+
+    project.addDevDependency(addon);
+    project.linkDevDependency('ember-cli-babel', { baseDir: __dirname, resolveName: 'ember-cli-babel-8' });
+    project.linkDevDependency('@embroider/macros', { baseDir: __dirname });
+
+    merge(project.files, {
+      tests: {
+        // the app is not set up with typescript
+        'the-test.js': `
+          import { click, render } from '@ember/test-helpers';
+          import { hbs } from 'ember-cli-htmlbars';
+          import { module, test } from 'qunit';
+          import { setupRenderingTest } from 'ember-qunit';
+
+          module('v2 addon tests', function (hooks) {
+            setupRenderingTest(hooks);
+
+            test('<Demo />', async function (assert) {
+              await render(hbs\`<Demo />\`);
+
+              assert.dom('out').containsText('false');
+
+              await click('button');
+
+              assert.dom('out').containsText('true');
+            });
+          });
+        `,
+      },
+      'ember-cli-build.js': `
+      'use strict';
+
+      const EmberApp = require('ember-cli/lib/broccoli/ember-app');
+
+      module.exports = function (defaults) {
+        let app = new EmberApp(defaults, {
+        });
+
+        const { compatBuild, recommendedOptions } = require('@embroider/compat');
+
+        const Webpack = require('@embroider/webpack').Webpack;
+        return compatBuild(app, Webpack, {
+          ...recommendedOptions.optimized,
+          skipBabel: [
+            { package: 'qunit' },
+          ],
+        });
+      };
+    `,
+    });
+  })
+  .forEachScenario(scenario => {
+    Qmodule(scenario.name, function (hooks) {
+      let app: PreparedApp;
+
+      hooks.before(async () => {
+        app = await scenario.prepare();
+        let result = await inDependency(app, 'v2-addon').execute('pnpm build');
+        if (result.exitCode !== 0) {
+          throw new Error(result.output);
+        }
+      });
+
+      Qmodule('The addon', function () {
+        test('output directories exist', async function (assert) {
+          let { dir } = inDependency(app, 'v2-addon');
+          assert.strictEqual(pathExistsSync(path.join(dir, 'dist')), true, 'dist/');
+          assert.strictEqual(pathExistsSync(path.join(dir, 'dist', '_app_')), true, 'dist/_app_');
+        });
+
+        test('package.json is modified appropriately', async function (assert) {
+          let { dir } = inDependency(app, 'v2-addon');
+          let reExports = readJsonSync(path.join(dir, 'package.json'))['ember-addon']['app-js'];
+
+          assert.deepEqual(reExports, {
+            './components/demo.js': './dist/_app_/components/demo.js',
+          });
+        });
+
+        test('the addon was built successfully', async function (assert) {
+          let { dir } = inDependency(app, 'v2-addon');
+          let expectedModules = {
+            './dist/_app_/components/demo.js': 'export { default } from "v2-addon/components/demo";\n',
+          };
+
+          assert.strictEqual(
+            Object.keys(readJsonSync(path.join(dir, 'package.json'))['ember-addon']['app-js']).length,
+            Object.keys(expectedModules).length
+          );
+
+          for (let [pathName, moduleContents] of Object.entries(expectedModules)) {
+            let filePath = path.join(dir, pathName);
+            assert.deepEqual(pathExistsSync(filePath), true, `pathExists: ${pathName}`);
+            assert.strictEqual(
+              readFileSync(filePath, { encoding: 'utf8' }),
+              moduleContents,
+              `has correct reexport: ${pathName}`
+            );
+          }
+        });
+      });
+
+      Qmodule('Consuming app', function () {
+        test(`pnpm test`, async function (assert) {
+          let result = await app.execute('pnpm test');
+          assert.equal(result.exitCode, 0, result.output);
+        });
+      });
+    });
+  });
+
+// https://github.com/ef4/scenario-tester/issues/5
+function inDependency(app: PreparedApp, dependencyName: string): PreparedApp {
+  return new PreparedApp(path.dirname(require.resolve(`${dependencyName}/package.json`, { paths: [app.dir] })));
+}
diff --git a/tests/v2-addon-template/addon-main.js b/tests/v2-addon-template/addon-main.cjs
similarity index 100%
rename from tests/v2-addon-template/addon-main.js
rename to tests/v2-addon-template/addon-main.cjs
diff --git a/tests/v2-addon-template/package.json b/tests/v2-addon-template/package.json
index 8fe72de7d..c87ddcc83 100644
--- a/tests/v2-addon-template/package.json
+++ b/tests/v2-addon-template/package.json
@@ -12,7 +12,7 @@
     "type": "addon",
     "version": 2,
     "app-js": {},
-    "main": "addon-main.js"
+    "main": "addon-main.cjs"
   },
   "exports": {
     "./*": "./*"