diff --git a/extensions/vscode/package.json b/extensions/vscode/package.json
index 1eacc9c7ff..520dd3112a 100644
--- a/extensions/vscode/package.json
+++ b/extensions/vscode/package.json
@@ -464,7 +464,7 @@
 		"@volar/typescript": "2.4.26",
 		"@volar/vscode": "2.4.26",
 		"@vscode/vsce": "^3.2.1",
-		"@vue/compiler-sfc": "^3.5.0",
+		"@vue/compiler-sfc": "^3.5.24",
 		"@vue/language-core": "3.1.5",
 		"@vue/language-server": "3.1.5",
 		"@vue/typescript-plugin": "3.1.5",
diff --git a/packages/language-core/index.ts b/packages/language-core/index.ts
index 18e6669d15..1892253be4 100644
--- a/packages/language-core/index.ts
+++ b/packages/language-core/index.ts
@@ -4,6 +4,7 @@ export * from './lib/compilerOptions';
 export * from './lib/languagePlugin';
 export * from './lib/parsers/scriptSetupRanges';
 export * from './lib/plugins';
+export * from './lib/template/compile';
 export * from './lib/types';
 export * from './lib/utils/collectBindings';
 export * from './lib/utils/forEachTemplateNode';
diff --git a/packages/language-core/lib/codegen/template/element.ts b/packages/language-core/lib/codegen/template/element.ts
index e0c57f02f0..caa2278bd0 100644
--- a/packages/language-core/lib/codegen/template/element.ts
+++ b/packages/language-core/lib/codegen/template/element.ts
@@ -350,6 +350,38 @@ export function* generateElement(
 	ctx.currentComponent = currentComponent;
 }
 
+export function* generateFragment(
+	options: TemplateCodegenOptions,
+	ctx: TemplateCodegenContext,
+	node: CompilerDOM.ElementNode,
+): Generator<Code> {
+	const [startTagOffset] = getElementTagOffsets(node, options.template);
+
+	// special case for <template v-for="..." :key="..." />
+	if (node.props.length) {
+		yield `__VLS_asFunctionalElement(__VLS_intrinsics.template)(`;
+		const token = yield* startBoundary('template', startTagOffset, codeFeatures.verification);
+		yield `{${newLine}`;
+		yield* generateElementProps(
+			options,
+			ctx,
+			node,
+			node.props,
+			options.vueCompilerOptions.checkUnknownProps,
+		);
+		yield `}`;
+		yield endBoundary(token, startTagOffset + node.tag.length);
+		yield `)${endOfLine}`;
+	}
+
+	const { currentComponent } = ctx;
+	ctx.currentComponent = undefined;
+	for (const child of node.children) {
+		yield* generateTemplateChild(options, ctx, child);
+	}
+	ctx.currentComponent = currentComponent;
+}
+
 function* generateFailedPropExps(
 	options: TemplateCodegenOptions,
 	ctx: TemplateCodegenContext,
diff --git a/packages/language-core/lib/codegen/template/elementProps.ts b/packages/language-core/lib/codegen/template/elementProps.ts
index bc47d2eae0..0609620b9e 100644
--- a/packages/language-core/lib/codegen/template/elementProps.ts
+++ b/packages/language-core/lib/codegen/template/elementProps.ts
@@ -110,7 +110,7 @@ export function* generateElementProps(
 			}
 
 			const shouldSpread = propName === 'style' || propName === 'class';
-			const shouldCamelize = isComponent && getShouldCamelize(options, prop, propName);
+			const shouldCamelize = getShouldCamelize(options, node, prop, propName);
 			const features = getPropsCodeFeatures(strictPropsCheck);
 
 			if (shouldSpread) {
@@ -167,7 +167,7 @@ export function* generateElementProps(
 			}
 
 			const shouldSpread = prop.name === 'style' || prop.name === 'class';
-			const shouldCamelize = isComponent && getShouldCamelize(options, prop, prop.name);
+			const shouldCamelize = getShouldCamelize(options, node, prop, prop.name);
 			const features = getPropsCodeFeatures(strictPropsCheck);
 
 			if (shouldSpread) {
@@ -288,13 +288,16 @@ function* generateAttrValue(
 
 function getShouldCamelize(
 	options: TemplateCodegenOptions,
+	node: CompilerDOM.ElementNode,
 	prop: CompilerDOM.AttributeNode | CompilerDOM.DirectiveNode,
 	propName: string,
 ) {
 	return (
+		node.tagType === CompilerDOM.ElementTypes.COMPONENT
+		|| node.tagType === CompilerDOM.ElementTypes.SLOT
+	) && (
 		prop.type !== CompilerDOM.NodeTypes.DIRECTIVE
-		|| !prop.arg
-		|| (prop.arg.type === CompilerDOM.NodeTypes.SIMPLE_EXPRESSION && prop.arg.isStatic)
+		|| prop.arg?.type === CompilerDOM.NodeTypes.SIMPLE_EXPRESSION && prop.arg.isStatic
 	)
 		&& hyphenateAttr(propName) === propName
 		&& !options.vueCompilerOptions.htmlAttributes.some(pattern => isMatch(propName, pattern));
diff --git a/packages/language-core/lib/codegen/template/templateChild.ts b/packages/language-core/lib/codegen/template/templateChild.ts
index ded28342b5..3915d204a3 100644
--- a/packages/language-core/lib/codegen/template/templateChild.ts
+++ b/packages/language-core/lib/codegen/template/templateChild.ts
@@ -4,7 +4,7 @@ import { hyphenateTag } from '../../utils/shared';
 import { codeFeatures } from '../codeFeatures';
 import { endOfLine } from '../utils';
 import type { TemplateCodegenContext } from './context';
-import { generateComponent, generateElement } from './element';
+import { generateComponent, generateElement, generateFragment } from './element';
 import type { TemplateCodegenOptions } from './index';
 import { generateInterpolation } from './interpolation';
 import { generateSlotOutlet } from './slotOutlet';
@@ -17,16 +17,12 @@ export function* generateTemplateChild(
 	ctx: TemplateCodegenContext,
 	node: CompilerDOM.RootNode | CompilerDOM.TemplateChildNode | CompilerDOM.SimpleExpressionNode,
 	enterNode = true,
+	isVForChild = false,
 ): Generator<Code> {
 	if (enterNode && !ctx.enter(node)) {
 		return;
 	}
 
-	const cur = node as CompilerDOM.ElementNode | CompilerDOM.IfNode | CompilerDOM.ForNode;
-	if (cur.codegenNode?.type === CompilerDOM.NodeTypes.JS_CACHE_EXPRESSION) {
-		cur.codegenNode = cur.codegenNode.value as any;
-	}
-
 	if (node.type === CompilerDOM.NodeTypes.ROOT) {
 		for (const item of collectSingleRootNodes(options, node.children)) {
 			ctx.singleRootNodes.add(item);
@@ -40,33 +36,23 @@ export function* generateTemplateChild(
 			yield* generateSlotOutlet(options, ctx, node);
 		}
 		else {
-			const slotDir = node.props.find(p => p.type === CompilerDOM.NodeTypes.DIRECTIVE && p.name === 'slot') as
-				| CompilerDOM.DirectiveNode
-				| undefined;
-			if (
-				node.tagType === CompilerDOM.ElementTypes.TEMPLATE
-				&& ctx.currentComponent
-				&& slotDir
-			) {
+			const slotDir = node.props.find(CompilerDOM.isVSlot);
+			if (node.tagType === CompilerDOM.ElementTypes.TEMPLATE && ctx.currentComponent && slotDir) {
 				yield* generateVSlot(options, ctx, node, slotDir);
 			}
-			else if (
-				node.tagType === CompilerDOM.ElementTypes.ELEMENT
-				|| node.tagType === CompilerDOM.ElementTypes.TEMPLATE
-			) {
-				yield* generateElement(options, ctx, node);
+			else if (node.tagType === CompilerDOM.ElementTypes.TEMPLATE && isVForChild) {
+				yield* generateFragment(options, ctx, node);
 			}
-			else {
+			else if (node.tagType === CompilerDOM.ElementTypes.COMPONENT) {
 				const { currentComponent } = ctx;
 				yield* generateComponent(options, ctx, node);
 				ctx.currentComponent = currentComponent;
 			}
+			else {
+				yield* generateElement(options, ctx, node);
+			}
 		}
 	}
-	else if (node.type === CompilerDOM.NodeTypes.TEXT_CALL) {
-		// {{ var }}
-		yield* generateTemplateChild(options, ctx, node.content, false);
-	}
 	else if (node.type === CompilerDOM.NodeTypes.COMPOUND_EXPRESSION) {
 		// {{ ... }} {{ ... }}
 		for (const child of node.children) {
@@ -98,9 +84,6 @@ export function* generateTemplateChild(
 		// v-for
 		yield* generateVFor(options, ctx, node);
 	}
-	else if (node.type === CompilerDOM.NodeTypes.TEXT) {
-		// not needed progress
-	}
 
 	if (enterNode) {
 		yield* ctx.exit();
diff --git a/packages/language-core/lib/codegen/template/vFor.ts b/packages/language-core/lib/codegen/template/vFor.ts
index 4b9c72ebfa..0db702de61 100644
--- a/packages/language-core/lib/codegen/template/vFor.ts
+++ b/packages/language-core/lib/codegen/template/vFor.ts
@@ -2,7 +2,7 @@ import * as CompilerDOM from '@vue/compiler-dom';
 import type { Code } from '../../types';
 import { collectBindingNames } from '../../utils/collectBindings';
 import { codeFeatures } from '../codeFeatures';
-import { endOfLine, getTypeScriptAST, newLine } from '../utils';
+import { getTypeScriptAST, newLine } from '../utils';
 import type { TemplateCodegenContext } from './context';
 import type { TemplateCodegenOptions } from './index';
 import { generateInterpolation } from './interpolation';
@@ -48,42 +48,10 @@ export function* generateVFor(
 	}
 	yield `) {${newLine}`;
 
-	let isFragment = true;
-	for (const argument of node.codegenNode?.children.arguments ?? []) {
-		if (
-			argument.type === CompilerDOM.NodeTypes.JS_FUNCTION_EXPRESSION
-			&& argument.returns?.type === CompilerDOM.NodeTypes.VNODE_CALL
-			&& argument.returns.props?.type === CompilerDOM.NodeTypes.JS_OBJECT_EXPRESSION
-		) {
-			if (argument.returns.tag !== CompilerDOM.FRAGMENT) {
-				isFragment = false;
-				continue;
-			}
-			for (const prop of argument.returns.props.properties) {
-				if (
-					prop.value.type === CompilerDOM.NodeTypes.SIMPLE_EXPRESSION
-					&& !prop.value.isStatic
-				) {
-					yield* generateInterpolation(
-						options,
-						ctx,
-						options.template,
-						codeFeatures.all,
-						prop.value.content,
-						prop.value.loc.start.offset,
-						`(`,
-						`)`,
-					);
-					yield endOfLine;
-				}
-			}
-		}
-	}
-
 	const { inVFor } = ctx;
 	ctx.inVFor = true;
 	for (const child of node.children) {
-		yield* generateTemplateChild(options, ctx, child, isFragment);
+		yield* generateTemplateChild(options, ctx, child, false, true);
 	}
 	ctx.inVFor = inVFor;
 
diff --git a/packages/language-core/lib/codegen/template/vIf.ts b/packages/language-core/lib/codegen/template/vIf.ts
index 9270113534..6b2f5ccdd4 100644
--- a/packages/language-core/lib/codegen/template/vIf.ts
+++ b/packages/language-core/lib/codegen/template/vIf.ts
@@ -14,10 +14,6 @@ export function* generateVIf(
 	node: CompilerDOM.IfNode,
 ): Generator<Code> {
 	const originalBlockConditionsLength = ctx.blockConditions.length;
-	const isFragment = node.codegenNode
-		&& 'consequent' in node.codegenNode
-		&& 'tag' in node.codegenNode.consequent
-		&& node.codegenNode.consequent.tag === CompilerDOM.FRAGMENT;
 
 	for (let i = 0; i < node.branches.length; i++) {
 		const branch = node.branches[i]!;
@@ -53,7 +49,7 @@ export function* generateVIf(
 
 		yield `{${newLine}`;
 		for (const child of branch.children) {
-			yield* generateTemplateChild(options, ctx, child, i !== 0 || isFragment);
+			yield* generateTemplateChild(options, ctx, child, i !== 0, true);
 		}
 		yield `}${newLine}`;
 
diff --git a/packages/language-core/lib/languagePlugin.ts b/packages/language-core/lib/languagePlugin.ts
index c2b8d805b3..7277504e0d 100644
--- a/packages/language-core/lib/languagePlugin.ts
+++ b/packages/language-core/lib/languagePlugin.ts
@@ -3,6 +3,7 @@
 import { forEachEmbeddedCode, type LanguagePlugin } from '@volar/language-core';
 import * as CompilerDOM from '@vue/compiler-dom';
 import type * as ts from 'typescript';
+import * as LanguageCore from '../index';
 import { createPlugins } from './plugins';
 import type { VueCompilerOptions, VueLanguagePlugin, VueLanguagePluginReturn } from './types';
 import { VueVirtualCode } from './virtualCode';
@@ -39,6 +40,7 @@ export function createVueLanguagePlugin<T>(
 	const pluginContext: Parameters<VueLanguagePlugin>[0] = {
 		modules: {
 			'@vue/compiler-dom': CompilerDOM,
+			'@vue/language-core': LanguageCore,
 			typescript: ts,
 		},
 		compilerOptions,
diff --git a/packages/language-core/lib/plugins/vue-template-html.ts b/packages/language-core/lib/plugins/vue-template-html.ts
index f4d8ac3bbf..f9506a0610 100644
--- a/packages/language-core/lib/plugins/vue-template-html.ts
+++ b/packages/language-core/lib/plugins/vue-template-html.ts
@@ -1,4 +1,5 @@
-import type * as CompilerDOM from '@vue/compiler-dom';
+import * as CompilerDOM from '@vue/compiler-dom';
+import { compileTemplate } from '../template/compile';
 import type { VueLanguagePlugin } from '../types';
 
 interface Loc {
@@ -15,9 +16,7 @@ type Node =
 
 const shouldAddSuffix = /(?<=<[^>/]+)$/;
 
-const plugin: VueLanguagePlugin = ({ modules }) => {
-	const CompilerDOM = modules['@vue/compiler-dom'];
-
+const plugin: VueLanguagePlugin = () => {
 	return {
 		version: 2.2,
 
@@ -31,11 +30,7 @@ const plugin: VueLanguagePlugin = ({ modules }) => {
 					addedSuffix = true;
 				}
 
-				const ast = CompilerDOM.parse(template, {
-					...options,
-					comments: true,
-				});
-				CompilerDOM.transform(ast, options);
+				const ast = compileTemplate(template, options);
 
 				return {
 					ast,
@@ -122,11 +117,6 @@ const plugin: VueLanguagePlugin = ({ modules }) => {
 							return false;
 						}
 					}
-					else if (node.type === CompilerDOM.NodeTypes.TEXT_CALL) {
-						if (!tryUpdateNode(node.content)) {
-							return false;
-						}
-					}
 					else if (node.type === CompilerDOM.NodeTypes.COMPOUND_EXPRESSION) {
 						for (const childNode of node.children) {
 							if (typeof childNode === 'object') {
diff --git a/packages/language-core/lib/plugins/vue-template-inline-ts.ts b/packages/language-core/lib/plugins/vue-template-inline-ts.ts
index db269186c3..cf717ec8bc 100644
--- a/packages/language-core/lib/plugins/vue-template-inline-ts.ts
+++ b/packages/language-core/lib/plugins/vue-template-inline-ts.ts
@@ -197,10 +197,6 @@ const plugin: VueLanguagePlugin = ({ modules: { typescript: ts } }) => {
 					visit(child);
 				}
 			}
-			else if (node.type === CompilerDOM.NodeTypes.TEXT_CALL) {
-				// {{ var }}
-				visit(node.content);
-			}
 			else if (node.type === CompilerDOM.NodeTypes.COMPOUND_EXPRESSION) {
 				// {{ ... }} {{ ... }}
 				for (const childNode of node.children) {
diff --git a/packages/language-core/lib/template/compile.ts b/packages/language-core/lib/template/compile.ts
new file mode 100644
index 0000000000..8635f2ad61
--- /dev/null
+++ b/packages/language-core/lib/template/compile.ts
@@ -0,0 +1,29 @@
+import { type CompilerOptions, getBaseTransformPreset, parse, transform } from '@vue/compiler-dom';
+import { transformElement } from './transforms/transformElement';
+import { transformText } from './transforms/transformText';
+import { transformFor } from './transforms/vFor';
+import { transformIf } from './transforms/vIf';
+
+export function compileTemplate(source: string, options: CompilerOptions) {
+	const [nodeTransforms, directiveTransforms] = getBaseTransformPreset();
+	const resolvedOptions: CompilerOptions = {
+		...options,
+		comments: true,
+		nodeTransforms: [
+			nodeTransforms[0]!, // transformVBindShorthand
+			transformIf,
+			transformFor,
+			transformElement,
+			transformText,
+			...options.nodeTransforms || [],
+		],
+		directiveTransforms: {
+			...directiveTransforms,
+			...options.directiveTransforms,
+		},
+	};
+
+	const ast = parse(source, resolvedOptions);
+	transform(ast, resolvedOptions);
+	return ast;
+}
diff --git a/packages/language-core/lib/template/transforms/transformElement.ts b/packages/language-core/lib/template/transforms/transformElement.ts
new file mode 100644
index 0000000000..90f6f25d12
--- /dev/null
+++ b/packages/language-core/lib/template/transforms/transformElement.ts
@@ -0,0 +1,137 @@
+import {
+	createCompilerError,
+	type DirectiveNode,
+	ElementTypes,
+	ErrorCodes,
+	findDir,
+	isStaticExp,
+	isTemplateNode,
+	type NodeTransform,
+	NodeTypes,
+	type TemplateChildNode,
+} from '@vue/compiler-dom';
+import { isBuiltInDirective } from '@vue/shared';
+
+export const transformElement: NodeTransform = (node, context) => {
+	return () => {
+		if (node.type !== NodeTypes.ELEMENT || node.tagType === ElementTypes.TEMPLATE) {
+			return;
+		}
+
+		const isComponent = node.tagType === ElementTypes.COMPONENT;
+		const isSlotOutlet = node.tagType === ElementTypes.SLOT;
+
+		for (const prop of node.props) {
+			if (prop.type !== NodeTypes.DIRECTIVE) {
+				continue;
+			}
+
+			if (prop.name === 'slot') {
+				if (!isComponent) {
+					context.onError(
+						createCompilerError(ErrorCodes.X_V_SLOT_MISPLACED, prop.loc),
+					);
+				}
+				continue;
+			}
+
+			const isVBind = prop.name === 'bind';
+			const isVOn = prop.name === 'on';
+
+			if (!prop.arg && (isVBind || isVOn)) {
+				if (!prop.exp) {
+					context.onError(
+						createCompilerError(
+							isVBind
+								? ErrorCodes.X_V_BIND_NO_EXPRESSION
+								: ErrorCodes.X_V_ON_NO_EXPRESSION,
+							prop.loc,
+						),
+					);
+				}
+				continue;
+			}
+
+			const runtimeDirectives: DirectiveNode[] = [];
+			const directiveTransform = context.directiveTransforms[prop.name];
+			if (directiveTransform) {
+				const { needRuntime } = directiveTransform(prop, node, context);
+				if (needRuntime) {
+					runtimeDirectives.push(prop);
+				}
+			}
+			else if (!isBuiltInDirective(prop.name)) {
+				runtimeDirectives.push(prop);
+			}
+
+			if (isSlotOutlet && runtimeDirectives.length) {
+				context.onError(
+					createCompilerError(ErrorCodes.X_V_SLOT_UNEXPECTED_DIRECTIVE_ON_SLOT_OUTLET, prop.loc),
+				);
+			}
+		}
+
+		if (isComponent) {
+			let hasTemplateSlots = false;
+			let hasNamedDefaultSlot = false;
+			const implicitDefaultChildren: TemplateChildNode[] = [];
+			const seenSlotNames = new Set<string>();
+			const onComponentSlot = findDir(node, 'slot', true);
+
+			for (const child of node.children) {
+				let slotDir: DirectiveNode | undefined;
+				if (!isTemplateNode(child) || !(slotDir = findDir(child, 'slot', true))) {
+					if (child.type !== NodeTypes.COMMENT) {
+						implicitDefaultChildren.push(child);
+					}
+					continue;
+				}
+
+				if (onComponentSlot) {
+					context.onError(
+						createCompilerError(ErrorCodes.X_V_SLOT_MIXED_SLOT_USAGE, slotDir.loc),
+					);
+					break;
+				}
+
+				if (findDir(child, /^(?:if|else-if|else|for)$/, true)) {
+					continue;
+				}
+
+				hasTemplateSlots = true;
+				const staticSlotName = slotDir.arg
+					? isStaticExp(slotDir.arg)
+						? slotDir.arg.content
+						: undefined
+					: 'default';
+
+				if (staticSlotName) {
+					if (seenSlotNames.has(staticSlotName)) {
+						context.onError(
+							createCompilerError(ErrorCodes.X_V_SLOT_DUPLICATE_SLOT_NAMES, slotDir.loc),
+						);
+						continue;
+					}
+					seenSlotNames.add(staticSlotName);
+					if (staticSlotName === 'default') {
+						hasNamedDefaultSlot = true;
+					}
+				}
+			}
+
+			if (
+				hasTemplateSlots && hasNamedDefaultSlot
+				&& implicitDefaultChildren.some(node => node.type !== NodeTypes.TEXT || !!node.content.trim())
+			) {
+				context.onError(
+					createCompilerError(
+						ErrorCodes.X_V_SLOT_EXTRANEOUS_DEFAULT_SLOT_CHILDREN,
+						implicitDefaultChildren[0]!.loc,
+					),
+				);
+			}
+
+			context.components.add(node.tag);
+		}
+	};
+};
diff --git a/packages/language-core/lib/template/transforms/transformText.ts b/packages/language-core/lib/template/transforms/transformText.ts
new file mode 100644
index 0000000000..d9130499d5
--- /dev/null
+++ b/packages/language-core/lib/template/transforms/transformText.ts
@@ -0,0 +1,40 @@
+import {
+	type CompoundExpressionNode,
+	createCompoundExpression,
+	isText,
+	type NodeTransform,
+	NodeTypes,
+} from '@vue/compiler-dom';
+
+export const transformText: NodeTransform = node => {
+	if (
+		node.type === NodeTypes.ROOT
+		|| node.type === NodeTypes.ELEMENT
+		|| node.type === NodeTypes.FOR
+		|| node.type === NodeTypes.IF_BRANCH
+	) {
+		return () => {
+			const children = node.children;
+			let currentContainer: CompoundExpressionNode | undefined = undefined;
+
+			for (let i = 0; i < children.length; i++) {
+				const child = children[i]!;
+				if (isText(child)) {
+					for (let j = i + 1; j < children.length; j++) {
+						const next = children[j]!;
+						if (isText(next)) {
+							currentContainer ??= children[i] = createCompoundExpression([child], child.loc);
+							currentContainer.children.push(` + `, next);
+							children.splice(j, 1);
+							j--;
+						}
+						else {
+							currentContainer = undefined;
+							break;
+						}
+					}
+				}
+			}
+		};
+	}
+};
diff --git a/packages/language-core/lib/template/transforms/vFor.ts b/packages/language-core/lib/template/transforms/vFor.ts
new file mode 100644
index 0000000000..b55be2feb2
--- /dev/null
+++ b/packages/language-core/lib/template/transforms/vFor.ts
@@ -0,0 +1,52 @@
+import { createCompilerError, ErrorCodes, findProp, type ForNode, isTemplateNode, NodeTypes } from '@vue/compiler-dom';
+import { createStructuralDirectiveTransform } from '../utils';
+
+export const transformFor = createStructuralDirectiveTransform(
+	'for',
+	(node, dir, context) => {
+		if (!dir.exp) {
+			context.onError(
+				createCompilerError(ErrorCodes.X_V_FOR_NO_EXPRESSION, dir.loc),
+			);
+			return;
+		}
+
+		const parseResult = dir.forParseResult;
+		if (!parseResult) {
+			context.onError(
+				createCompilerError(ErrorCodes.X_V_FOR_MALFORMED_EXPRESSION, dir.loc),
+			);
+			return;
+		}
+
+		const { source, value, key, index } = parseResult;
+		const forNode: ForNode = {
+			type: NodeTypes.FOR,
+			loc: dir.loc,
+			source,
+			valueAlias: value,
+			keyAlias: key,
+			objectIndexAlias: index,
+			parseResult,
+			children: [node],
+		};
+
+		context.replaceNode(forNode);
+
+		return () => {
+			if (isTemplateNode(node)) {
+				for (const child of node.children) {
+					if (child.type === NodeTypes.ELEMENT) {
+						const key = findProp(child, 'key');
+						if (key) {
+							context.onError(
+								createCompilerError(ErrorCodes.X_V_FOR_TEMPLATE_KEY_PLACEMENT, key.loc),
+							);
+							break;
+						}
+					}
+				}
+			}
+		};
+	},
+);
diff --git a/packages/language-core/lib/template/transforms/vIf.ts b/packages/language-core/lib/template/transforms/vIf.ts
new file mode 100644
index 0000000000..3d5a9c76c9
--- /dev/null
+++ b/packages/language-core/lib/template/transforms/vIf.ts
@@ -0,0 +1,127 @@
+import {
+	type AttributeNode,
+	createCompilerError,
+	type DirectiveNode,
+	type ElementNode,
+	ErrorCodes,
+	findProp,
+	type IfBranchNode,
+	type IfNode,
+	NodeTypes,
+	type SimpleExpressionNode,
+	traverseNode,
+} from '@vue/compiler-dom';
+import { cloneLoc, createStructuralDirectiveTransform } from '../utils';
+
+export const transformIf = createStructuralDirectiveTransform(
+	/^(?:if|else-if|else)$/,
+	(node, dir, context) => {
+		if (
+			dir.name !== 'else'
+			&& (!dir.exp || !(dir.exp as SimpleExpressionNode).content.trim())
+		) {
+			context.onError(
+				createCompilerError(ErrorCodes.X_V_IF_NO_EXPRESSION, dir.loc),
+			);
+		}
+
+		if (dir.name === 'if') {
+			const branch = createIfBranch(node, dir);
+			const ifNode: IfNode = {
+				type: NodeTypes.IF,
+				loc: cloneLoc(node.loc),
+				branches: [branch],
+			};
+			context.replaceNode(ifNode);
+		}
+		else {
+			const siblings = context.parent!.children;
+			const comments = [];
+			let i = siblings.indexOf(node);
+			while (i-- >= -1) {
+				const sibling = siblings[i];
+				if (sibling?.type === NodeTypes.COMMENT) {
+					context.removeNode(sibling);
+					comments.unshift(sibling);
+					continue;
+				}
+
+				if (sibling?.type === NodeTypes.TEXT && !sibling.content.trim().length) {
+					context.removeNode(sibling);
+					continue;
+				}
+
+				if (sibling?.type === NodeTypes.IF) {
+					if (!sibling.branches.at(-1)!.condition) {
+						context.onError(
+							createCompilerError(ErrorCodes.X_V_ELSE_NO_ADJACENT_IF, node.loc),
+						);
+					}
+
+					context.removeNode();
+					const branch = createIfBranch(node, dir);
+					if (comments.length) {
+						branch.children.unshift(...comments);
+					}
+
+					if (branch.userKey) {
+						for (const { userKey } of sibling.branches) {
+							if (isSameKey(userKey, branch.userKey)) {
+								context.onError(
+									createCompilerError(ErrorCodes.X_V_IF_SAME_KEY, branch.userKey.loc),
+								);
+							}
+						}
+					}
+
+					sibling.branches.push(branch);
+					traverseNode(branch, context);
+					context.currentNode = null;
+				}
+				else {
+					context.onError(
+						createCompilerError(ErrorCodes.X_V_ELSE_NO_ADJACENT_IF, node.loc),
+					);
+				}
+				break;
+			}
+		}
+	},
+);
+
+function createIfBranch(node: ElementNode, dir: DirectiveNode): IfBranchNode {
+	return {
+		type: NodeTypes.IF_BRANCH,
+		loc: node.loc,
+		condition: dir.name === 'else' ? undefined : dir.exp,
+		children: [node],
+		userKey: findProp(node, 'key'),
+	};
+}
+
+function isSameKey(
+	a: AttributeNode | DirectiveNode | undefined,
+	b: AttributeNode | DirectiveNode,
+): boolean {
+	if (!a || a.type !== b.type) {
+		return false;
+	}
+	if (a.type === NodeTypes.ATTRIBUTE) {
+		if (a.value!.content !== (b as AttributeNode).value!.content) {
+			return false;
+		}
+	}
+	else {
+		const exp = a.exp!;
+		const branchExp = (b as DirectiveNode).exp!;
+		if (
+			exp.type !== branchExp.type
+			|| exp.type !== NodeTypes.SIMPLE_EXPRESSION
+			|| exp.isStatic !== (branchExp as SimpleExpressionNode).isStatic
+			|| exp.content !== (branchExp as SimpleExpressionNode).content
+		) {
+			return false;
+		}
+	}
+	return true;
+}
diff --git a/packages/language-core/lib/template/utils.ts b/packages/language-core/lib/template/utils.ts
new file mode 100644
index 0000000000..cf95014dcc
--- /dev/null
+++ b/packages/language-core/lib/template/utils.ts
@@ -0,0 +1,43 @@
+import {
+	type NodeTransform,
+	NodeTypes,
+	type SourceLocation,
+	type StructuralDirectiveTransform,
+} from '@vue/compiler-dom';
+import { isString } from '@vue/shared';
+
+export function createStructuralDirectiveTransform(
+	name: string | RegExp,
+	fn: StructuralDirectiveTransform,
+): NodeTransform {
+	const matches = isString(name)
+		? (n: string) => n === name
+		: (n: string) => name.test(n);
+
+	return (node, context) => {
+		if (node.type === NodeTypes.ELEMENT) {
+			const { props } = node;
+			const exitFns = [];
+			for (let i = 0; i < props.length; i++) {
+				const prop = props[i]!;
+				if (prop.type === NodeTypes.DIRECTIVE && matches(prop.name)) {
+					props.splice(i, 1);
+					i--;
+					const onExit = fn(node, prop, context);
+					if (onExit) {
+						exitFns.push(onExit);
+					}
+				}
+			}
+			return exitFns;
+		}
+	};
+}
+
+export function cloneLoc(loc: SourceLocation): SourceLocation {
+	return {
+		start: { ...loc.start },
+		end: { ...loc.end },
+		source: loc.source,
+	};
+}
diff --git a/packages/language-core/lib/types.ts b/packages/language-core/lib/types.ts
index 4214702039..70b41e1556 100644
--- a/packages/language-core/lib/types.ts
+++ b/packages/language-core/lib/types.ts
@@ -110,8 +110,9 @@ export type VueLanguagePluginReturn = {
 
 export type VueLanguagePlugin = (ctx: {
 	modules: {
-		typescript: typeof ts;
 		'@vue/compiler-dom': typeof CompilerDOM;
+		'@vue/language-core': typeof import('../index');
+		typescript: typeof ts;
 	};
 	compilerOptions: ts.CompilerOptions;
 	vueCompilerOptions: VueCompilerOptions;
diff --git a/packages/language-core/lib/utils/forEachTemplateNode.ts b/packages/language-core/lib/utils/forEachTemplateNode.ts
index 9b127b8e05..ddf4175ee6 100644
--- a/packages/language-core/lib/utils/forEachTemplateNode.ts
+++ b/packages/language-core/lib/utils/forEachTemplateNode.ts
@@ -41,9 +41,6 @@ export function* forEachInterpolationNode(
 			yield* forEachInterpolationNode(child);
 		}
 	}
-	else if (node.type === CompilerDOM.NodeTypes.TEXT_CALL) {
-		yield* forEachInterpolationNode(node.content);
-	}
 	else if (node.type === CompilerDOM.NodeTypes.COMPOUND_EXPRESSION) {
 		for (const child of node.children) {
 			if (typeof child === 'object') {
diff --git a/packages/language-core/lib/virtualCode/ir.ts b/packages/language-core/lib/virtualCode/ir.ts
index 25a774d7ad..6115855041 100644
--- a/packages/language-core/lib/virtualCode/ir.ts
+++ b/packages/language-core/lib/virtualCode/ir.ts
@@ -1,10 +1,9 @@
-import * as CompilerDOM from '@vue/compiler-dom';
+import type * as CompilerDOM from '@vue/compiler-dom';
 import type { SFCBlock, SFCParseResult } from '@vue/compiler-sfc';
 import { computed, setActiveSub } from 'alien-signals';
 import type * as ts from 'typescript';
 import type { Sfc, SfcBlock, SfcBlockAttr, VueLanguagePluginReturn } from '../types';
 import { computedArray, computedItems } from '../utils/signals';
-import { normalizeTemplateAST } from './normalize';
 
 export function useIR(
 	ts: typeof import('typescript'),
@@ -256,14 +255,10 @@ export function useIR(
 
 			const errors: CompilerDOM.CompilerError[] = [];
 			const warnings: CompilerDOM.CompilerError[] = [];
-			const [nodeTransforms, directiveTransforms] = CompilerDOM.getBaseTransformPreset();
-
 			let options: CompilerDOM.CompilerOptions = {
 				onError: err => errors.push(err),
 				onWarn: err => warnings.push(err),
 				expressionPlugins: ['typescript'],
-				nodeTransforms,
-				directiveTransforms,
 			};
 
 			for (const plugin of plugins) {
@@ -276,7 +271,6 @@ export function useIR(
 				try {
 					const result = plugin.compileSFCTemplate?.(base.lang, base.content, options);
 					if (result) {
-						normalizeTemplateAST(result.ast);
 						return {
 							snapshot: getUntrackedSnapshot(),
 							template: base.content,
diff --git a/packages/language-core/lib/virtualCode/normalize.ts b/packages/language-core/lib/virtualCode/normalize.ts
deleted file mode 100644
index e378066d98..0000000000
--- a/packages/language-core/lib/virtualCode/normalize.ts
+++ /dev/null
@@ -1,157 +0,0 @@
-import * as CompilerDOM from '@vue/compiler-dom';
-import { forEachElementNode } from '../utils/forEachTemplateNode';
-
-// See https://github.com/vuejs/core/issues/3498
-export function normalizeTemplateAST(root: CompilerDOM.RootNode) {
-	// @ts-ignore
-	const transformContext: CompilerDOM.TransformContext = {
-		onError: () => {},
-		helperString: str => str.toString(),
-		replaceNode: () => {},
-		cacheHandlers: false,
-		prefixIdentifiers: false,
-		scopes: {
-			vFor: 0,
-			vOnce: 0,
-			vPre: 0,
-			vSlot: 0,
-		},
-		expressionPlugins: ['typescript'],
-	};
-
-	for (const { children } of forEachElementNode(root)) {
-		for (let i = 0; i < children.length; i++) {
-			const child = children[i]!;
-			if (child.type !== CompilerDOM.NodeTypes.ELEMENT) {
-				continue;
-			}
-			const forNode = getVForNode(child, transformContext);
-			if (forNode) {
-				children[i] = forNode;
-				continue;
-			}
-			const ifNode = getVIfNode(child, transformContext);
-			if (ifNode) {
-				const normalized = normalizeIfBranch(ifNode, children, i);
-				children.splice(i, normalized.end - i + 1, normalized.node);
-				continue;
-			}
-		}
-	}
-}
-
-function normalizeIfBranch(
-	ifNode: CompilerDOM.IfNode,
-	children: CompilerDOM.TemplateChildNode[],
-	start: number,
-): { node: typeof children[number]; end: number } {
-	let end = start;
-	let comments: CompilerDOM.CommentNode[] = [];
-
-	for (let i = start + 1; i < children.length; i++) {
-		const sibling = children[i]!;
-		if (sibling.type === CompilerDOM.NodeTypes.COMMENT) {
-			comments.push(sibling);
-			continue;
-		}
-		if (sibling.type === CompilerDOM.NodeTypes.TEXT && !sibling.content.trim()) {
-			continue;
-		}
-		const elseBranch = getVElseDirective(sibling);
-		if (elseBranch) {
-			const branchNode: CompilerDOM.ElementNode = {
-				...elseBranch.element,
-				props: elseBranch.element.props.filter(prop => prop !== elseBranch.directive),
-			};
-
-			const branch = createIfBranch(branchNode, elseBranch.directive);
-			if (comments.length) {
-				branch.children = [...comments, ...branch.children];
-			}
-
-			ifNode.branches.push(branch);
-			comments = [];
-			end = i;
-			continue;
-		}
-		break;
-	}
-
-	return { node: ifNode, end };
-}
-
-// source: https://github.com/vuejs/core/blob/25ebe3a42cd80ac0256355c2740a0258cdd7419d/packages/compiler-core/src/transforms/vIf.ts#L207
-function createIfBranch(node: CompilerDOM.ElementNode, dir: CompilerDOM.DirectiveNode): CompilerDOM.IfBranchNode {
-	const isTemplateIf = node.tagType === CompilerDOM.ElementTypes.TEMPLATE;
-	return {
-		type: CompilerDOM.NodeTypes.IF_BRANCH,
-		loc: node.loc,
-		condition: dir.name === 'else' ? undefined : dir.exp,
-		children: isTemplateIf && !CompilerDOM.findDir(node, 'for') ? node.children : [node],
-		userKey: CompilerDOM.findProp(node, 'key'),
-		isTemplateIf,
-	};
-}
-
-function getVElseDirective(node: CompilerDOM.TemplateChildNode) {
-	if (node.type !== CompilerDOM.NodeTypes.ELEMENT) {
-		return;
-	}
-	const directive = node.props.find(
-		(prop): prop is CompilerDOM.DirectiveNode =>
-			prop.type === CompilerDOM.NodeTypes.DIRECTIVE
-			&& (prop.name === 'else-if' || prop.name === 'else'),
-	);
-	if (directive) {
-		return {
-			element: node,
-			directive,
-		};
-	}
-}
-
-function getVForNode(node: CompilerDOM.ElementNode, transformContext: CompilerDOM.TransformContext) {
-	const forDirective = node.props.find(
-		(prop): prop is CompilerDOM.DirectiveNode =>
-			prop.type === CompilerDOM.NodeTypes.DIRECTIVE
-			&& prop.name === 'for',
-	);
-	if (forDirective) {
-		let forNode: CompilerDOM.ForNode | undefined;
-		CompilerDOM.processFor(node, forDirective, transformContext, _forNode => {
-			forNode = { ..._forNode };
-			return undefined;
-		});
-		if (forNode) {
-			forNode.children = [{
-				...node,
-				props: node.props.filter(prop => prop !== forDirective),
-			}];
-			return forNode;
-		}
-	}
-}
-
-function getVIfNode(node: CompilerDOM.ElementNode, transformContext: CompilerDOM.TransformContext) {
-	const ifDirective = node.props.find(
-		(prop): prop is CompilerDOM.DirectiveNode =>
-			prop.type === CompilerDOM.NodeTypes.DIRECTIVE
-			&& prop.name === 'if',
-	);
-	if (ifDirective) {
-		let ifNode: CompilerDOM.IfNode | undefined;
-		CompilerDOM.processIf(node, ifDirective, transformContext, _ifNode => {
-			ifNode = { ..._ifNode };
-			return undefined;
-		});
-		if (ifNode) {
-			for (const branch of ifNode.branches) {
-				branch.children = [{
-					...node,
-					props: node.props.filter(prop => prop !== ifDirective),
-				}];
-			}
-			return ifNode;
-		}
-	}
-}
diff --git a/packages/language-core/package.json b/packages/language-core/package.json
index e370fcff27..6557fd70e2 100644
--- a/packages/language-core/package.json
+++ b/packages/language-core/package.json
@@ -14,8 +14,8 @@
 	},
 	"dependencies": {
 		"@volar/language-core": "2.4.26",
-		"@vue/compiler-dom": "^3.5.0",
-		"@vue/shared": "^3.5.0",
+		"@vue/compiler-dom": "^3.5.24",
+		"@vue/shared": "^3.5.24",
 		"alien-signals": "^3.0.0",
 		"muggle-string": "^0.4.1",
 		"path-browserify": "^1.0.1",
@@ -26,7 +26,7 @@
 		"@types/path-browserify": "^1.0.1",
 		"@types/picomatch": "^4.0.0",
 		"@volar/typescript": "2.4.26",
-		"@vue/compiler-sfc": "^3.5.0"
+		"@vue/compiler-sfc": "^3.5.24"
 	},
 	"peerDependencies": {
 		"typescript": "*"
diff --git a/packages/language-plugin-pug/index.ts b/packages/language-plugin-pug/index.ts
index 6b32d47357..1ca574803e 100644
--- a/packages/language-plugin-pug/index.ts
+++ b/packages/language-plugin-pug/index.ts
@@ -6,8 +6,6 @@ import * as pug from 'volar-service-pug/lib/languageService';
 const classRegex = /^class\s*=/;
 
 const plugin: VueLanguagePlugin = ({ modules }) => {
-	const CompilerDOM = modules['@vue/compiler-dom'];
-
 	return {
 		name: require('./package.json').name,
 
@@ -47,6 +45,8 @@ const plugin: VueLanguagePlugin = ({ modules }) => {
 
 		compileSFCTemplate(lang, template, options) {
 			if (lang === 'pug') {
+				const { compileTemplate } = modules['@vue/language-core'];
+
 				let pugFile: ReturnType<typeof pug.baseParse>;
 				let baseOffset = 0;
 
@@ -63,9 +63,8 @@ const plugin: VueLanguagePlugin = ({ modules }) => {
 				}
 
 				const map = new SourceMap(pugFile.mappings);
-				const ast = CompilerDOM.parse(pugFile.htmlCode, {
+				const ast = compileTemplate(pugFile.htmlCode, {
 					...options,
-					comments: true,
 					onWarn(warning) {
 						options.onWarn?.(createProxyObject(warning));
 					},
@@ -80,7 +79,6 @@ const plugin: VueLanguagePlugin = ({ modules }) => {
 						options.onError?.(createProxyObject(error));
 					},
 				});
-				CompilerDOM.transform(ast, options);
 
 				return {
 					ast: createProxyObject(ast),
diff --git a/packages/language-plugin-pug/package.json b/packages/language-plugin-pug/package.json
index 2f994dd3dc..9336284d7a 100644
--- a/packages/language-plugin-pug/package.json
+++ b/packages/language-plugin-pug/package.json
@@ -18,7 +18,7 @@
 	},
 	"devDependencies": {
 		"@types/node": "^22.10.4",
-		"@vue/compiler-dom": "^3.5.0",
+		"@vue/compiler-dom": "^3.5.24",
 		"@vue/language-core": "3.1.5"
 	}
 }
diff --git a/packages/language-service/package.json b/packages/language-service/package.json
index a9903c250d..e19b1e29bb 100644
--- a/packages/language-service/package.json
+++ b/packages/language-service/package.json
@@ -19,7 +19,7 @@
 	"dependencies": {
 		"@volar/language-service": "2.4.26",
 		"@vue/language-core": "3.1.5",
-		"@vue/shared": "^3.5.0",
+		"@vue/shared": "^3.5.24",
 		"path-browserify": "^1.0.1",
 		"volar-service-css": "0.0.67",
 		"volar-service-emmet": "0.0.67",
@@ -36,7 +36,7 @@
 		"@types/path-browserify": "^1.0.1",
 		"@volar/kit": "2.4.26",
 		"@volar/typescript": "2.4.26",
-		"@vue/compiler-dom": "^3.5.0",
+		"@vue/compiler-dom": "^3.5.24",
 		"@vue/typescript-plugin": "3.1.5",
 		"vscode-css-languageservice": "^6.3.1"
 	}
diff --git a/packages/typescript-plugin/package.json b/packages/typescript-plugin/package.json
index 71e447ebd2..64fdbc7fcc 100644
--- a/packages/typescript-plugin/package.json
+++ b/packages/typescript-plugin/package.json
@@ -15,7 +15,7 @@
 	"dependencies": {
 		"@volar/typescript": "2.4.26",
 		"@vue/language-core": "3.1.5",
-		"@vue/shared": "^3.5.0",
+		"@vue/shared": "^3.5.24",
 		"path-browserify": "^1.0.1"
 	},
 	"devDependencies": {
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index c1e7a3803a..9343e16aed 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -57,8 +57,8 @@ importers:
         specifier: ^3.2.1
         version: 3.3.2
       '@vue/compiler-sfc':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       '@vue/language-core':
         specifier: 3.1.5
         version: link:../../packages/language-core
@@ -120,11 +120,11 @@ importers:
         specifier: 2.4.26
         version: 2.4.26
       '@vue/compiler-dom':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       '@vue/shared':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       alien-signals:
         specifier: ^3.0.0
         version: 3.0.0
@@ -154,8 +154,8 @@ importers:
         specifier: 2.4.26
         version: 2.4.26
       '@vue/compiler-sfc':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
 
   packages/language-plugin-pug:
     dependencies:
@@ -170,8 +170,8 @@ importers:
         specifier: ^22.10.4
         version: 22.15.2
       '@vue/compiler-dom':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       '@vue/language-core':
         specifier: 3.1.5
         version: link:../language-core
@@ -213,8 +213,8 @@ importers:
         specifier: 3.1.5
         version: link:../language-core
       '@vue/shared':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       path-browserify:
         specifier: ^1.0.1
         version: 1.0.1
@@ -259,8 +259,8 @@ importers:
         specifier: 2.4.26
         version: 2.4.26
       '@vue/compiler-dom':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       '@vue/typescript-plugin':
         specifier: 3.1.5
         version: link:../typescript-plugin
@@ -293,8 +293,8 @@ importers:
         specifier: 3.1.5
         version: link:../language-core
       '@vue/shared':
-        specifier: ^3.5.0
-        version: 3.5.13
+        specifier: ^3.5.24
+        version: 3.5.24
       path-browserify:
         specifier: ^1.0.1
         version: 1.0.1
@@ -374,21 +374,21 @@ packages:
     resolution: {integrity: sha512-RJlIHRueQgwWitWgF8OdFYGZX328Ax5BCemNGlqHfplnRT9ESi8JkFlvaVYbS+UubVY6dpv87Fs2u5M29iNFVQ==}
     engines: {node: '>=6.9.0'}
 
-  '@babel/helper-string-parser@7.25.9':
-    resolution: {integrity: sha512-4A/SCr/2KLd5jrtOMFzaKjVtAei3+2r/NChoBNoZ3EyP/+GlhoaEGoWOZUmFmoITP7zOJyHIMm+DYRd8o3PvHA==}
+  '@babel/helper-string-parser@7.27.1':
+    resolution: {integrity: sha512-qMlSxKbpRlAridDExk92nSobyDdpPijUq2DW6oDnUqd0iOGxmQjyqhMIihI9+zv4LPyZdRje2cavWPbCbWm3eA==}
     engines: {node: '>=6.9.0'}
 
-  '@babel/helper-validator-identifier@7.25.9':
-    resolution: {integrity: sha512-Ed61U6XJc3CVRfkERJWDz4dJwKe7iLmmJsbOGu9wSloNSFttHV0I8g6UAgb7qnK5ly5bGLPd4oXZlxCdANBOWQ==}
+  '@babel/helper-validator-identifier@7.28.5':
+    resolution: {integrity: sha512-qSs4ifwzKJSV39ucNjsvc6WVHs6b7S03sOh2OcHF9UHfVPqWWALUsNUVzhSBiItjRZoLHx7nIarVjqKVusUZ1Q==}
     engines: {node: '>=6.9.0'}
 
-  '@babel/parser@7.27.0':
-    resolution: {integrity: sha512-iaepho73/2Pz7w2eMS0Q5f83+0RKI7i4xmiYeBmDzfRVbQtTOG7Ts0S4HzJVsTMGI9keU8rNfuZr8DKfSt7Yyg==}
+  '@babel/parser@7.28.5':
+    resolution: {integrity: sha512-KKBU1VGYR7ORr3At5HAtUQ+TV3SzRCXmA/8OdDZiLDBIZxVyzXuztPjfLd3BV1PRAQGCMWWSHYhL0F8d5uHBDQ==}
     engines: {node: '>=6.0.0'}
     hasBin: true
 
-  '@babel/types@7.27.0':
-    resolution: {integrity: sha512-H45s8fVLYjbhFH62dIJ3WtmJ6RSPt/3DRO0ZcT2SUiYiQyz3BLVb9ADEnLl91m74aQPS3AzzeajZHYOalWe3bg==}
+  '@babel/types@7.28.5':
+    resolution: {integrity: sha512-qQ5m48eI/MFLQ5PxQj4PFaprjyCTLI37ElWMmNs0K8Lk3dVeOdNpB3ks8jc7yM5CDmVC73eMVk/trk3fgmrUpA==}
     engines: {node: '>=6.9.0'}
 
   '@clack/core@0.3.5':
@@ -763,8 +763,8 @@ packages:
   '@johnsoncodehk/pug-beautify@0.2.2':
     resolution: {integrity: sha512-qqNS/YD0Nck5wtQLCPHAfGVgWbbGafxSPjNh0ekYPFSNNqnDH2kamnduzYly8IiADmeVx/MfAE1njMEjVeHTMA==}
 
-  '@jridgewell/sourcemap-codec@1.5.0':
-    resolution: {integrity: sha512-gv3ZRaISU3fjPAgNsriBRqGWQL6quFx04YMPW/zD8XMLsU32mhCCbfbO6KZFLjvYpCZ8zyDEgqsgf+PwPaM7GQ==}
+  '@jridgewell/sourcemap-codec@1.5.5':
+    resolution: {integrity: sha512-cYQ9310grqxueWbl+WuIUIaiUaDcj7WOq5fVhEljNVgRfOUhY9fy2zTvfoqWsnebh8Sl70VScFbICvJnLKB0Og==}
 
   '@lerna-lite/cli@4.1.2':
     resolution: {integrity: sha512-Pf3tlXxVCro5x+6eEFtnlYTnIB3Bl/EAjNmcaTQOKURWTycc+/qhZb66Cj6qtwObfy4faYAlpYMbl5IEhW+BPQ==}
@@ -1389,8 +1389,8 @@ packages:
   '@vue/compiler-core@3.4.38':
     resolution: {integrity: sha512-8IQOTCWnLFqfHzOGm9+P8OPSEDukgg3Huc92qSG49if/xI2SAwLHQO2qaPQbjCWPBcQoO1WYfXfTACUrWV3c5A==}
 
-  '@vue/compiler-core@3.5.13':
-    resolution: {integrity: sha512-oOdAkwqUfW1WqpwSYJce06wvt6HljgY3fGeM9NcVA1HaYOij3mZG9Rkysn0OHuyUAGMbEbARIpsG+LPVlBJ5/Q==}
+  '@vue/compiler-core@3.5.24':
+    resolution: {integrity: sha512-eDl5H57AOpNakGNAkFDH+y7kTqrQpJkZFXhWZQGyx/5Wh7B1uQYvcWkvZi11BDhscPgj8N7XV3oRwiPnx1Vrig==}
 
   '@vue/compiler-core@https://pkg.pr.new/vuejs/core/@vue/compiler-core@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     resolution: {tarball: https://pkg.pr.new/vuejs/core/@vue/compiler-core@e1bc0eb02e22bc0c236e1471c11d96a368764b72}
@@ -1399,8 +1399,8 @@ packages:
   '@vue/compiler-dom@3.4.38':
     resolution: {integrity: sha512-Osc/c7ABsHXTsETLgykcOwIxFktHfGSUDkb05V61rocEfsFDcjDLH/IHJSNJP+/Sv9KeN2Lx1V6McZzlSb9EhQ==}
 
-  '@vue/compiler-dom@3.5.13':
-    resolution: {integrity: sha512-ZOJ46sMOKUjO3e94wPdCzQ6P1Lx/vhp2RSvfaab88Ajexs0AHeV0uasYhi99WPaogmBlRHNRuly8xV75cNTMDA==}
+  '@vue/compiler-dom@3.5.24':
+    resolution: {integrity: sha512-1QHGAvs53gXkWdd3ZMGYuvQFXHW4ksKWPG8HP8/2BscrbZ0brw183q2oNWjMrSWImYLHxHrx1ItBQr50I/q2zw==}
 
   '@vue/compiler-dom@https://pkg.pr.new/vuejs/core/@vue/compiler-dom@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     resolution: {tarball: https://pkg.pr.new/vuejs/core/@vue/compiler-dom@e1bc0eb02e22bc0c236e1471c11d96a368764b72}
@@ -1409,8 +1409,8 @@ packages:
   '@vue/compiler-sfc@3.4.38':
     resolution: {integrity: sha512-s5QfZ+9PzPh3T5H4hsQDJtI8x7zdJaew/dCGgqZ2630XdzaZ3AD8xGZfBqpT8oaD/p2eedd+pL8tD5vvt5ZYJQ==}
 
-  '@vue/compiler-sfc@3.5.13':
-    resolution: {integrity: sha512-6VdaljMpD82w6c2749Zhf5T9u5uLBWKnVue6XWxprDobftnletJ8+oel7sexFfM3qIxNmVE7LSFGTpv6obNyaQ==}
+  '@vue/compiler-sfc@3.5.24':
+    resolution: {integrity: sha512-8EG5YPRgmTB+YxYBM3VXy8zHD9SWHUJLIGPhDovo3Z8VOgvP+O7UP5vl0J4BBPWYD9vxtBabzW1EuEZ+Cqs14g==}
 
   '@vue/compiler-sfc@https://pkg.pr.new/vuejs/core/@vue/compiler-sfc@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     resolution: {tarball: https://pkg.pr.new/vuejs/core/@vue/compiler-sfc@e1bc0eb02e22bc0c236e1471c11d96a368764b72}
@@ -1419,8 +1419,8 @@ packages:
   '@vue/compiler-ssr@3.4.38':
     resolution: {integrity: sha512-YXznKFQ8dxYpAz9zLuVvfcXhc31FSPFDcqr0kyujbOwNhlmaNvL2QfIy+RZeJgSn5Fk54CWoEUeW+NVBAogGaw==}
 
-  '@vue/compiler-ssr@3.5.13':
-    resolution: {integrity: sha512-wMH6vrYHxQl/IybKJagqbquvxpWCuVYpoUJfCqFZwa/JY1GdATAQ+TgVtgrwwMZ0D07QhA99rs/EAAWfvG6KpA==}
+  '@vue/compiler-ssr@3.5.24':
+    resolution: {integrity: sha512-trOvMWNBMQ/odMRHW7Ae1CdfYx+7MuiQu62Jtu36gMLXcaoqKvAyh+P73sYG9ll+6jLB6QPovqoKGGZROzkFFg==}
 
   '@vue/compiler-ssr@https://pkg.pr.new/vuejs/core/@vue/compiler-ssr@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     resolution: {tarball: https://pkg.pr.new/vuejs/core/@vue/compiler-ssr@e1bc0eb02e22bc0c236e1471c11d96a368764b72}
@@ -1462,8 +1462,8 @@ packages:
   '@vue/shared@3.4.38':
     resolution: {integrity: sha512-q0xCiLkuWWQLzVrecPb0RMsNWyxICOjPrcrwxTUEHb1fsnvni4dcuyG7RT/Ie7VPTvnjzIaWzRMUBsrqNj/hhw==}
 
-  '@vue/shared@3.5.13':
-    resolution: {integrity: sha512-/hnE/qP5ZoGpol0a5mDi45bOd7t3tjYJBjsgCsivow7D48cJeV5l05RD82lPqi7gRiphZM37rnhW1l6ZoCNNnQ==}
+  '@vue/shared@3.5.24':
+    resolution: {integrity: sha512-9cwHL2EsJBdi8NY22pngYYWzkTDhld6fAD6jlaeloNGciNSJL6bLpbxVgXl96X00Jtc6YWQv96YA/0sxex/k1A==}
 
   '@vue/shared@https://pkg.pr.new/vuejs/core/@vue/shared@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     resolution: {tarball: https://pkg.pr.new/vuejs/core/@vue/shared@e1bc0eb02e22bc0c236e1471c11d96a368764b72}
@@ -2576,8 +2576,8 @@ packages:
     resolution: {integrity: sha512-Jo6dJ04CmSjuznwJSS3pUeWmd/H0ffTlkXXgwZi+eq1UCmqQwCh+eLsYOYCwY991i2Fah4h1BEMCx4qThGbsiA==}
     engines: {node: '>=10'}
 
-  magic-string@0.30.17:
-    resolution: {integrity: sha512-sNPKHvyjVf7gyjwS4xGTaW/mCnF8wnjtifKBEhxfZ7E/S8tQ0rssrwGNn6q8JH/ohItJfSQp9mBtQYuTlH5QnA==}
+  magic-string@0.30.21:
+    resolution: {integrity: sha512-vd2F4YUyEXKGcLHoq+TEyCjxueSeHnFxyyjNp80yg0XV4vUhnDer/lvvlqM/arB5bXQN5K2/3oinyCRyx8T2CQ==}
 
   make-dir@5.0.0:
     resolution: {integrity: sha512-G0yBotnlWVonPClw+tq+xi4K7DZC9n96HjGTBDdHkstAVsDkfZhi1sTvZypXLpyQTbISBkDtK0E5XlUqDsShQg==}
@@ -2967,8 +2967,8 @@ packages:
     resolution: {integrity: sha512-8sLjZwK0R+JlxlYcTuVnyT2v+htpdrjDOKuMcOVdYjt52Lh8hWRYpxBPoKx/Zg+bcjc3wx6fmQevMmUztS/ccA==}
     engines: {node: '>=4'}
 
-  postcss@8.5.3:
-    resolution: {integrity: sha512-dle9A3yYxlBSrt8Fu+IpjGT8SY8hN0mlaA6GY8t0P5PjIOZemULz/E2Bnm/2dcUOena75OTNkHI76uZBNUUq3A==}
+  postcss@8.5.6:
+    resolution: {integrity: sha512-3Ybi1tAuwAP9s0r1UQ2J4n5Y0G05bJkpUIO0/bI9MhwmD70S5aTWbXGBwxHrelT+XM1k6dM0pk+SwNkpTRN7Pg==}
     engines: {node: ^10 || ^12 || >=14}
 
   prebuild-install@7.1.3:
@@ -3854,22 +3854,22 @@ snapshots:
 
   '@babel/code-frame@7.26.2':
     dependencies:
-      '@babel/helper-validator-identifier': 7.25.9
+      '@babel/helper-validator-identifier': 7.28.5
       js-tokens: 4.0.0
       picocolors: 1.1.1
 
-  '@babel/helper-string-parser@7.25.9': {}
+  '@babel/helper-string-parser@7.27.1': {}
 
-  '@babel/helper-validator-identifier@7.25.9': {}
+  '@babel/helper-validator-identifier@7.28.5': {}
 
-  '@babel/parser@7.27.0':
+  '@babel/parser@7.28.5':
     dependencies:
-      '@babel/types': 7.27.0
+      '@babel/types': 7.28.5
 
-  '@babel/types@7.27.0':
+  '@babel/types@7.28.5':
     dependencies:
-      '@babel/helper-string-parser': 7.25.9
-      '@babel/helper-validator-identifier': 7.25.9
+      '@babel/helper-string-parser': 7.27.1
+      '@babel/helper-validator-identifier': 7.28.5
 
   '@clack/core@0.3.5':
     dependencies:
@@ -4156,7 +4156,7 @@ snapshots:
 
   '@johnsoncodehk/pug-beautify@0.2.2': {}
 
-  '@jridgewell/sourcemap-codec@1.5.0': {}
+  '@jridgewell/sourcemap-codec@1.5.5': {}
 
   '@lerna-lite/cli@4.1.2(@lerna-lite/publish@4.1.2(@types/node@22.15.2)(conventional-commits-filter@5.0.0)(typescript@5.9.3))(@lerna-lite/version@4.1.2(@lerna-lite/publish@4.1.2(@types/node@22.15.2)(conventional-commits-filter@5.0.0)(typescript@5.9.3))(@types/node@22.15.2)(conventional-commits-filter@5.0.0)(typescript@5.9.3))(@types/node@22.15.2)(typescript@5.9.3)':
     dependencies:
@@ -4854,7 +4854,7 @@ snapshots:
     dependencies:
       '@vitest/spy': 3.1.3
       estree-walker: 3.0.3
-      magic-string: 0.30.17
+      magic-string: 0.30.21
     optionalDependencies:
       vite: 5.4.18(@types/node@22.15.2)
 
@@ -4870,7 +4870,7 @@ snapshots:
   '@vitest/snapshot@3.1.3':
     dependencies:
       '@vitest/pretty-format': 3.1.3
-      magic-string: 0.30.17
+      magic-string: 0.30.21
       pathe: 2.0.3
 
   '@vitest/spy@3.1.3':
@@ -5020,23 +5020,23 @@ snapshots:
 
   '@vue/compiler-core@3.4.38':
     dependencies:
-      '@babel/parser': 7.27.0
+      '@babel/parser': 7.28.5
       '@vue/shared': 3.4.38
       entities: 4.5.0
       estree-walker: 2.0.2
       source-map-js: 1.2.1
 
-  '@vue/compiler-core@3.5.13':
+  '@vue/compiler-core@3.5.24':
     dependencies:
-      '@babel/parser': 7.27.0
-      '@vue/shared': 3.5.13
+      '@babel/parser': 7.28.5
+      '@vue/shared': 3.5.24
       entities: 4.5.0
       estree-walker: 2.0.2
       source-map-js: 1.2.1
 
   '@vue/compiler-core@https://pkg.pr.new/vuejs/core/@vue/compiler-core@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     dependencies:
-      '@babel/parser': 7.27.0
+      '@babel/parser': 7.28.5
       '@vue/shared': https://pkg.pr.new/vuejs/core/@vue/shared@e1bc0eb02e22bc0c236e1471c11d96a368764b72
       entities: 4.5.0
       estree-walker: 2.0.2
@@ -5047,10 +5047,10 @@ snapshots:
       '@vue/compiler-core': 3.4.38
       '@vue/shared': 3.4.38
 
-  '@vue/compiler-dom@3.5.13':
+  '@vue/compiler-dom@3.5.24':
     dependencies:
-      '@vue/compiler-core': 3.5.13
-      '@vue/shared': 3.5.13
+      '@vue/compiler-core': 3.5.24
+      '@vue/shared': 3.5.24
 
   '@vue/compiler-dom@https://pkg.pr.new/vuejs/core/@vue/compiler-dom@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     dependencies:
@@ -5059,38 +5059,38 @@ snapshots:
 
   '@vue/compiler-sfc@3.4.38':
     dependencies:
-      '@babel/parser': 7.27.0
+      '@babel/parser': 7.28.5
       '@vue/compiler-core': 3.4.38
       '@vue/compiler-dom': 3.4.38
       '@vue/compiler-ssr': 3.4.38
       '@vue/shared': 3.4.38
       estree-walker: 2.0.2
-      magic-string: 0.30.17
-      postcss: 8.5.3
+      magic-string: 0.30.21
+      postcss: 8.5.6
       source-map-js: 1.2.1
 
-  '@vue/compiler-sfc@3.5.13':
+  '@vue/compiler-sfc@3.5.24':
     dependencies:
-      '@babel/parser': 7.27.0
-      '@vue/compiler-core': 3.5.13
-      '@vue/compiler-dom': 3.5.13
-      '@vue/compiler-ssr': 3.5.13
-      '@vue/shared': 3.5.13
+      '@babel/parser': 7.28.5
+      '@vue/compiler-core': 3.5.24
+      '@vue/compiler-dom': 3.5.24
+      '@vue/compiler-ssr': 3.5.24
+      '@vue/shared': 3.5.24
       estree-walker: 2.0.2
-      magic-string: 0.30.17
-      postcss: 8.5.3
+      magic-string: 0.30.21
+      postcss: 8.5.6
       source-map-js: 1.2.1
 
   '@vue/compiler-sfc@https://pkg.pr.new/vuejs/core/@vue/compiler-sfc@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     dependencies:
-      '@babel/parser': 7.27.0
+      '@babel/parser': 7.28.5
       '@vue/compiler-core': https://pkg.pr.new/vuejs/core/@vue/compiler-core@e1bc0eb02e22bc0c236e1471c11d96a368764b72
       '@vue/compiler-dom': https://pkg.pr.new/vuejs/core/@vue/compiler-dom@e1bc0eb02e22bc0c236e1471c11d96a368764b72
       '@vue/compiler-ssr': https://pkg.pr.new/vuejs/core/@vue/compiler-ssr@e1bc0eb02e22bc0c236e1471c11d96a368764b72
       '@vue/shared': https://pkg.pr.new/vuejs/core/@vue/shared@e1bc0eb02e22bc0c236e1471c11d96a368764b72
       estree-walker: 2.0.2
-      magic-string: 0.30.17
-      postcss: 8.5.3
+      magic-string: 0.30.21
+      postcss: 8.5.6
       source-map-js: 1.2.1
 
   '@vue/compiler-ssr@3.4.38':
@@ -5098,10 +5098,10 @@ snapshots:
       '@vue/compiler-dom': 3.4.38
       '@vue/shared': 3.4.38
 
-  '@vue/compiler-ssr@3.5.13':
+  '@vue/compiler-ssr@3.5.24':
     dependencies:
-      '@vue/compiler-dom': 3.5.13
-      '@vue/shared': 3.5.13
+      '@vue/compiler-dom': 3.5.24
+      '@vue/shared': 3.5.24
 
   '@vue/compiler-ssr@https://pkg.pr.new/vuejs/core/@vue/compiler-ssr@e1bc0eb02e22bc0c236e1471c11d96a368764b72':
     dependencies:
@@ -5154,7 +5154,7 @@ snapshots:
 
   '@vue/shared@3.4.38': {}
 
-  '@vue/shared@3.5.13': {}
+  '@vue/shared@3.5.24': {}
 
   '@vue/shared@https://pkg.pr.new/vuejs/core/@vue/shared@e1bc0eb02e22bc0c236e1471c11d96a368764b72': {}
 
@@ -6301,9 +6301,9 @@ snapshots:
     dependencies:
       yallist: 4.0.0
 
-  magic-string@0.30.17:
+  magic-string@0.30.21:
     dependencies:
-      '@jridgewell/sourcemap-codec': 1.5.0
+      '@jridgewell/sourcemap-codec': 1.5.5
 
   make-dir@5.0.0: {}
 
@@ -6718,7 +6718,7 @@ snapshots:
       cssesc: 3.0.0
       util-deprecate: 1.0.2
 
-  postcss@8.5.3:
+  postcss@8.5.6:
     dependencies:
       nanoid: 3.3.11
       picocolors: 1.1.1
@@ -7265,7 +7265,7 @@ snapshots:
   vite@5.4.18(@types/node@22.15.2):
     dependencies:
       esbuild: 0.21.5
-      postcss: 8.5.3
+      postcss: 8.5.6
       rollup: 4.40.0
     optionalDependencies:
       '@types/node': 22.15.2
@@ -7283,7 +7283,7 @@ snapshots:
       chai: 5.2.0
       debug: 4.4.0
       expect-type: 1.2.1
-      magic-string: 0.30.17
+      magic-string: 0.30.21
       pathe: 2.0.3
       std-env: 3.9.0
       tinybench: 2.9.0
diff --git a/test-workspace/tsc/passedFixtures/vue3/#5492/main.vue b/test-workspace/tsc/passedFixtures/vue3/#5492/main.vue
index 4fc0fb5066..1cae22917d 100644
--- a/test-workspace/tsc/passedFixtures/vue3/#5492/main.vue
+++ b/test-workspace/tsc/passedFixtures/vue3/#5492/main.vue
@@ -1,19 +1,15 @@
 <script setup lang="ts">
 import { defineComponent } from 'vue';
-const Comp = defineComponent({})
-const cond1: true | 'text' = Math.random() > 0.5 ? true : 'text'
-const cond2 = true
+
+const Comp = defineComponent({});
+const [foo, bar, baz, qux] = {} as number[];
 </script>
 
 <template>
+	<template v-if="true" :foo />
+	<template v-else-if="false" :bar />
 	<Comp>
-		<template #default v-if="cond1">1</template>
-		<template #default v-else-if="cond2">2</template>
-
-		<div v-if="cond1 === true"></div>
-		<div v-else-if="cond1.length"></div>
-
-		<template #default v-if="cond1 === true">1</template>
-		<template #default v-else-if="cond1.length">2</template>
+		<template #default v-if="baz" />
+		<template #default v-else-if="qux" />
 	</Comp>
 </template>