diff --git a/cmd/cue/cmd/script_test.go b/cmd/cue/cmd/script_test.go
index 8924e22e660..e293126cc05 100644
--- a/cmd/cue/cmd/script_test.go
+++ b/cmd/cue/cmd/script_test.go
@@ -239,7 +239,8 @@ func TestScript(t *testing.T) {
 			if err != nil {
 				return fmt.Errorf("cannot read workdir: %v", err)
 			}
-			hasRegistry := false
+			// As modules are enabled by default, we always want a cache directory.
+			e.Vars = append(e.Vars, "CUE_CACHE_DIR="+filepath.Join(e.WorkDir, ".tmp/cache"))
 			for _, entry := range entries {
 				if !entry.IsDir() {
 					continue
@@ -250,7 +251,6 @@ func TestScript(t *testing.T) {
 				}
 				// There's a _registry directory. Start a fake registry server to serve
 				// the modules in it.
-				hasRegistry = true
 				registryDir := filepath.Join(e.WorkDir, entry.Name())
 				prefix := ""
 				if data, err := os.ReadFile(filepath.Join(e.WorkDir, "_registry"+regID+"_prefix")); err == nil {
@@ -271,15 +271,9 @@ func TestScript(t *testing.T) {
 					// Some tests execute cue commands that need to write cache files.
 					// Since os.UserCacheDir relies on OS-specific env vars that we don't set,
 					// explicitly set up the cache directory somewhere predictable.
-					"CUE_CACHE_DIR="+filepath.Join(e.WorkDir, ".tmp/cache"),
 				)
 				e.Defer(reg.Close)
 			}
-			if hasRegistry {
-				e.Vars = append(e.Vars,
-					"CUE_EXPERIMENT=modules",
-				)
-			}
 			return nil
 		},
 		Condition: cuetest.Condition,
diff --git a/cmd/cue/cmd/testdata/script/cmd_filetypes.txtar b/cmd/cue/cmd/testdata/script/cmd_filetypes.txtar
index 1c54dba5833..65b7f3c32b2 100644
--- a/cmd/cue/cmd/testdata/script/cmd_filetypes.txtar
+++ b/cmd/cue/cmd/testdata/script/cmd_filetypes.txtar
@@ -29,10 +29,10 @@ exec cue export ./somepkg/
 cmp stdout export.golden
 # TODO(mvdan): we should support loading packages from absolute directories.
 ! exec cue export ${WORK}${/}somepkg
-[!windows] stderr 'cannot find package ".*somepkg"'
+[!windows] stderr 'no location found for package ".*somepkg"'
 [windows] stderr 'no encoding specified for file ".*somepkg.*"'
 ! exec cue export ${WORK}${/}somepkg${/}
-[!windows] stderr 'cannot find package ".*somepkg"'
+[!windows] stderr 'no dependency found for package ".*somepkg"'
 [windows] stderr 'no encoding specified for file ".*somepkg.*"'
 
 # Now do some of the same filename tests, but for a file without any extension.
@@ -57,7 +57,7 @@ stderr 'standard library import path "somefile" cannot be imported as a CUE pack
 stderr 'cannot find package "\./somefile"'
 # TODO(mvdan): we probably should not behave differently on Windows.
 ! exec cue export ${WORK}${/}somefile
-[!windows] stderr 'cannot find package ".*somefile"'
+[!windows] stderr 'no location found for package ".*somefile"'
 [windows] stderr 'no encoding specified for file ".*somefile"'
 
 -- cue.mod/module.cue --
diff --git a/cmd/cue/cmd/testdata/script/issue174.txtar b/cmd/cue/cmd/testdata/script/issue174.txtar
index 086c6b95b5f..9d42bee1ae4 100644
--- a/cmd/cue/cmd/testdata/script/issue174.txtar
+++ b/cmd/cue/cmd/testdata/script/issue174.txtar
@@ -1,8 +1,7 @@
 ! exec cue export ./issue174
 cmp stderr expect-stderr
 -- expect-stderr --
-build constraints exclude all CUE files in ./issue174:
-    issue174/issue174.cue: no package name
+cannot enumerate all module imports: invalid import path "'foo'" in issue174/issue174.cue
 -- cue.mod/module.cue --
 module: "mod.test"
 language: version: "v0.9.0"
diff --git a/cmd/cue/cmd/testdata/script/modinit_nomajorversion.txtar b/cmd/cue/cmd/testdata/script/modinit_nomajorversion.txtar
index 311f2b46f7f..ae649a95d11 100644
--- a/cmd/cue/cmd/testdata/script/modinit_nomajorversion.txtar
+++ b/cmd/cue/cmd/testdata/script/modinit_nomajorversion.txtar
@@ -2,6 +2,7 @@ env-fill want-module.cue
 env-fill want-module-experiment.cue
 
 # Without the experiment, we use the module path as-is.
+env CUE_EXPERIMENT=modules=false
 exec cue mod init foo.com/bar
 cmp cue.mod/module.cue want-module.cue
 exists cue.mod/usr
diff --git a/cmd/cue/cmd/testdata/script/modinit_withsource.txtar b/cmd/cue/cmd/testdata/script/modinit_withsource.txtar
index 50a12602b71..dba45226e3b 100644
--- a/cmd/cue/cmd/testdata/script/modinit_withsource.txtar
+++ b/cmd/cue/cmd/testdata/script/modinit_withsource.txtar
@@ -19,7 +19,7 @@ cd $WORK/test2
 cmp stderr $WORK/want-stderr
 
 -- want-module.cue-0 --
-module: "test.example"
+module: "test.example@v0"
 language: {
 	version: "$CUE_LANGUAGE_VERSION"
 }
@@ -27,7 +27,7 @@ source: {
 	kind: "self"
 }
 -- want-module.cue-1 --
-module: "test.example"
+module: "test.example@v0"
 language: {
 	version: "$CUE_LANGUAGE_VERSION"
 }
diff --git a/cmd/cue/cmd/testdata/script/modpublish_registry_not_enabled.txtar b/cmd/cue/cmd/testdata/script/modpublish_registry_not_enabled.txtar
index af68db59f7f..d75d45a6c62 100644
--- a/cmd/cue/cmd/testdata/script/modpublish_registry_not_enabled.txtar
+++ b/cmd/cue/cmd/testdata/script/modpublish_registry_not_enabled.txtar
@@ -1,3 +1,4 @@
+env CUE_EXPERIMENT=modules=false
 ! exec cue mod publish v1.0.0
 cmp stderr want-stderr
 -- want-stderr --
diff --git a/cmd/cue/cmd/testdata/script/modtidy_registry_not_enabled.txtar b/cmd/cue/cmd/testdata/script/modtidy_registry_not_enabled.txtar
index 73b34e3bb2e..97c82708766 100644
--- a/cmd/cue/cmd/testdata/script/modtidy_registry_not_enabled.txtar
+++ b/cmd/cue/cmd/testdata/script/modtidy_registry_not_enabled.txtar
@@ -1,4 +1,5 @@
-! exec cue mod tidy
-cmp stderr want-stderr
--- want-stderr --
-modules experiment not enabled (enable with CUE_EXPERIMENT=modules)
+# Check that modules are enabled by default.
+exec cue mod tidy
+-- cue.mod/module.cue --
+module: "test.example"
+language: version: "v0.9.0"
diff --git a/cmd/cue/cmd/testdata/script/registry_experiment_not_set.txtar b/cmd/cue/cmd/testdata/script/registry_experiment_not_set.txtar
index 61028280f77..1db0c773fd3 100644
--- a/cmd/cue/cmd/testdata/script/registry_experiment_not_set.txtar
+++ b/cmd/cue/cmd/testdata/script/registry_experiment_not_set.txtar
@@ -1,7 +1,7 @@
-# When CUE_EXPERIMENT is empty, the CUE_REGISTRY
+# When CUE_EXPERIMENT is disabled, the CUE_REGISTRY
 # variable is ignored, as are the new fields in module.cue
 
-env CUE_EXPERIMENT=
+env CUE_EXPERIMENT=modules=false
 exec cue export .
 cmp stdout expect-stdout
 
diff --git a/cmd/cue/cmd/testdata/script/registry_no_experiment_warning.txtar b/cmd/cue/cmd/testdata/script/registry_no_experiment_warning.txtar
index b1d165920b5..07d8b037999 100644
--- a/cmd/cue/cmd/testdata/script/registry_no_experiment_warning.txtar
+++ b/cmd/cue/cmd/testdata/script/registry_no_experiment_warning.txtar
@@ -1,4 +1,4 @@
-env CUE_EXPERIMENT=
+env CUE_EXPERIMENT=modules=false
 env CUE_REGISTRY=ignored.example.com
 exec cue export .
 cmp stdout expect-stdout
diff --git a/cue/interpreter/wasm/exe_test.go b/cue/interpreter/wasm/exe_test.go
index 869a7f3a020..f68912d50ea 100644
--- a/cue/interpreter/wasm/exe_test.go
+++ b/cue/interpreter/wasm/exe_test.go
@@ -50,6 +50,7 @@ func TestExe(t *testing.T) {
 		RequireUniqueNames:  true,
 		Setup: func(e *testscript.Env) error {
 			copyWasmFiles(t, e.WorkDir, wasmFiles)
+			e.Vars = append(e.Vars, "CUE_CACHE_DIR="+filepath.Join(e.WorkDir, ".tmp/cache"))
 			return nil
 		},
 		Condition: cuetest.Condition,
diff --git a/cue/load/import.go b/cue/load/import.go
index 33c09720911..799fb1a8715 100644
--- a/cue/load/import.go
+++ b/cue/load/import.go
@@ -257,6 +257,12 @@ func setFileSource(cfg *Config, f *build.File) error {
 		} else {
 			f.Source = fi.contents
 		}
+	} else {
+		b, err := os.ReadFile(fullPath)
+		if err != nil {
+			return err
+		}
+		f.Source = b
 	}
 	return nil
 }
diff --git a/cue/load/loader_test.go b/cue/load/loader_test.go
index 8ef4542c78f..5d12aaad29b 100644
--- a/cue/load/loader_test.go
+++ b/cue/load/loader_test.go
@@ -77,8 +77,14 @@ func TestLoad(t *testing.T) {
 		name: "BadModuleFile",
 		cfg:  badModCfg,
 		args: []string{"."},
-		want: `err:    module: cannot use value 123 (type int) as string:
+		want: `err:    module: 2 errors in empty disjunction:
+module: conflicting values 123 and "" (mismatched types int and string):
     $CWD/testdata/badmod/cue.mod/module.cue:2:9
+    cuelang.org/go/mod/modfile/schema.cue:56:22
+module: conflicting values 123 and string (mismatched types int and string):
+    $CWD/testdata/badmod/cue.mod/module.cue:2:9
+    cuelang.org/go/mod/modfile/schema.cue:56:12
+    cuelang.org/go/mod/modfile/schema.cue:101:12
 path:   ""
 module: ""
 root:   ""
@@ -91,30 +97,30 @@ display:""`,
 		// package of this directory.
 		cfg:  dirCfg,
 		args: nil,
-		want: `err:    import failed: cannot find package "mod.test/test/sub":
-    $CWD/testdata/testmod/test.cue:3:8
-path:   mod.test/test@v0
+		want: `path:   mod.test/test@v0
 module: mod.test/test@v0
 root:   $CWD/testdata/testmod
 dir:    $CWD/testdata/testmod
 display:.
 files:
-    $CWD/testdata/testmod/test.cue`}, {
+    $CWD/testdata/testmod/test.cue
+imports:
+    mod.test/test/sub: $CWD/testdata/testmod/sub/sub.cue`}, {
 		name: "DefaultPackageWithExplicitDotArgument",
 		// Even though the directory is called testdata, the last path in
 		// the module is test. So "package test" is correctly the default
 		// package of this directory.
 		cfg:  dirCfg,
 		args: []string{"."},
-		want: `err:    import failed: cannot find package "mod.test/test/sub":
-    $CWD/testdata/testmod/test.cue:3:8
-path:   mod.test/test@v0
+		want: `path:   mod.test/test@v0
 module: mod.test/test@v0
 root:   $CWD/testdata/testmod
 dir:    $CWD/testdata/testmod
 display:.
 files:
-    $CWD/testdata/testmod/test.cue`}, {
+    $CWD/testdata/testmod/test.cue
+imports:
+    mod.test/test/sub: $CWD/testdata/testmod/sub/sub.cue`}, {
 		name: "RelativeImportPathWildcard",
 		cfg:  dirCfg,
 		args: []string{"./other/..."},
@@ -150,36 +156,41 @@ files:
 		name: "RelativePathSuccess",
 		cfg:  dirCfg,
 		args: []string{"./hello"},
-		want: `err:    import failed: cannot find package "mod.test/test/sub":
-    $CWD/testdata/testmod/test.cue:3:8
-path:   mod.test/test/hello@v0:test
+		want: `path:   mod.test/test/hello@v0:test
 module: mod.test/test@v0
 root:   $CWD/testdata/testmod
 dir:    $CWD/testdata/testmod/hello
 display:./hello
 files:
     $CWD/testdata/testmod/test.cue
-    $CWD/testdata/testmod/hello/test.cue`}, {
+    $CWD/testdata/testmod/hello/test.cue
+imports:
+    mod.test/test/sub: $CWD/testdata/testmod/sub/sub.cue`}, {
 		name: "ExplicitPackageIdentifier",
 		cfg:  dirCfg,
 		args: []string{"mod.test/test/hello:test"},
-		want: `err:    cannot find package "mod.test/test/hello:test"
-path:   mod.test/test/hello:test
+		want: `path:   mod.test/test/hello:test
 module: mod.test/test@v0
 root:   $CWD/testdata/testmod
-dir:    $CWD/testdata/testmod/cue.mod/gen/mod.test/test/hello
-display:mod.test/test/hello:test`,
-	}, {
+dir:    $CWD/testdata/testmod/hello
+display:mod.test/test/hello:test
+files:
+    $CWD/testdata/testmod/test.cue
+    $CWD/testdata/testmod/hello/test.cue
+imports:
+    mod.test/test/sub: $CWD/testdata/testmod/sub/sub.cue`}, {
 		name: "NoPackageName",
 		cfg:  dirCfg,
 		args: []string{"mod.test/test/hello:nonexist"},
-		want: `err:    cannot find package "mod.test/test/hello:nonexist"
+		want: `err:    build constraints exclude all CUE files in mod.test/test/hello:nonexist:
+    anon.cue: no package name
+    test.cue: package is test, want nonexist
+    hello/test.cue: package is test, want nonexist
 path:   mod.test/test/hello:nonexist
 module: mod.test/test@v0
 root:   $CWD/testdata/testmod
-dir:    $CWD/testdata/testmod/cue.mod/gen/mod.test/test/hello
-display:mod.test/test/hello:nonexist`,
-	}, {
+dir:    $CWD/testdata/testmod/hello
+display:mod.test/test/hello:nonexist`}, {
 		name: "ExplicitNonPackageFiles",
 		cfg:  dirCfg,
 		args: []string{"./anon.cue", "./other/anon.cue"},
@@ -190,7 +201,8 @@ dir:    $CWD/testdata/testmod
 display:command-line-arguments
 files:
     $CWD/testdata/testmod/anon.cue
-    $CWD/testdata/testmod/other/anon.cue`}, {
+    $CWD/testdata/testmod/other/anon.cue`,
+	}, {
 		name: "AbsoluteFileIsNormalized", // TODO what is this actually testing?
 		cfg:  dirCfg,
 		// Absolute file is normalized.
@@ -215,11 +227,11 @@ files:
 		name: "BadIdentifier",
 		cfg:  dirCfg,
 		args: []string{"foo.com/bad-identifier"},
-		want: `err:    implied package identifier "bad-identifier" from import path "foo.com/bad-identifier" is not valid
+		want: `err:    cannot find package "foo.com/bad-identifier": cannot find module providing package foo.com/bad-identifier
 path:   foo.com/bad-identifier
 module: mod.test/test@v0
 root:   $CWD/testdata/testmod
-dir:    $CWD/testdata/testmod/cue.mod/gen/foo.com/bad-identifier
+dir:    ""
 display:foo.com/bad-identifier`,
 	}, {
 		name: "NonexistentStdlibImport",
diff --git a/internal/cueexperiment/exp.go b/internal/cueexperiment/exp.go
index 63f5f98b8d3..c808e024d8d 100644
--- a/internal/cueexperiment/exp.go
+++ b/internal/cueexperiment/exp.go
@@ -9,7 +9,7 @@ import (
 // Flags holds the set of CUE_EXPERIMENT flags. It is initialized
 // by Init.
 var Flags struct {
-	Modules bool
+	Modules bool `envflag:"default:true"`
 
 	// YAMLV3Decoder swaps the old internal/third_party/yaml decoder with the new
 	// decoder implemented in internal/encoding/yaml on top of yaml.v3.
diff --git a/internal/cueexperiment/exp_test.go b/internal/cueexperiment/exp_test.go
index 1054a44d21c..ff4e390709b 100644
--- a/internal/cueexperiment/exp_test.go
+++ b/internal/cueexperiment/exp_test.go
@@ -13,7 +13,7 @@ func TestInit(t *testing.T) {
 	t.Setenv("CUE_EXPERIMENT", "")
 	err := initAlways()
 	qt.Assert(t, qt.IsNil(err))
-	qt.Assert(t, qt.IsFalse(Flags.Modules))
+	qt.Assert(t, qt.IsTrue(Flags.Modules))
 	qt.Assert(t, qt.IsTrue(Flags.YAMLV3Decoder))
 
 	// Check that we can enable all experiments.