diff --git a/packages/vite/src/waku-lib/build-server.ts b/packages/vite/src/waku-lib/build-server.ts
index ea63c97b12f4..2ff6dfe70201 100644
--- a/packages/vite/src/waku-lib/build-server.ts
+++ b/packages/vite/src/waku-lib/build-server.ts
@@ -1,4 +1,6 @@
 // TODO (RSC) Take ownership of this file and move it out ouf the waku-lib folder
+import path from 'node:path'
+
 import react from '@vitejs/plugin-react'
 import { build as viteBuild } from 'vite'
 
@@ -12,14 +14,6 @@ export async function serverBuild(
   serverEntryFiles: Record<string, string>,
   customModules: Record<string, string>
 ) {
-  // const noExternal = Array.from(clientEntryFileSet).map(
-  //   // FIXME this might not work with pnpm
-  //   (fname) =>
-  //     path
-  //       .relative(path.join(config.root, "node_modules"), fname)
-  //       .split("/")[0]!
-  // );
-  //
   const input = {
     entries: entriesFile,
     ...clientEntryFiles,
@@ -35,19 +29,30 @@ export async function serverBuild(
     // ...configFileConfig,
     root: rwPaths.web.base,
     ssr: {
-      // Externalize everything except files that have 'use client' in them
-      // (this includes packages in node_modules that you use that have
-      // 'use client' in them)
+      // Externalize everything except packages with files that have
+      // 'use client' in them
       // Files included in `noExternal` are files we want Vite to analyze
-      noExternal: Object.values(clientEntryFiles),
-      // TODO (RSC) This is the original code from waku. I think we can simplify it as above
-      // The code below will for most basic cases just be `[ '..' ]`, which we
-      // believe to be overly broad
-      // noExternal: Object.values(clientEntryFiles).map((fname) => {
-      //   return path
-      //     .relative(path.join(rwPaths.base, 'node_modules'), fname)
-      //     .split('/')[0]
-      // }),
+      // The values in the array here are compared to npm package names, like
+      // 'react', 'core-js', @anthropic-ai/sdk', @redwoodjs/vite', etc
+      // The map function below will return '..' for local files. That's not
+      // very pretty, but it works. It just won't match anything.
+      noExternal: Object.values(clientEntryFiles).map((fname) => {
+        const relativePath = path.relative(
+          path.join(rwPaths.base, 'node_modules'),
+          fname
+        )
+        const splitPath = relativePath.split('/')
+
+        // TODO (RSC): Verify this is correct. Need to find a scoped packages
+        // that uses 'use client'
+        // Handle scoped packages
+        if (relativePath.startsWith('@')) {
+          return splitPath[0] + '/' + splitPath[1]
+        }
+
+        // Packages without scope
+        return splitPath[0]
+      }),
     },
     plugins: [react()],
     resolve: {
diff --git a/packages/vite/src/waku-lib/builder.ts b/packages/vite/src/waku-lib/builder.ts
index f8374ddb47cb..95acfac199d7 100644
--- a/packages/vite/src/waku-lib/builder.ts
+++ b/packages/vite/src/waku-lib/builder.ts
@@ -49,6 +49,7 @@ export async function build() {
       ),
     ],
     ssr: {
+      // TODO (RSC): Is this still relevant?
       // FIXME Without this, waku/router isn't considered to have client
       // entries, and "No client entry" error occurs.
       // Unless we fix this, RSC-capable packages aren't supported.
diff --git a/packages/vite/src/waku-lib/rsc-handler-worker.ts b/packages/vite/src/waku-lib/rsc-handler-worker.ts
index f52971d87f6b..c1e1cb7d0617 100644
--- a/packages/vite/src/waku-lib/rsc-handler-worker.ts
+++ b/packages/vite/src/waku-lib/rsc-handler-worker.ts
@@ -238,12 +238,15 @@ const resolveClientEntry = (
   filePath: string
 ) => {
   const clientEntry = absoluteClientEntries[filePath]
+
   if (!clientEntry) {
     if (absoluteClientEntries['*'] === '*') {
       return config.base + path.relative(config.root, filePath)
     }
+
     throw new Error('No client entry found for ' + filePath)
   }
+
   return clientEntry
 }