diff --git a/packages/nuxt/README.md b/packages/nuxt/README.md
index df41599e45b9..b16d555a3648 100644
--- a/packages/nuxt/README.md
+++ b/packages/nuxt/README.md
@@ -37,21 +37,23 @@ functionality related to Nuxt.
 
 **What is partly working:**
 
+- Source Maps
+- Connected Tracing (Frontend & Backend)
 - Tracing by setting `tracesSampleRate`
   - UI (Vue) traces
   - HTTP (Node) traces
 
-**What is not yet(!) included:**
-
-- Source Maps
-- Nuxt-specific traces and connecting frontend & backend traces
-
 **Known Issues:**
 
-- When adding `sentry.server.config.(ts/js)`, you get this error: "Failed to register ESM hook", but the application
-  will still work
-- When initializing Sentry on the server with `instrument.server.(js|ts)`, you get an `'import-in-the-middle'` error,
-  and the application won't work
+- When adding `sentry.server.config.(ts/js)`, you get an error like this:
+  "`Failed to register ESM hook (import-in-the-middle/hook.mjs)`". You can add a resolution for `@vercel/nft` to fix
+  this. This will add the `hook.mjs` file to your build output
+  ([issue here](https://github.com/unjs/nitro/issues/2703)).
+  ```json
+    "resolutions": {
+      "@vercel/nft": "^0.27.4"
+    }
+  ```
 
 ## Automatic Setup
 
@@ -93,16 +95,18 @@ export default defineNuxtConfig({
 Add a `sentry.client.config.(js|ts)` file to the root of your project:
 
 ```javascript
+import { useRuntimeConfig } from '#imports';
 import * as Sentry from '@sentry/nuxt';
 
 Sentry.init({
-  dsn: process.env.SENTRY_DSN,
+  // If set up, you can use your runtime config here
+  dsn: useRuntimeConfig().public.sentry.dsn,
 });
 ```
 
 ### 4. Server-side setup
 
-Add an `instrument.server.mjs` file to your `public` folder:
+Add an `sentry.client.config.(js|ts)` file to the root of your project:
 
 ```javascript
 import * as Sentry from '@sentry/nuxt';
@@ -110,18 +114,38 @@ import * as Sentry from '@sentry/nuxt';
 // Only run `init` when process.env.SENTRY_DSN is available.
 if (process.env.SENTRY_DSN) {
   Sentry.init({
-    dsn: process.env.SENTRY_DSN,
+    dsn: 'your-dsn',
   });
 }
 ```
 
-Add an import flag to the `NODE_OPTIONS` of your preview script in the `package.json` file, so the file loads before any
-other imports:
+The Nuxt runtime config does not work in the Sentry server to technical reasons (it has to be loaded before Nuxt is
+loaded). To be able to use `process.env` you either have to add `--env-file=.env` to your node command
+
+```bash
+node --env-file=.env --import ./.output/server/sentry.server.config.mjs .output/server/index.mjs
+```
+
+or use the `dotenv` package:
+
+```javascript
+import dotenv from 'dotenv';
+import * as Sentry from '@sentry/nuxt';
+
+dotenv.config();
+
+Sentry.init({
+  dsn: process.env.SENTRY_DSN,
+});
+```
+
+Add an import flag to the Node options of your `node` command (not `nuxt preview`), so the file loads before any other
+imports (keep in mind the `.mjs` file ending):
 
 ```json
 {
   "scripts": {
-    "preview": "NODE_OPTIONS='--import ./public/instrument.server.mjs' nuxt preview"
+    "start": "node --import ./.output/server/sentry.server.config.mjs .output/server/index.mjs"
   }
 }
 ```
diff --git a/packages/nuxt/src/common/types.ts b/packages/nuxt/src/common/types.ts
index 08dc0d2b805e..5fbe68bd89cb 100644
--- a/packages/nuxt/src/common/types.ts
+++ b/packages/nuxt/src/common/types.ts
@@ -99,4 +99,16 @@ export type SentryNuxtModuleOptions = {
    * Enabling this will give you, for example, logs about source maps.
    */
   debug?: boolean;
+
+  /**
+   * Enabling basic server tracing can be used for environments where modifying the node option `--import` is not possible.
+   * However, enabling this option only supports limited tracing instrumentation. Only http traces will be collected (but no database-specific traces etc.).
+   *
+   * If this option is `true`, the Sentry SDK will import the Sentry server config at the top of the server entry file to load the SDK on the server.
+   *
+   * **DO NOT** enable this option if you've already added the node option `--import` in your node start script. This would initialize Sentry twice on the server-side and leads to unexpected issues.
+   *
+   * @default false
+   */
+  experimental_basicServerTracing?: boolean;
 };
diff --git a/packages/nuxt/src/module.ts b/packages/nuxt/src/module.ts
index faa48e5c3c26..0afdeaa03de7 100644
--- a/packages/nuxt/src/module.ts
+++ b/packages/nuxt/src/module.ts
@@ -1,6 +1,6 @@
 import { addPlugin, addPluginTemplate, addServerPlugin, createResolver, defineNuxtModule } from '@nuxt/kit';
 import type { SentryNuxtModuleOptions } from './common/types';
-import { addServerConfigToBuild } from './vite/addServerConfig';
+import { addSentryTopImport, addServerConfigToBuild } from './vite/addServerConfig';
 import { setupSourceMaps } from './vite/sourceMaps';
 import { findDefaultSdkInitFile } from './vite/utils';
 
@@ -62,15 +62,20 @@ export default defineNuxtModule<ModuleOptions>({
     if (clientConfigFile || serverConfigFile) {
       setupSourceMaps(moduleOptions, nuxt);
     }
-    if (serverConfigFile && serverConfigFile.includes('.server.config')) {
-      if (moduleOptions.debug) {
-        // eslint-disable-next-line no-console
-        console.log(
-          `[Sentry] Using your \`${serverConfigFile}\` file for the server-side Sentry configuration. In case you have a \`public/instrument.server\` file, the \`public/instrument.server\` file will be ignored. Make sure the file path in your node \`--import\` option matches the Sentry server config file in your \`.output\` folder and has a \`.mjs\` extension.`,
-        );
-      }
 
+    if (serverConfigFile && serverConfigFile.includes('.server.config')) {
       addServerConfigToBuild(moduleOptions, nuxt, serverConfigFile);
+
+      if (moduleOptions.experimental_basicServerTracing) {
+        addSentryTopImport(moduleOptions, nuxt);
+      } else {
+        if (moduleOptions.debug) {
+          // eslint-disable-next-line no-console
+          console.log(
+            `[Sentry] Using your \`${serverConfigFile}\` file for the server-side Sentry configuration. In case you have a \`public/instrument.server\` file, the \`public/instrument.server\` file will be ignored. Make sure the file path in your node \`--import\` option matches the Sentry server config file in your \`.output\` folder and has a \`.mjs\` extension.`,
+          );
+        }
+      }
     }
   },
 });
diff --git a/packages/nuxt/src/vite/addServerConfig.ts b/packages/nuxt/src/vite/addServerConfig.ts
index dc1fc21dd6bd..dee15ee34dce 100644
--- a/packages/nuxt/src/vite/addServerConfig.ts
+++ b/packages/nuxt/src/vite/addServerConfig.ts
@@ -1,5 +1,4 @@
 import * as fs from 'fs';
-import * as path from 'path';
 import { createResolver } from '@nuxt/kit';
 import type { Nuxt } from '@nuxt/schema';
 import type { SentryNuxtModuleOptions } from '../common/types';
@@ -30,8 +29,9 @@ export function addServerConfigToBuild(
      * This is necessary because we need to reference this file path in the node --import option.
      */
     nuxt.hook('close', async () => {
-      const source = path.resolve('.nuxt/dist/server/sentry.server.config.mjs');
-      const destination = path.resolve('.output/server/sentry.server.config.mjs');
+      const rootDirResolver = createResolver(nuxt.options.rootDir);
+      const source = rootDirResolver.resolve('.nuxt/dist/server/sentry.server.config.mjs');
+      const destination = rootDirResolver.resolve('.output/server/sentry.server.config.mjs');
 
       try {
         await fs.promises.access(source, fs.constants.F_OK);
@@ -55,3 +55,38 @@ export function addServerConfigToBuild(
     });
   });
 }
+
+/**
+ *  Adds the Sentry server config import at the top of the server entry file to load the SDK on the server.
+ *  This is necessary for environments where modifying the node option `--import` is not possible.
+ *  However, only limited tracing instrumentation is supported when doing this.
+ */
+export function addSentryTopImport(moduleOptions: SentryNuxtModuleOptions, nuxt: Nuxt): void {
+  nuxt.hook('close', async () => {
+    const rootDirResolver = createResolver(nuxt.options.rootDir);
+    const entryFilePath = rootDirResolver.resolve('.output/server/index.mjs');
+
+    try {
+      fs.readFile(entryFilePath, 'utf8', (err, data) => {
+        const updatedContent = `import './sentry.server.config.mjs';\n${data}`;
+
+        fs.writeFile(entryFilePath, updatedContent, 'utf8', () => {
+          if (moduleOptions.debug) {
+            // eslint-disable-next-line no-console
+            console.log(
+              `[Sentry] Successfully added the Sentry import to the server entry file "\`${entryFilePath}\`"`,
+            );
+          }
+        });
+      });
+    } catch (err) {
+      if (moduleOptions.debug) {
+        // eslint-disable-next-line no-console
+        console.warn(
+          `[Sentry] An error occurred when trying to add the Sentry import to the server entry file "\`${entryFilePath}\`":`,
+          err,
+        );
+      }
+    }
+  });
+}