diff --git a/packages/playwright/src/common/configLoader.ts b/packages/playwright/src/common/configLoader.ts
index 59ba309b2e..08a9c0a48d 100644
--- a/packages/playwright/src/common/configLoader.ts
+++ b/packages/playwright/src/common/configLoader.ts
@@ -334,25 +334,33 @@ export async function loadEmptyConfigForMergeReports() {
 }
 
 export function restartWithExperimentalTsEsm(configFile: string | undefined, force: boolean = false): boolean {
-  const nodeVersion = +process.versions.node.split('.')[0];
-  // New experimental loader is only supported on Node 16+.
-  if (nodeVersion < 16)
-    return false;
-  if (!configFile && !force)
-    return false;
+  // Opt-out switch.
   if (process.env.PW_DISABLE_TS_ESM)
     return false;
-  // Node.js < 20
+
+  // There are two esm loader APIs:
+  // - Older API that needs a process restart. Available in Node 16, 17, and non-latest 18, 19 and 20.
+  // - Newer API that works in-process. Available in Node 21+ and latest 18, 19 and 20.
+
+  // First check whether we have already restarted with the ESM loader from the older API.
   if ((globalThis as any).__esmLoaderPortPreV20) {
     // clear execArgv after restart, so that childProcess.fork in user code does not inherit our loader.
     process.execArgv = execArgvWithoutExperimentalLoaderOptions();
     return false;
   }
-  if (!force && !fileIsModule(configFile!))
-    return false;
 
-  // Node.js < 20
+  // Now check for the newer API presence.
   if (!require('node:module').register) {
+    // Older API is experimental, only supported on Node 16+.
+    const nodeVersion = +process.versions.node.split('.')[0];
+    if (nodeVersion < 16)
+      return false;
+
+    // With older API requiring a process restart, do so conditionally on the config.
+    const configIsModule = !!configFile && fileIsModule(configFile);
+    if (!force && !configIsModule)
+      return false;
+
     const innerProcess = (require('child_process') as typeof import('child_process')).fork(require.resolve('../../cli'), process.argv.slice(2), {
       env: {
         ...process.env,
@@ -367,7 +375,8 @@ export function restartWithExperimentalTsEsm(configFile: string | undefined, for
     });
     return true;
   }
-  // Nodejs >= 21
+
+  // With the newer API, always enable the ESM loader, because it does not need a restart.
   registerESMLoader();
   return false;
 }
diff --git a/tests/playwright-test/esm.spec.ts b/tests/playwright-test/esm.spec.ts
index 7097659d0d..ff542f212e 100644
--- a/tests/playwright-test/esm.spec.ts
+++ b/tests/playwright-test/esm.spec.ts
@@ -552,7 +552,9 @@ test('should load cjs config and test in non-ESM mode', async ({ runInlineTest }
   expect(result.passed).toBe(2);
 });
 
-test('should disallow ESM when config is cjs', async ({ runInlineTest }) => {
+test('should allow ESM when config is cjs', async ({ runInlineTest, nodeVersion }) => {
+  test.skip(nodeVersion.major < 18, 'ESM loader is enabled conditionally with older API');
+
   const result = await runInlineTest({
     'package.json': `{ "type": "module" }`,
     'playwright.config.cjs': `
@@ -567,8 +569,24 @@ test('should disallow ESM when config is cjs', async ({ runInlineTest }) => {
     `,
   });
 
-  expect(result.exitCode).toBe(1);
-  expect(result.output).toContain('Unknown file extension ".ts"');
+  expect(result.exitCode).toBe(0);
+  expect(result.passed).toBe(1);
+});
+
+test('should load mts without config', async ({ runInlineTest, nodeVersion }) => {
+  test.skip(nodeVersion.major < 18, 'ESM loader is enabled conditionally with older API');
+
+  const result = await runInlineTest({
+    'a.test.mts': `
+      import { test, expect } from '@playwright/test';
+      test('check project name', ({}, testInfo) => {
+        expect(true).toBe(true);
+      });
+    `,
+  });
+
+  expect(result.exitCode).toBe(0);
+  expect(result.passed).toBe(1);
 });
 
 test('should be able to use use execSync with a Node.js file inside a spec', async ({ runInlineTest }) => {