diff --git a/.changeset/poor-carpets-take.md b/.changeset/poor-carpets-take.md
new file mode 100644
index 000000000..7931844c9
--- /dev/null
+++ b/.changeset/poor-carpets-take.md
@@ -0,0 +1,5 @@
+---
+'sv': patch
+---
+
+feat(demo): include file extensions for local imports
diff --git a/packages/create/scripts/build-templates.js b/packages/create/scripts/build-templates.js
index dccdc8ec7..d348d32de 100644
--- a/packages/create/scripts/build-templates.js
+++ b/packages/create/scripts/build-templates.js
@@ -21,6 +21,9 @@ async function convert_typescript(content) {
 	// sucrase leaves invalid class fields intact
 	code = code.replace(/^\s*[a-z]+;$/gm, '');
 
+	// Replace "local import" that ends with ".ts" to ".js"
+	code = code.replace(/import (.+?) from ['"](.+?)\.ts['"]/g, 'import $1 from "$2.js"');
+
 	// Prettier strips 'unnecessary' parens from .ts files, we need to hack them back in
 	code = code.replace(/(\/\*\* @type.+? \*\/) (.+?) \/\*\*\*\//g, '$1($2)');
 
diff --git a/packages/create/shared/+library+typescript/tsconfig.json b/packages/create/shared/+library+typescript/tsconfig.json
index 6f788f160..371777edd 100644
--- a/packages/create/shared/+library+typescript/tsconfig.json
+++ b/packages/create/shared/+library+typescript/tsconfig.json
@@ -1,6 +1,7 @@
 {
 	"extends": "./.svelte-kit/tsconfig.json",
 	"compilerOptions": {
+		"allowImportingTsExtensions": true,
 		"allowJs": true,
 		"checkJs": true,
 		"esModuleInterop": true,
diff --git a/packages/create/shared/+typescript/tsconfig.json b/packages/create/shared/+typescript/tsconfig.json
index a5567ee6b..5a3b413ed 100644
--- a/packages/create/shared/+typescript/tsconfig.json
+++ b/packages/create/shared/+typescript/tsconfig.json
@@ -1,6 +1,7 @@
 {
 	"extends": "./.svelte-kit/tsconfig.json",
 	"compilerOptions": {
+		"allowImportingTsExtensions": true,
 		"allowJs": true,
 		"checkJs": true,
 		"esModuleInterop": true,
diff --git a/packages/create/templates/demo/src/routes/sverdle/+page.server.ts b/packages/create/templates/demo/src/routes/sverdle/+page.server.ts
index 0f52fe8d6..4a24244f2 100644
--- a/packages/create/templates/demo/src/routes/sverdle/+page.server.ts
+++ b/packages/create/templates/demo/src/routes/sverdle/+page.server.ts
@@ -1,5 +1,5 @@
 import { fail } from '@sveltejs/kit';
-import { Game } from './game';
+import { Game } from './game.ts';
 import type { PageServerLoad, Actions } from './$types';
 
 /** @satisfies {import('./$types').PageServerLoad} */
diff --git a/packages/create/templates/demo/src/routes/sverdle/game.ts b/packages/create/templates/demo/src/routes/sverdle/game.ts
index d5cbe932e..1dba04031 100644
--- a/packages/create/templates/demo/src/routes/sverdle/game.ts
+++ b/packages/create/templates/demo/src/routes/sverdle/game.ts
@@ -1,4 +1,4 @@
-import { words, allowed } from './words.server';
+import { words, allowed } from './words.server.ts';
 
 export class Game {
 	index: number;
diff --git a/packages/create/templates/demo/tsconfig.json b/packages/create/templates/demo/tsconfig.json
index 81ff9770c..8b726c486 100644
--- a/packages/create/templates/demo/tsconfig.json
+++ b/packages/create/templates/demo/tsconfig.json
@@ -1,3 +1,6 @@
 {
-	"extends": "./.svelte-kit/tsconfig.json"
+	"extends": "./.svelte-kit/tsconfig.json",
+	"compilerOptions": {
+		"allowImportingTsExtensions": true
+	}
 }
diff --git a/packages/create/test/check.ts b/packages/create/test/check.ts
index f2e459c5d..a370ae69e 100644
--- a/packages/create/test/check.ts
+++ b/packages/create/test/check.ts
@@ -3,7 +3,7 @@ import path from 'node:path';
 import { promisify } from 'node:util';
 import { fileURLToPath } from 'node:url';
 import { exec, type PromiseWithChild } from 'node:child_process';
-import { beforeAll, describe, test } from 'vitest';
+import { beforeAll, describe, expect, test } from 'vitest';
 import { create, type LanguageType, type TemplateType } from '../index.ts';
 
 // Resolve the given path relative to the current file
@@ -57,6 +57,17 @@ for (const template of templates) {
 			tests.push([`${template}-${types}`, () => exec_async(`pnpm ${script}`, { cwd })]);
 			script_test_map.set(script, tests);
 		}
+
+		if (template === 'demo') {
+			describe(`local import with extentions`, () => {
+				test(`${template}-${types}`, () => {
+					const ending = types === 'typescript' ? 'ts' : 'js';
+					const gameFile = path.join(cwd, `src/routes/sverdle/game.${ending}`);
+					const gameFileContent = fs.readFileSync(gameFile, 'utf-8');
+					expect(gameFileContent).toContain(`./words.server.${ending}`);
+				});
+			});
+		}
 	}
 }