diff --git a/packages/vite/src/plugins/plugin.spec.ts b/packages/vite/src/plugins/plugin.spec.ts
index ed3d79d3cdd9b..1b3a9334f74b7 100644
--- a/packages/vite/src/plugins/plugin.spec.ts
+++ b/packages/vite/src/plugins/plugin.spec.ts
@@ -41,6 +41,7 @@ describe('@nx/vite/plugin', () => {
 
     afterEach(() => {
       jest.resetModules();
+      tempFs.cleanup();
     });
 
     it('should create nodes', async () => {
@@ -113,6 +114,7 @@ describe('@nx/vite/plugin', () => {
 
     afterEach(() => {
       jest.resetModules();
+      tempFs.cleanup();
     });
 
     it('should create nodes', async () => {
@@ -171,8 +173,152 @@ describe('@nx/vite/plugin', () => {
       );
 
       expect(nodes).toMatchSnapshot();
+      tempFs.cleanup();
+    });
+    it('should not exclude serve and preview targets when vite.config.ts is in library mode when user has defined a server config', async () => {
+      const tempFs = new TempFs('test-exclude');
+      (loadViteDynamicImport as jest.Mock).mockResolvedValue({
+        resolveConfig: jest.fn().mockResolvedValue({
+          build: {
+            lib: {
+              entry: 'index.ts',
+              name: 'my-lib',
+            },
+          },
+          server: {},
+        }),
+      }),
+        (context = {
+          configFiles: [],
+          nxJsonConfiguration: {
+            namedInputs: {
+              default: ['{projectRoot}/**/*'],
+              production: ['!{projectRoot}/**/*.spec.ts'],
+            },
+          },
+          workspaceRoot: tempFs.tempDir,
+        });
+      tempFs.createFileSync(
+        'my-lib/project.json',
+        JSON.stringify({ name: 'my-lib' })
+      );
+      tempFs.createFileSync('my-lib/vite.config.ts', '');
 
-      jest.resetModules();
+      const nodes = await createNodesFunction(
+        ['my-lib/vite.config.ts'],
+        {
+          buildTargetName: 'build',
+          serveTargetName: 'serve',
+          previewTargetName: 'preview',
+        },
+        context
+      );
+
+      expect(nodes).toMatchInlineSnapshot(`
+        [
+          [
+            "my-lib/vite.config.ts",
+            {
+              "projects": {
+                "my-lib": {
+                  "metadata": {},
+                  "projectType": "library",
+                  "root": "my-lib",
+                  "targets": {
+                    "build": {
+                      "cache": true,
+                      "command": "vite build",
+                      "dependsOn": [
+                        "^build",
+                      ],
+                      "inputs": [
+                        "production",
+                        "^production",
+                        {
+                          "externalDependencies": [
+                            "vite",
+                          ],
+                        },
+                      ],
+                      "metadata": {
+                        "description": "Run Vite build",
+                        "help": {
+                          "command": "npx vite build --help",
+                          "example": {
+                            "options": {
+                              "manifest": "manifest.json",
+                              "sourcemap": true,
+                            },
+                          },
+                        },
+                        "technologies": [
+                          "vite",
+                        ],
+                      },
+                      "options": {
+                        "cwd": "my-lib",
+                      },
+                      "outputs": [
+                        "{workspaceRoot}/dist/{projectRoot}",
+                      ],
+                    },
+                    "preview": {
+                      "command": "vite preview",
+                      "dependsOn": [
+                        "build",
+                      ],
+                      "metadata": {
+                        "description": "Locally preview Vite production build",
+                        "help": {
+                          "command": "npx vite preview --help",
+                          "example": {
+                            "options": {
+                              "port": 3000,
+                            },
+                          },
+                        },
+                        "technologies": [
+                          "vite",
+                        ],
+                      },
+                      "options": {
+                        "cwd": "my-lib",
+                      },
+                    },
+                    "serve": {
+                      "command": "vite serve",
+                      "metadata": {
+                        "description": "Starts Vite dev server",
+                        "help": {
+                          "command": "npx vite --help",
+                          "example": {
+                            "options": {
+                              "port": 3000,
+                            },
+                          },
+                        },
+                        "technologies": [
+                          "vite",
+                        ],
+                      },
+                      "options": {
+                        "cwd": "my-lib",
+                      },
+                    },
+                    "serve-static": {
+                      "executor": "@nx/web:file-server",
+                      "options": {
+                        "buildTarget": "build",
+                        "spa": true,
+                      },
+                    },
+                  },
+                },
+              },
+            },
+          ],
+        ]
+      `);
     });
   });
 });
diff --git a/packages/vite/src/plugins/plugin.ts b/packages/vite/src/plugins/plugin.ts
index 2575e392c1625..ae11ebe9ff6a7 100644
--- a/packages/vite/src/plugins/plugin.ts
+++ b/packages/vite/src/plugins/plugin.ts
@@ -109,12 +109,13 @@ async function createNodesInternal(
       [getLockFileName(detectPackageManager(context.workspaceRoot))]
     )) + configFilePath;
 
-  targetsCache[hash] ??= await buildViteTargets(
+  const { isLibrary, ...viteTargets } = await buildViteTargets(
     configFilePath,
     projectRoot,
     normalizedOptions,
     context
   );
+  targetsCache[hash] ??= viteTargets;
 
   const { targets, metadata } = targetsCache[hash];
   const project: ProjectConfiguration = {
@@ -126,9 +127,7 @@ async function createNodesInternal(
   // If project is buildable, then the project type.
   // If it is not buildable, then leave it to other plugins/project.json to set the project type.
   if (project.targets[options.buildTargetName]) {
-    project.projectType = project.targets[options.serveTargetName]
-      ? 'application'
-      : 'library';
+    project.projectType = isLibrary ? 'library' : 'application';
   }
 
   return {
@@ -143,7 +142,7 @@ async function buildViteTargets(
   projectRoot: string,
   options: VitePluginOptions,
   context: CreateNodesContext
-): Promise<ViteTargets> {
+): Promise<ViteTargets & { isLibrary: boolean }> {
   const absoluteConfigFilePath = joinPathFragments(
     context.workspaceRoot,
     configFilePath
@@ -157,7 +156,7 @@ async function buildViteTargets(
     // do nothing
   }
   const { resolveConfig } = await loadViteDynamicImport();
-  const viteConfig = await resolveConfig(
+  const viteBuildConfig = await resolveConfig(
     {
       configFile: absoluteConfigFilePath,
       mode: 'development',
@@ -165,11 +164,8 @@ async function buildViteTargets(
     'build'
   );
 
-  const { buildOutputs, testOutputs, hasTest, isBuildable } = getOutputs(
-    viteConfig,
-    projectRoot,
-    context.workspaceRoot
-  );
+  const { buildOutputs, testOutputs, hasTest, isBuildable, hasServeConfig } =
+    getOutputs(viteBuildConfig, projectRoot, context.workspaceRoot);
 
   const namedInputs = getNamedInputs(projectRoot, context);
 
@@ -177,7 +173,8 @@ async function buildViteTargets(
 
   // If file is not vitest.config and buildable, create targets for build, serve, preview and serve-static
   const hasRemixPlugin =
-    viteConfig.plugins && viteConfig.plugins.some((p) => p.name === 'remix');
+    viteBuildConfig.plugins &&
+    viteBuildConfig.plugins.some((p) => p.name === 'remix');
   if (
     !configFilePath.includes('vitest.config') &&
     !hasRemixPlugin &&
@@ -191,7 +188,7 @@ async function buildViteTargets(
     );
 
     // If running in library mode, then there is nothing to serve.
-    if (!viteConfig.build?.lib) {
+    if (!viteBuildConfig.build?.lib || hasServeConfig) {
       targets[options.serveTargetName] = serveTarget(projectRoot);
       targets[options.previewTargetName] = previewTarget(
         projectRoot,
@@ -211,7 +208,7 @@ async function buildViteTargets(
   }
 
   const metadata = {};
-  return { targets, metadata };
+  return { targets, metadata, isLibrary: Boolean(viteBuildConfig.build?.lib) };
 }
 
 async function buildTarget(
@@ -349,7 +346,7 @@ function serveStaticTarget(options: VitePluginOptions) {
 }
 
 function getOutputs(
-  viteConfig: Record<string, any> | undefined,
+  viteBuildConfig: Record<string, any> | undefined,
   projectRoot: string,
   workspaceRoot: string
 ): {
@@ -357,8 +354,9 @@ function getOutputs(
   testOutputs: string[];
   hasTest: boolean;
   isBuildable: boolean;
+  hasServeConfig: boolean;
 } {
-  const { build, test } = viteConfig;
+  const { build, test, server } = viteBuildConfig;
 
   const buildOutputPath = normalizeOutputPath(
     build?.outDir,
@@ -372,6 +370,8 @@ function getOutputs(
     build?.rollupOptions?.input ||
     existsSync(join(workspaceRoot, projectRoot, 'index.html'));
 
+  const hasServeConfig = Boolean(server);
+
   const reportsDirectoryPath = normalizeOutputPath(
     test?.coverage?.reportsDirectory,
     projectRoot,
@@ -384,6 +384,7 @@ function getOutputs(
     testOutputs: [reportsDirectoryPath],
     hasTest: !!test,
     isBuildable,
+    hasServeConfig,
   };
 }