diff --git a/.changeset/gold-trains-eat.md b/.changeset/gold-trains-eat.md
new file mode 100644
index 000000000..207c819a7
--- /dev/null
+++ b/.changeset/gold-trains-eat.md
@@ -0,0 +1,6 @@
+---
+'@astrojs/node': patch
+'astro': patch
+---
+
+Use a Node-specific image endpoint to resolve images in dev and Node SSR. This should fix many issues related to getting 404 from the \_image endpoint under certain configurations
diff --git a/packages/astro/package.json b/packages/astro/package.json
index afa6a47d7..4cdadee47 100644
--- a/packages/astro/package.json
+++ b/packages/astro/package.json
@@ -56,7 +56,7 @@
     "./components/*": "./components/*",
     "./assets": "./dist/assets/index.js",
     "./assets/utils": "./dist/assets/utils/index.js",
-    "./assets/image-endpoint": "./dist/assets/image-endpoint.js",
+    "./assets/endpoint/*": "./dist/assets/endpoint/*.js",
     "./assets/services/sharp": "./dist/assets/services/sharp.js",
     "./assets/services/squoosh": "./dist/assets/services/squoosh.js",
     "./assets/services/noop": "./dist/assets/services/noop.js",
diff --git a/packages/astro/src/assets/image-endpoint.ts b/packages/astro/src/assets/endpoint/generic.ts
similarity index 89%
rename from packages/astro/src/assets/image-endpoint.ts
rename to packages/astro/src/assets/endpoint/generic.ts
index b7f027536..140189fe0 100644
--- a/packages/astro/src/assets/image-endpoint.ts
+++ b/packages/astro/src/assets/endpoint/generic.ts
@@ -1,8 +1,8 @@
 import { isRemotePath } from '@astrojs/internal-helpers/path';
 import mime from 'mime/lite.js';
-import type { APIRoute } from '../@types/astro.js';
-import { getConfiguredImageService, isRemoteAllowed } from './internal.js';
-import { etag } from './utils/etag.js';
+import type { APIRoute } from '../../@types/astro.js';
+import { getConfiguredImageService, isRemoteAllowed } from '../internal.js';
+import { etag } from '../utils/etag.js';
 // @ts-expect-error
 import { imageConfig } from 'astro:assets';
 
@@ -40,7 +40,6 @@ export const GET: APIRoute = async ({ request }) => {
 
 		let inputBuffer: Buffer | undefined = undefined;
 
-		// TODO: handle config subpaths?
 		const sourceUrl = isRemotePath(transform.src)
 			? new URL(transform.src)
 			: new URL(transform.src, url.origin);
diff --git a/packages/astro/src/assets/endpoint/node.ts b/packages/astro/src/assets/endpoint/node.ts
new file mode 100644
index 000000000..1e9616264
--- /dev/null
+++ b/packages/astro/src/assets/endpoint/node.ts
@@ -0,0 +1,88 @@
+import { isRemotePath, removeQueryString } from '@astrojs/internal-helpers/path';
+import { readFile } from 'fs/promises';
+import mime from 'mime/lite.js';
+import type { APIRoute } from '../../@types/astro.js';
+import { getConfiguredImageService, isRemoteAllowed } from '../internal.js';
+import { etag } from '../utils/etag.js';
+// @ts-expect-error
+import { assetsDir, imageConfig } from 'astro:assets';
+
+async function loadLocalImage(src: string, url: URL) {
+	const filePath = import.meta.env.DEV
+		? removeQueryString(src.slice('/@fs'.length))
+		: new URL('.' + src, assetsDir);
+	let buffer: Buffer | undefined = undefined;
+
+	try {
+		buffer = await readFile(filePath);
+	} catch (e) {
+		const sourceUrl = new URL(src, url.origin);
+		buffer = await loadRemoteImage(sourceUrl);
+	}
+
+	return buffer;
+}
+
+async function loadRemoteImage(src: URL) {
+	try {
+		const res = await fetch(src);
+
+		if (!res.ok) {
+			return undefined;
+		}
+
+		return Buffer.from(await res.arrayBuffer());
+	} catch (err: unknown) {
+		return undefined;
+	}
+}
+
+/**
+ * Endpoint used in dev and SSR to serve optimized images by the base image services
+ */
+export const GET: APIRoute = async ({ request }) => {
+	try {
+		const imageService = await getConfiguredImageService();
+
+		if (!('transform' in imageService)) {
+			throw new Error('Configured image service is not a local service');
+		}
+
+		const url = new URL(request.url);
+		const transform = await imageService.parseURL(url, imageConfig);
+
+		if (!transform?.src) {
+			throw new Error('Incorrect transform returned by `parseURL`');
+		}
+
+		let inputBuffer: Buffer | undefined = undefined;
+
+		if (isRemotePath(transform.src)) {
+			if (isRemoteAllowed(transform.src, imageConfig) === false) {
+				return new Response('Forbidden', { status: 403 });
+			}
+
+			inputBuffer = await loadRemoteImage(new URL(transform.src));
+		} else {
+			inputBuffer = await loadLocalImage(transform.src, url);
+		}
+
+		if (!inputBuffer) {
+			return new Response('Not Found', { status: 404 });
+		}
+
+		const { data, format } = await imageService.transform(inputBuffer, transform, imageConfig);
+
+		return new Response(data, {
+			status: 200,
+			headers: {
+				'Content-Type': mime.getType(format) ?? `image/${format}`,
+				'Cache-Control': 'public, max-age=31536000',
+				ETag: etag(data.toString()),
+				Date: new Date().toUTCString(),
+			},
+		});
+	} catch (err: unknown) {
+		return new Response(`Server Error: ${err}`, { status: 500 });
+	}
+};
diff --git a/packages/astro/src/assets/internal.ts b/packages/astro/src/assets/internal.ts
index f6c3b0b52..9cb48f588 100644
--- a/packages/astro/src/assets/internal.ts
+++ b/packages/astro/src/assets/internal.ts
@@ -10,10 +10,11 @@ import type {
 } from './types.js';
 import { matchHostname, matchPattern } from './utils/remotePattern.js';
 
-export function injectImageEndpoint(settings: AstroSettings) {
-	const endpointEntrypoint = settings.config.image.endpoint ?? 'astro/assets/image-endpoint';
+export function injectImageEndpoint(settings: AstroSettings, mode: 'dev' | 'build') {
+	const endpointEntrypoint =
+		settings.config.image.endpoint ??
+		(mode === 'dev' ? 'astro/assets/endpoint/node' : 'astro/assets/endpoint/generic');
 
-	// TODO: Add a setting to disable the image endpoint
 	settings.injectedRoutes.push({
 		pattern: '/_image',
 		entryPoint: endpointEntrypoint,
diff --git a/packages/astro/src/assets/vite-plugin-assets.ts b/packages/astro/src/assets/vite-plugin-assets.ts
index 9c95b6dc4..fd3ca2c32 100644
--- a/packages/astro/src/assets/vite-plugin-assets.ts
+++ b/packages/astro/src/assets/vite-plugin-assets.ts
@@ -10,6 +10,7 @@ import {
 	prependForwardSlash,
 	removeQueryString,
 } from '../core/path.js';
+import { isServerLikeOutput } from '../prerender/utils.js';
 import { VALID_INPUT_FORMATS, VIRTUAL_MODULE_ID, VIRTUAL_SERVICE_ID } from './consts.js';
 import { emitESMImage } from './utils/emitAsset.js';
 import { hashTransform, propsToFilename } from './utils/transformToPath.js';
@@ -58,6 +59,13 @@ export default function assets({
 					export { default as Image } from "astro/components/Image.astro";
 
 					export const imageConfig = ${JSON.stringify(settings.config.image)};
+					export const assetsDir = new URL(${JSON.stringify(
+						new URL(
+							isServerLikeOutput(settings.config)
+								? settings.config.build.client
+								: settings.config.outDir
+						)
+					)});
 					export const getImage = async (options) => await getImageInternal(options, imageConfig);
 				`;
 				}
diff --git a/packages/astro/src/core/build/index.ts b/packages/astro/src/core/build/index.ts
index aefea5080..5f5ae69a1 100644
--- a/packages/astro/src/core/build/index.ts
+++ b/packages/astro/src/core/build/index.ts
@@ -111,7 +111,7 @@ class AstroBuilder {
 		});
 
 		if (isServerLikeOutput(this.settings.config)) {
-			this.settings = injectImageEndpoint(this.settings);
+			this.settings = injectImageEndpoint(this.settings, 'build');
 		}
 
 		this.manifest = createRouteManifest({ settings: this.settings }, this.logger);
diff --git a/packages/astro/src/core/dev/container.ts b/packages/astro/src/core/dev/container.ts
index 52dd4c1a4..6cc5713f2 100644
--- a/packages/astro/src/core/dev/container.ts
+++ b/packages/astro/src/core/dev/container.ts
@@ -50,7 +50,7 @@ export async function createContainer({
 		isRestart,
 	});
 
-	settings = injectImageEndpoint(settings);
+	settings = injectImageEndpoint(settings, 'dev');
 
 	const {
 		base,
diff --git a/packages/astro/test/core-image.test.js b/packages/astro/test/core-image.test.js
index a6ee4342c..653ad5dfd 100644
--- a/packages/astro/test/core-image.test.js
+++ b/packages/astro/test/core-image.test.js
@@ -180,8 +180,6 @@ describe('astro:image', () => {
 				let html = await res.text();
 				$ = cheerio.load(html);
 
-				console.log(html);
-
 				let $img = $('img');
 				expect($img).to.have.a.lengthOf(1);
 
@@ -854,17 +852,14 @@ describe('astro:image', () => {
 				output: 'server',
 				adapter: testAdapter(),
 				image: {
+					endpoint: 'astro/assets/endpoint/node',
 					service: testImageService(),
 				},
 			});
 			await fixture.build();
 		});
 
-		// TODO
-		// This is not working because the image service does a fetch() on the underlying
-		// image and we do not have an HTTP server in these tests. We either need
-		// to start one, or find another way to tell the image service how to load these files.
-		it.skip('dynamic route images are built at response time', async () => {
+		it('dynamic route images are built at response time sss', async () => {
 			const app = await fixture.loadTestAdapterApp();
 			let request = new Request('http://example.com/');
 			let response = await app.render(request);
diff --git a/packages/integrations/node/src/index.ts b/packages/integrations/node/src/index.ts
index 5978371e4..1f3707949 100644
--- a/packages/integrations/node/src/index.ts
+++ b/packages/integrations/node/src/index.ts
@@ -30,8 +30,11 @@ export default function createIntegration(userOptions: UserOptions): AstroIntegr
 	return {
 		name: '@astrojs/node',
 		hooks: {
-			'astro:config:setup': ({ updateConfig }) => {
+			'astro:config:setup': ({ updateConfig, config }) => {
 				updateConfig({
+					image: {
+						endpoint: config.image.endpoint ?? 'astro/assets/endpoint/node',
+					},
 					vite: {
 						ssr: {
 							noExternal: ['@astrojs/node'],