diff --git a/packages/angular/build/src/builders/unit-test/runners/vitest/build-options.ts b/packages/angular/build/src/builders/unit-test/runners/vitest/build-options.ts
index 7129ea4fff54..756037b1e390 100644
--- a/packages/angular/build/src/builders/unit-test/runners/vitest/build-options.ts
+++ b/packages/angular/build/src/builders/unit-test/runners/vitest/build-options.ts
@@ -98,6 +98,20 @@ export async function getVitestBuildOptions(
     workspaceRoot,
     removeTestExtension: true,
   });
+
+  if (options.setupFiles?.length) {
+    const setupEntryPoints = getTestEntrypoints(options.setupFiles, {
+      projectSourceRoot,
+      workspaceRoot,
+      removeTestExtension: false,
+      prefix: 'setup',
+    });
+
+    for (const [entryPoint, setupFile] of setupEntryPoints) {
+      entryPoints.set(entryPoint, setupFile);
+    }
+  }
+
   entryPoints.set('init-testbed', 'angular:test-bed-init');
 
   // The 'vitest' package is always external for testing purposes
diff --git a/packages/angular/build/src/builders/unit-test/runners/vitest/executor.ts b/packages/angular/build/src/builders/unit-test/runners/vitest/executor.ts
index 39584a5844f0..19d86e4c22dc 100644
--- a/packages/angular/build/src/builders/unit-test/runners/vitest/executor.ts
+++ b/packages/angular/build/src/builders/unit-test/runners/vitest/executor.ts
@@ -240,6 +240,15 @@ export class VitestExecutor implements TestExecutor {
       project = `${projectName} (${browserOptions.browser.instances[0].browser})`;
     }
 
+    // Filter internal entries and setup files from the include list
+    const internalEntries = ['angular:'];
+    const setupFileSet = new Set(testSetupFiles);
+    const include = [...this.testFileToEntryPoint.keys()].filter((entry) => {
+      return (
+        !internalEntries.some((internal) => entry.startsWith(internal)) && !setupFileSet.has(entry)
+      );
+    });
+
     return startVitest(
       'test',
       undefined,
@@ -272,10 +281,7 @@ export class VitestExecutor implements TestExecutor {
             reporters,
             setupFiles: testSetupFiles,
             projectPlugins,
-            include: [...this.testFileToEntryPoint.keys()].filter(
-              // Filter internal entries
-              (entry) => !entry.startsWith('angular:'),
-            ),
+            include,
           }),
         ],
       },
diff --git a/packages/angular/build/src/builders/unit-test/test-discovery.ts b/packages/angular/build/src/builders/unit-test/test-discovery.ts
index 64e9718e48ac..7bad7079dc90 100644
--- a/packages/angular/build/src/builders/unit-test/test-discovery.ts
+++ b/packages/angular/build/src/builders/unit-test/test-discovery.ts
@@ -81,6 +81,7 @@ interface TestEntrypointsOptions {
   projectSourceRoot: string;
   workspaceRoot: string;
   removeTestExtension?: boolean;
+  prefix?: string;
 }
 
 /**
@@ -93,22 +94,39 @@ interface TestEntrypointsOptions {
  */
 export function getTestEntrypoints(
   testFiles: string[],
-  { projectSourceRoot, workspaceRoot, removeTestExtension }: TestEntrypointsOptions,
+  {
+    projectSourceRoot,
+    workspaceRoot,
+    removeTestExtension,
+    prefix = 'spec',
+  }: TestEntrypointsOptions,
 ): Map<string, string> {
   const seen = new Set<string>();
+  const counters = new Map<string, number>();
   const roots = [projectSourceRoot, workspaceRoot];
+  const infixes = TEST_FILE_INFIXES.map((i) => i.slice(1));
+  if (!infixes.includes(prefix)) {
+    infixes.push(prefix);
+  }
+  const infixesPattern = infixes.join('|');
 
   return new Map(
     Array.from(testFiles, (testFile) => {
       const fileName = generateNameFromPath(testFile, roots, !!removeTestExtension);
-      const baseName = `spec-${fileName}`;
+      const baseName = fileName === prefix ? prefix : `${prefix}-${fileName}`;
       let uniqueName = baseName;
-      let suffix = 2;
+      // Start at 2 for collisions as the first instance remains suffix-less.
+      let suffix = counters.get(baseName) ?? 2;
+
       while (seen.has(uniqueName)) {
-        uniqueName = `${baseName}-${suffix}`.replace(/([^\w](?:spec|test))-([\d]+)$/, '-$2$1');
+        uniqueName = `${baseName}-${suffix}`.replace(
+          new RegExp(`([^\\w](?:${infixesPattern}))-([\\d]+)$`),
+          '-$2$1',
+        );
         ++suffix;
       }
       seen.add(uniqueName);
+      counters.set(baseName, suffix);
 
       return [uniqueName, testFile];
     }),
diff --git a/packages/angular/build/src/builders/unit-test/test-discovery_spec.ts b/packages/angular/build/src/builders/unit-test/test-discovery_spec.ts
index 617839868d50..dcee1718a976 100644
--- a/packages/angular/build/src/builders/unit-test/test-discovery_spec.ts
+++ b/packages/angular/build/src/builders/unit-test/test-discovery_spec.ts
@@ -6,7 +6,79 @@
  * found in the LICENSE file at https://angular.dev/license
  */
 
-import { generateNameFromPath } from './test-discovery';
+import { generateNameFromPath, getTestEntrypoints } from './test-discovery';
+
+describe('getTestEntrypoints', () => {
+  const workspaceRoot = '/project';
+  const projectSourceRoot = '/project/src';
+  const options = { workspaceRoot, projectSourceRoot };
+
+  it('should generate entry points for unique files', () => {
+    const files = ['/project/src/a.spec.ts', '/project/src/b.spec.ts'];
+    const result = getTestEntrypoints(files, { ...options, removeTestExtension: true });
+
+    expect(result.size).toBe(2);
+    expect(result.get('spec-a')).toBe(files[0]);
+    expect(result.get('spec-b')).toBe(files[1]);
+  });
+
+  it('should handle collisions with numeric suffixes correctly positioned', () => {
+    // To trigger the regex replacement, the name must end in 'spec', 'test', or the prefix.
+    const files = ['/project/src/sub-test.spec.ts', '/project/src/sub/test.spec.ts'];
+
+    const result = getTestEntrypoints(files, { ...options, removeTestExtension: true });
+    // Both map to 'sub-test' (relative to src root).
+    // baseName = 'spec-sub-test'.
+    // 1st: 'spec-sub-test'.
+    // 2nd: 'spec-sub-test-2'. Regex matches '-test-2'. -> 'spec-sub-2-test'.
+    expect(result.get('spec-sub-test')).toBe(files[0]);
+    expect(result.get('spec-sub-2-test')).toBe(files[1]);
+  });
+
+  it('should handle setup file naming with prefix setup', () => {
+    const files = ['/project/src/setup.ts'];
+    const result = getTestEntrypoints(files, {
+      ...options,
+      removeTestExtension: false,
+      prefix: 'setup',
+    });
+
+    // 'setup.ts' -> 'setup' (via generateNameFromPath).
+    // prefix='setup'.
+    // baseName = 'setup' === 'setup' ? 'setup' : 'setup-setup' -> 'setup'.
+    expect(result.get('setup')).toBe(files[0]);
+  });
+
+  it('should handle setup file collisions', () => {
+    const files = ['/project/src/sub-setup.ts', '/project/src/sub/setup.ts'];
+    const result = getTestEntrypoints(files, {
+      ...options,
+      removeTestExtension: false,
+      prefix: 'setup',
+    });
+
+    // Both map to 'sub-setup' (baseName: 'setup-sub-setup').
+    // 1st: 'setup-sub-setup'.
+    // 2nd: 'setup-sub-setup-2'. Regex matches '-setup-2'. -> 'setup-sub-2-setup'.
+    expect(result.get('setup-sub-setup')).toBe(files[0]);
+    expect(result.get('setup-sub-2-setup')).toBe(files[1]);
+  });
+
+  it('should handle custom prefixes', () => {
+    const files = ['/project/src/sub-my-file.ts', '/project/src/sub/my-file.ts'];
+    const result = getTestEntrypoints(files, {
+      ...options,
+      removeTestExtension: false,
+      prefix: 'custom',
+    });
+
+    // 'sub-my-file.ts' -> 'sub-my-file'.
+    // baseName: 'custom-sub-my-file'.
+    expect(result.get('custom-sub-my-file')).toBe(files[0]);
+    // 'custom-sub-my-file-2'. Does not match regex (no 'spec'/'test'/'custom' at end).
+    expect(result.get('custom-sub-my-file-2')).toBe(files[1]);
+  });
+});
 
 describe('generateNameFromPath', () => {
   const roots = ['/project/src/', '/project/'];
diff --git a/packages/angular/build/src/builders/unit-test/tests/options/setup-files_spec.ts b/packages/angular/build/src/builders/unit-test/tests/options/setup-files_spec.ts
index 5f888ed7ff64..be70c833c9a9 100644
--- a/packages/angular/build/src/builders/unit-test/tests/options/setup-files_spec.ts
+++ b/packages/angular/build/src/builders/unit-test/tests/options/setup-files_spec.ts
@@ -16,7 +16,7 @@ import {
 } from '../setup';
 
 describeBuilder(execute, UNIT_TEST_BUILDER_INFO, (harness) => {
-  xdescribe('Option: "setupFiles"', () => {
+  describe('Option: "setupFiles"', () => {
     beforeEach(async () => {
       setupApplicationTarget(harness);
     });
@@ -27,19 +27,21 @@ describeBuilder(execute, UNIT_TEST_BUILDER_INFO, (harness) => {
         setupFiles: ['src/setup.ts'],
       });
 
-      const { result, error } = await harness.executeOnce({ outputLogsOnFailure: false });
-      expect(result).toBeUndefined();
-      expect(error?.message).toMatch(`The specified setup file "src/setup.ts" does not exist.`);
+      const { result, logs } = await harness.executeOnce({ outputLogsOnFailure: false });
+      expect(result?.success).toBeFalse();
+      // Verify that the build failed due to resolution error (esbuild error)
+      expectLog(logs, /Could not resolve/);
+      expectLog(logs, /src\/setup\.ts/);
     });
 
     it('should include the setup files', async () => {
       await harness.writeFiles({
-        'src/setup.ts': `console.log('Hello from setup.ts');`,
+        'src/setup.ts': `globalThis['TEST_SETUP_RAN'] = true;`,
         'src/app/app.component.spec.ts': `
         import { describe, expect, test } from 'vitest'
         describe('AppComponent', () => {
-          test('should create the app', () => {
-            expect(true).toBe(true);
+          test('should have run setup file', () => {
+            expect(globalThis['TEST_SETUP_RAN']).toBe(true);
           });
         });`,
       });
@@ -49,9 +51,8 @@ describeBuilder(execute, UNIT_TEST_BUILDER_INFO, (harness) => {
         setupFiles: ['src/setup.ts'],
       });
 
-      const { result, logs } = await harness.executeOnce();
+      const { result } = await harness.executeOnce();
       expect(result?.success).toBeTrue();
-      expectLog(logs, 'Hello from setup.ts');
     });
   });
 });
diff --git a/tests/e2e/tests/vitest/browser-playwright.ts b/tests/e2e/tests/vitest/browser-playwright.ts
index fa9ec43aabf3..fc8e7e5b53b3 100644
--- a/tests/e2e/tests/vitest/browser-playwright.ts
+++ b/tests/e2e/tests/vitest/browser-playwright.ts
@@ -3,6 +3,7 @@ import { applyVitestBuilder } from '../../utils/vitest';
 import { ng } from '../../utils/process';
 import { installPackage } from '../../utils/packages';
 import { writeFile } from '../../utils/fs';
+import { updateJsonFile } from '../../utils/project';
 
 export default async function (): Promise<void> {
   await applyVitestBuilder();
@@ -19,6 +20,10 @@ export default async function (): Promise<void> {
     `,
   );
 
+  await updateJsonFile('tsconfig.spec.json', (json) => {
+    json.include = [...(json.include || []), 'src/setup1.ts'];
+  });
+
   const { stdout } = await ng(
     'test',
     '--no-watch',
diff --git a/tests/e2e/tests/vitest/browser-webdriverio.ts b/tests/e2e/tests/vitest/browser-webdriverio.ts
index 4ea1b913c3b0..0838761eb2ad 100644
--- a/tests/e2e/tests/vitest/browser-webdriverio.ts
+++ b/tests/e2e/tests/vitest/browser-webdriverio.ts
@@ -3,6 +3,7 @@ import { applyVitestBuilder } from '../../utils/vitest';
 import { ng } from '../../utils/process';
 import { installPackage } from '../../utils/packages';
 import { writeFile } from '../../utils/fs';
+import { updateJsonFile } from '../../utils/project';
 
 export default async function (): Promise<void> {
   await applyVitestBuilder();
@@ -20,6 +21,10 @@ export default async function (): Promise<void> {
   `,
   );
 
+  await updateJsonFile('tsconfig.spec.json', (json) => {
+    json.include = [...(json.include || []), 'src/setup1.ts'];
+  });
+
   const { stdout } = await ng(
     'test',
     '--no-watch',