diff --git a/.changeset/few-lions-drive.md b/.changeset/few-lions-drive.md
new file mode 100644
index 000000000000..89f10014bc2c
--- /dev/null
+++ b/.changeset/few-lions-drive.md
@@ -0,0 +1,5 @@
+---
+'@sveltejs/kit': minor
+---
+
+feat: add `paths.relative` option to control interpretation of `paths.assets` and `paths.base`
diff --git a/packages/adapter-static/test/test.js b/packages/adapter-static/test/test.js
index 0fe826aceefc..c4144c1bd532 100644
--- a/packages/adapter-static/test/test.js
+++ b/packages/adapter-static/test/test.js
@@ -1,4 +1,4 @@
-import fs from 'fs';
+import fs from 'node:fs';
 import * as assert from 'uvu/assert';
 import { run } from './utils.js';
 
diff --git a/packages/kit/src/core/config/index.spec.js b/packages/kit/src/core/config/index.spec.js
index b58ee40beb81..614edd3bf5b3 100644
--- a/packages/kit/src/core/config/index.spec.js
+++ b/packages/kit/src/core/config/index.spec.js
@@ -97,7 +97,8 @@ const get_defaults = (prefix = '') => ({
 		typescript: {},
 		paths: {
 			base: '',
-			assets: ''
+			assets: '',
+			relative: undefined
 		},
 		prerender: {
 			concurrency: 1,
@@ -235,6 +236,7 @@ test('fails if paths.base is not root-relative', () => {
 		validate_config({
 			kit: {
 				paths: {
+					// @ts-expect-error
 					base: 'https://example.com/somewhere/else'
 				}
 			}
@@ -259,6 +261,7 @@ test('fails if paths.assets is relative', () => {
 		validate_config({
 			kit: {
 				paths: {
+					// @ts-expect-error
 					assets: 'foo'
 				}
 			}
@@ -293,8 +296,8 @@ test('fails if prerender.entries are invalid', () => {
 
 /**
  * @param {string} name
- * @param {{ base?: string, assets?: string }} input
- * @param {{ base?: string, assets?: string }} output
+ * @param {import('types').KitConfig['paths']} input
+ * @param {import('types').KitConfig['paths']} output
  */
 function validate_paths(name, input, output) {
 	test(name, () => {
@@ -316,7 +319,8 @@ validate_paths(
 	},
 	{
 		base: '/path/to/base',
-		assets: ''
+		assets: '',
+		relative: undefined
 	}
 );
 
@@ -327,7 +331,8 @@ validate_paths(
 	},
 	{
 		base: '',
-		assets: 'https://cdn.example.com'
+		assets: 'https://cdn.example.com',
+		relative: undefined
 	}
 );
 
@@ -339,7 +344,8 @@ validate_paths(
 	},
 	{
 		base: '/path/to/base',
-		assets: 'https://cdn.example.com'
+		assets: 'https://cdn.example.com',
+		relative: undefined
 	}
 );
 
diff --git a/packages/kit/src/core/config/options.js b/packages/kit/src/core/config/options.js
index ecf69c81815d..7501967f8ee5 100644
--- a/packages/kit/src/core/config/options.js
+++ b/packages/kit/src/core/config/options.js
@@ -167,6 +167,13 @@ const options = object(
 						}
 					}
 
+					return input;
+				}),
+				relative: validate(undefined, (input, keypath) => {
+					if (typeof input !== 'boolean') {
+						throw new Error(`${keypath} option must be a boolean or undefined`);
+					}
+
 					return input;
 				})
 			}),
diff --git a/packages/kit/src/core/sync/write_server.js b/packages/kit/src/core/sync/write_server.js
index 0ccd98c42bd5..a7140dce749e 100644
--- a/packages/kit/src/core/sync/write_server.js
+++ b/packages/kit/src/core/sync/write_server.js
@@ -27,7 +27,8 @@ const server_template = ({
 }) => `
 import root from '../root.svelte';
 import { set_building } from '__sveltekit/environment';
-import { set_assets, set_private_env, set_public_env } from '${runtime_directory}/shared-server.js';
+import { set_assets } from '__sveltekit/paths';
+import { set_private_env, set_public_env } from '${runtime_directory}/shared-server.js';
 
 export const options = {
 	app_template_contains_nonce: ${template.includes('%sveltekit.nonce%')},
diff --git a/packages/kit/src/exports/vite/dev/index.js b/packages/kit/src/exports/vite/dev/index.js
index 05adc2776fb1..27b3a1b5dace 100644
--- a/packages/kit/src/exports/vite/dev/index.js
+++ b/packages/kit/src/exports/vite/dev/index.js
@@ -451,15 +451,14 @@ export async function dev(vite, vite_config, svelte_config) {
 					await vite.ssrLoadModule(`${runtime_base}/server/index.js`)
 				);
 
-				const { set_assets, set_fix_stack_trace } =
-					/** @type {import('types').ServerInternalModule} */ (
-						await vite.ssrLoadModule(`${runtime_base}/shared-server.js`)
-					);
+				const { set_fix_stack_trace } = await vite.ssrLoadModule(
+					`${runtime_base}/shared-server.js`
+				);
+				set_fix_stack_trace(fix_stack_trace);
 
+				const { set_assets } = await vite.ssrLoadModule('__sveltekit/paths');
 				set_assets(assets);
 
-				set_fix_stack_trace(fix_stack_trace);
-
 				const server = new Server(manifest);
 
 				await server.init({ env });
diff --git a/packages/kit/src/exports/vite/index.js b/packages/kit/src/exports/vite/index.js
index 5517deb6ea44..4e5fd03d1c43 100644
--- a/packages/kit/src/exports/vite/index.js
+++ b/packages/kit/src/exports/vite/index.js
@@ -374,17 +374,34 @@ function kit({ svelte_config }) {
 				case '\0__sveltekit/paths':
 					const { assets, base } = svelte_config.kit.paths;
 
+					// use the values defined in `global`, but fall back to hard-coded values
+					// for the sake of things like Vitest which may import this module
+					// outside the context of a page
 					if (browser) {
-						return `export const base = ${s(base)};
-export const assets = ${global}.assets;`;
+						return `export const base = ${global}?.base ?? ${s(base)};
+export const assets = ${global}?.assets ?? ${assets ? s(assets) : 'base'};`;
 					}
 
-					return `export const base = ${s(base)};
+					return `export let base = ${s(base)};
 export let assets = ${assets ? s(assets) : 'base'};
 
+export const relative = ${svelte_config.kit.paths.relative};
+
+const initial = { base, assets };
+
+export function override(paths) {
+	base = paths.base;
+	assets = paths.assets;
+}
+
+export function reset() {
+	base = initial.base;
+	assets = initial.assets;
+}
+
 /** @param {string} path */
 export function set_assets(path) {
-	assets = path;
+	assets = initial.assets = path;
 }`;
 
 				case '\0__sveltekit/environment':
diff --git a/packages/kit/src/internal.d.ts b/packages/kit/src/internal.d.ts
index cfe9bf548544..c248d9d528f6 100644
--- a/packages/kit/src/internal.d.ts
+++ b/packages/kit/src/internal.d.ts
@@ -7,7 +7,10 @@ declare module '__sveltekit/environment' {
 
 /** Internal version of $app/paths */
 declare module '__sveltekit/paths' {
-	export const base: `/${string}`;
-	export let assets: `https://${string}` | `http://${string}`;
+	export let base: '' | `/${string}`;
+	export let assets: '' | `https://${string}` | `http://${string}` | '/_svelte_kit_assets';
+	export let relative: boolean | undefined; // TODO in 2.0, make this a `boolean` that defaults to `true`
+	export function reset(): void;
+	export function override(paths: { base: string; assets: string }): void;
 	export function set_assets(path: string): void;
 }
diff --git a/packages/kit/src/runtime/server/page/render.js b/packages/kit/src/runtime/server/page/render.js
index 92da25ad1916..2280cdfd2b4d 100644
--- a/packages/kit/src/runtime/server/page/render.js
+++ b/packages/kit/src/runtime/server/page/render.js
@@ -1,7 +1,7 @@
 import * as devalue from 'devalue';
 import { readable, writable } from 'svelte/store';
 import { DEV } from 'esm-env';
-import { assets, base } from '__sveltekit/paths';
+import * as paths from '__sveltekit/paths';
 import { hash } from '../../hash.js';
 import { serialize_data } from './serialize_data.js';
 import { s } from '../../../utils/misc.js';
@@ -11,6 +11,7 @@ import { clarify_devalue_error, stringify_uses, handle_error_and_jsonify } from
 import { public_env } from '../../shared-server.js';
 import { text } from '../../../exports/index.js';
 import { create_async_iterator } from '../../../utils/streaming.js';
+import { SVELTE_KIT_ASSETS } from '../../../constants.js';
 
 // TODO rename this function/module
 
@@ -80,6 +81,43 @@ export async function render_response({
 			? action_result.data ?? null
 			: null;
 
+	/** @type {string} */
+	let base = paths.base;
+
+	/** @type {string} */
+	let assets = paths.assets;
+
+	/**
+	 * An expression that will evaluate in the client to determine the resolved base path.
+	 * We use a relative path when possible to support IPFS, the internet archive, etc.
+	 */
+	let base_expression = s(paths.base);
+
+	// if appropriate, use relative paths for greater portability
+	if (paths.relative !== false && !state.prerendering?.fallback) {
+		const segments = event.url.pathname.slice(paths.base.length).split('/');
+
+		if (segments.length === 1 && paths.base !== '') {
+			// if we're on `/my-base-path`, relative links need to start `./my-base-path` rather than `.`
+			base = `./${paths.base.split('/').at(-1)}`;
+
+			base_expression = `new URL(${s(base)}, location).pathname`;
+		} else {
+			base =
+				segments
+					.slice(2)
+					.map(() => '..')
+					.join('/') || '.';
+
+			// resolve e.g. '../..' against current location, then remove trailing slash
+			base_expression = `new URL(${s(base)}, location).pathname.slice(0, -1)`;
+		}
+
+		if (!paths.assets || (paths.assets[0] === '/' && paths.assets !== SVELTE_KIT_ASSETS)) {
+			assets = base;
+		}
+	}
+
 	if (page_config.ssr) {
 		if (__SVELTEKIT_DEV__ && !branch.at(-1)?.node.component) {
 			// Can only be the leaf, layouts have a fallback component generated
@@ -116,6 +154,10 @@ export async function render_response({
 			form: form_value
 		};
 
+		// use relative paths during rendering, so that the resulting HTML is as
+		// portable as possible, but reset afterwards
+		if (paths.relative) paths.override({ base, assets });
+
 		if (__SVELTEKIT_DEV__) {
 			const fetch = globalThis.fetch;
 			let warned = false;
@@ -138,9 +180,14 @@ export async function render_response({
 				rendered = options.root.render(props);
 			} finally {
 				globalThis.fetch = fetch;
+				paths.reset();
 			}
 		} else {
-			rendered = options.root.render(props);
+			try {
+				rendered = options.root.render(props);
+			} finally {
+				paths.reset();
+			}
 		}
 
 		for (const { node } of branch) {
@@ -156,35 +203,6 @@ export async function render_response({
 		rendered = { head: '', html: '', css: { code: '', map: null } };
 	}
 
-	/**
-	 * The prefix to use for static assets. Replaces `%sveltekit.assets%` in the template
-	 * @type {string}
-	 */
-	let resolved_assets;
-
-	/**
-	 * An expression that will evaluate in the client to determine the resolved asset path
-	 */
-	let asset_expression;
-
-	if (assets) {
-		// if an asset path is specified, use it
-		resolved_assets = assets;
-		asset_expression = s(assets);
-	} else if (state.prerendering?.fallback) {
-		// if we're creating a fallback page, asset paths need to be root-relative
-		resolved_assets = base;
-		asset_expression = s(base);
-	} else {
-		// otherwise we want asset paths to be relative to the page, so that they
-		// will work in odd contexts like IPFS, the internet archive, and so on
-		const segments = event.url.pathname.slice(base.length).split('/').slice(2);
-		resolved_assets = segments.length > 0 ? segments.map(() => '..').join('/') : '.';
-		asset_expression = `new URL(${s(
-			resolved_assets
-		)}, location.href).pathname.replace(/^\\\/$/, '')`;
-	}
-
 	let head = '';
 	let body = rendered.html;
 
@@ -198,9 +216,9 @@ export async function render_response({
 			// Vite makes the start script available through the base path and without it.
 			// We load it via the base path in order to support remote IDE environments which proxy
 			// all URLs under the base path during development.
-			return base + path;
+			return paths.base + path;
 		}
-		return `${resolved_assets}/${path}`;
+		return `${assets}/${path}`;
 	};
 
 	if (inline_styles.size > 0) {
@@ -285,9 +303,10 @@ export async function render_response({
 
 		const properties = [
 			`env: ${s(public_env)}`,
-			`assets: ${asset_expression}`,
+			paths.assets && `assets: ${s(paths.assets)}`,
+			`base: ${base_expression}`,
 			`element: document.currentScript.parentElement`
-		];
+		].filter(Boolean);
 
 		if (chunks) {
 			blocks.push(`const deferred = new Map();`);
@@ -418,7 +437,7 @@ export async function render_response({
 	const html = options.templates.app({
 		head,
 		body,
-		assets: resolved_assets,
+		assets,
 		nonce: /** @type {string} */ (csp.nonce),
 		env: public_env
 	});
diff --git a/packages/kit/src/runtime/shared-server.js b/packages/kit/src/runtime/shared-server.js
index faaaca4cec79..ed1c5efcb472 100644
--- a/packages/kit/src/runtime/shared-server.js
+++ b/packages/kit/src/runtime/shared-server.js
@@ -1,5 +1,3 @@
-export { set_assets } from '__sveltekit/paths';
-
 /** @type {Record<string, string>} */
 export let private_env = {};
 
diff --git a/packages/kit/test/apps/basics/src/routes/paths/deeply/nested/+page.svelte b/packages/kit/test/apps/basics/src/routes/paths/deeply/nested/+page.svelte
new file mode 100644
index 000000000000..73d1cb7eb4ef
--- /dev/null
+++ b/packages/kit/test/apps/basics/src/routes/paths/deeply/nested/+page.svelte
@@ -0,0 +1,5 @@
+<script>
+	import { base, assets } from '$app/paths';
+</script>
+
+<pre>{JSON.stringify({ base, assets })}</pre>
diff --git a/packages/kit/test/apps/basics/test/test.js b/packages/kit/test/apps/basics/test/test.js
index 05bc19a9f641..6548d634c4d7 100644
--- a/packages/kit/test/apps/basics/test/test.js
+++ b/packages/kit/test/apps/basics/test/test.js
@@ -618,6 +618,15 @@ test.describe('$app/paths', () => {
 				assets: ''
 			})
 		);
+
+		await page.goto('/paths/deeply/nested');
+
+		expect(await page.innerHTML('pre')).toBe(
+			JSON.stringify({
+				base: '',
+				assets: ''
+			})
+		);
 	});
 
 	// some browsers will re-request assets after a `pushState`
diff --git a/packages/kit/test/apps/options-2/src/routes/+page.svelte b/packages/kit/test/apps/options-2/src/routes/+page.svelte
index 986a4a1a25bc..d6232afc0cc9 100644
--- a/packages/kit/test/apps/options-2/src/routes/+page.svelte
+++ b/packages/kit/test/apps/options-2/src/routes/+page.svelte
@@ -1 +1,8 @@
+<script>
+	import { base, assets } from '$app/paths';
+</script>
+
 <h1>Hello</h1>
+
+<p data-testid="base">base: {base}</p>
+<p data-testid="assets">assets: {assets}</p>
diff --git a/packages/kit/test/apps/options-2/src/routes/deeply/nested/page/+page.svelte b/packages/kit/test/apps/options-2/src/routes/deeply/nested/page/+page.svelte
new file mode 100644
index 000000000000..d6232afc0cc9
--- /dev/null
+++ b/packages/kit/test/apps/options-2/src/routes/deeply/nested/page/+page.svelte
@@ -0,0 +1,8 @@
+<script>
+	import { base, assets } from '$app/paths';
+</script>
+
+<h1>Hello</h1>
+
+<p data-testid="base">base: {base}</p>
+<p data-testid="assets">assets: {assets}</p>
diff --git a/packages/kit/test/apps/options-2/svelte.config.js b/packages/kit/test/apps/options-2/svelte.config.js
index ade762d9b8a1..ca9cb32020f8 100644
--- a/packages/kit/test/apps/options-2/svelte.config.js
+++ b/packages/kit/test/apps/options-2/svelte.config.js
@@ -2,7 +2,8 @@
 const config = {
 	kit: {
 		paths: {
-			base: '/basepath'
+			base: '/basepath',
+			relative: true
 		},
 		serviceWorker: {
 			register: false
diff --git a/packages/kit/test/apps/options-2/test/test.js b/packages/kit/test/apps/options-2/test/test.js
index f9b7cff16d3a..61f0b510720b 100644
--- a/packages/kit/test/apps/options-2/test/test.js
+++ b/packages/kit/test/apps/options-2/test/test.js
@@ -13,7 +13,7 @@ test.describe('env', () => {
 	});
 });
 
-test.describe('paths.base', () => {
+test.describe('paths', () => {
 	test('serves /basepath', async ({ page }) => {
 		await page.goto('/basepath');
 		expect(await page.textContent('h1')).toBe('Hello');
@@ -23,6 +23,20 @@ test.describe('paths.base', () => {
 		const response = await request.get('/basepath/answer.txt');
 		expect(await response.text()).toBe('42');
 	});
+
+	test('uses relative paths during SSR', async ({ page, javaScriptEnabled }) => {
+		await page.goto('/basepath');
+
+		let base = javaScriptEnabled ? '/basepath' : './basepath';
+		expect(await page.textContent('[data-testid="base"]')).toBe(`base: ${base}`);
+		expect(await page.textContent('[data-testid="assets"]')).toBe(`assets: ${base}`);
+
+		await page.goto('/basepath/deeply/nested/page');
+
+		base = javaScriptEnabled ? '/basepath' : '../..';
+		expect(await page.textContent('[data-testid="base"]')).toBe(`base: ${base}`);
+		expect(await page.textContent('[data-testid="assets"]')).toBe(`assets: ${base}`);
+	});
 });
 
 test.describe('Service worker', () => {
diff --git a/packages/kit/test/apps/options/source/pages/slash/+page.svelte b/packages/kit/test/apps/options/source/pages/slash/+page.svelte
index 93a915f3661f..7c66a2ad551b 100644
--- a/packages/kit/test/apps/options/source/pages/slash/+page.svelte
+++ b/packages/kit/test/apps/options/source/pages/slash/+page.svelte
@@ -3,6 +3,6 @@
 	import { page } from '$app/stores';
 </script>
 
-<h2>{$page.url.pathname.replace(base, '')}</h2>
+<h2>{$page.url.pathname}</h2>
 
-<a href="{base}/slash/child">/slash/child</a>
+<a data-testid="child" href="{base}/slash/child">/slash/child</a>
diff --git a/packages/kit/test/apps/options/source/pages/slash/child/+page.svelte b/packages/kit/test/apps/options/source/pages/slash/child/+page.svelte
index ab4505e94b0e..fe890859233d 100644
--- a/packages/kit/test/apps/options/source/pages/slash/child/+page.svelte
+++ b/packages/kit/test/apps/options/source/pages/slash/child/+page.svelte
@@ -1,6 +1,5 @@
 <script>
-	import { base } from '$app/paths';
 	import { page } from '$app/stores';
 </script>
 
-<h2>{$page.url.pathname.replace(base, '')}</h2>
+<h2>{$page.url.pathname}</h2>
diff --git a/packages/kit/test/apps/options/test/test.js b/packages/kit/test/apps/options/test/test.js
index 3746deaea278..d50125ae8c7b 100644
--- a/packages/kit/test/apps/options/test/test.js
+++ b/packages/kit/test/apps/options/test/test.js
@@ -176,11 +176,11 @@ test.describe('trailingSlash', () => {
 		await page.goto('/path-base/slash');
 
 		expect(page.url()).toBe(`${baseURL}/path-base/slash/`);
-		expect(await page.textContent('h2')).toBe('/slash/');
+		expect(await page.textContent('h2')).toBe('/path-base/slash/');
 
-		await clicknav('[href="/path-base/slash/child"]');
+		await clicknav('[data-testid="child"]');
 		expect(page.url()).toBe(`${baseURL}/path-base/slash/child/`);
-		expect(await page.textContent('h2')).toBe('/slash/child/');
+		expect(await page.textContent('h2')).toBe('/path-base/slash/child/');
 	});
 
 	test('removes trailing slash on endpoint', async ({ baseURL, request }) => {
diff --git a/packages/kit/types/index.d.ts b/packages/kit/types/index.d.ts
index 73c5683ca8fe..e9ee9b25a939 100644
--- a/packages/kit/types/index.d.ts
+++ b/packages/kit/types/index.d.ts
@@ -427,12 +427,20 @@ export interface KitConfig {
 		 * An absolute path that your app's files are served from. This is useful if your files are served from a storage bucket of some kind.
 		 * @default ""
 		 */
-		assets?: string;
+		assets?: '' | `http://${string}` | `https://${string}`;
 		/**
 		 * A root-relative path that must start, but not end with `/` (e.g. `/base-path`), unless it is the empty string. This specifies where your app is served from and allows the app to live on a non-root path. Note that you need to prepend all your root-relative links with the base value or they will point to the root of your domain, not your `base` (this is how the browser works). You can use [`base` from `$app/paths`](/docs/modules#$app-paths-base) for that: `<a href="{base}/your-page">Link</a>`. If you find yourself writing this often, it may make sense to extract this into a reusable component.
 		 * @default ""
 		 */
-		base?: string;
+		base?: '' | `/${string}`;
+		/**
+		 * Whether to use relative asset paths. By default, if `paths.assets` is not external, SvelteKit will replace `%sveltekit.assets%` with a relative path and use relative paths to reference build artifacts, but `base` and `assets` imported from `$app/paths` will be as specified in your config.
+		 *
+		 * If `true`, `base` and `assets` imported from `$app/paths` will be replaced with relative asset paths during server-side rendering, resulting in portable HTML.
+		 * If `false`, `%sveltekit.assets%` and references to build artifacts will always be root-relative paths, unless `paths.assets` is an external URL
+		 * @default undefined
+		 */
+		relative?: boolean | undefined;
 	};
 	/**
 	 * See [Prerendering](https://kit.svelte.dev/docs/page-options#prerender).