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 5df9aafe0d57..19143728afe8 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
@@ -49,17 +49,29 @@ function createTestBedInitVirtualFile(
     import { getTestBed, ɵgetCleanupHook as getCleanupHook } from '@angular/core/testing';
     import { BrowserTestingModule, platformBrowserTesting } from '@angular/platform-browser/testing';
     ${providersImport}
-    // Same as https://github.com/angular/angular/blob/05a03d3f975771bb59c7eefd37c01fa127ee2229/packages/core/testing/srcs/test_hooks.ts#L21-L29
-    beforeEach(getCleanupHook(false));
-    afterEach(getCleanupHook(true));
-    @NgModule({
-      providers: [${usesZoneJS ? 'provideZoneChangeDetection(), ' : ''}...providers],
-    })
-    export class TestModule {}
-    getTestBed().initTestEnvironment([BrowserTestingModule, TestModule], platformBrowserTesting(), {
-      errorOnUnknownElements: true,
-      errorOnUnknownProperties: true,
-    });
+
+    const ANGULAR_TESTBED_SETUP = Symbol.for('@angular/cli/testbed-setup');
+    if (!globalThis[ANGULAR_TESTBED_SETUP]) {
+      globalThis[ANGULAR_TESTBED_SETUP] = true;
+
+      // The Angular TestBed needs to be initialized before any tests are run.
+      // In a non-isolated environment, this setup file can be executed multiple times.
+      // The guard condition above ensures that the setup is only performed once.
+
+      // Same as https://github.com/angular/angular/blob/05a03d3f975771bb59c7eefd37c01fa127ee2229/packages/core/testing/srcs/test_hooks.ts#L21-L29
+      beforeEach(getCleanupHook(false));
+      afterEach(getCleanupHook(true));
+
+      @NgModule({
+        providers: [${usesZoneJS ? 'provideZoneChangeDetection(), ' : ''}...providers],
+      })
+      class TestModule {}
+
+      getTestBed().initTestEnvironment([BrowserTestingModule, TestModule], platformBrowserTesting(), {
+        errorOnUnknownElements: true,
+        errorOnUnknownProperties: true,
+      });
+    }
   `;
 }
 
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 950a96f2adac..b09e2ec5e3ca 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
@@ -223,7 +223,10 @@ export class VitestExecutor implements TestExecutor {
             reporters,
             setupFiles: testSetupFiles,
             projectPlugins,
-            include: [...this.testFileToEntryPoint.keys()],
+            include: [...this.testFileToEntryPoint.keys()].filter(
+              // Filter internal entries
+              (entry) => !entry.startsWith('angular:'),
+            ),
           }),
         ],
       },
diff --git a/packages/angular/build/src/builders/unit-test/runners/vitest/plugins.ts b/packages/angular/build/src/builders/unit-test/runners/vitest/plugins.ts
index e425bdf95e4d..1a07e13ad955 100644
--- a/packages/angular/build/src/builders/unit-test/runners/vitest/plugins.ts
+++ b/packages/angular/build/src/builders/unit-test/runners/vitest/plugins.ts
@@ -125,6 +125,8 @@ export function createVitestConfigPlugin(options: VitestConfigPluginOptions): Vi
           setupFiles: combinedSetupFiles,
           include,
           globals: testConfig?.globals ?? true,
+          // Default to `false` to align with the Karma/Jasmine experience.
+          isolate: testConfig?.isolate ?? false,
           ...(browser ? { browser } : {}),
           // If the user has not specified an environment, use a smart default.
           ...(!testConfig?.environment