diff --git a/.changeset/swift-oranges-cover.md b/.changeset/swift-oranges-cover.md
new file mode 100644
index 000000000000..fd1b94cfd9b6
--- /dev/null
+++ b/.changeset/swift-oranges-cover.md
@@ -0,0 +1,5 @@
+---
+'svelte': patch
+---
+
+Fix components mounted via mount() during onMount() that not properly update when using signals provided as input of the mount() function.
diff --git a/packages/svelte/src/internal/client/proxy.js b/packages/svelte/src/internal/client/proxy.js
index fd5706eaf270..79cb0f2227f3 100644
--- a/packages/svelte/src/internal/client/proxy.js
+++ b/packages/svelte/src/internal/client/proxy.js
@@ -8,7 +8,7 @@ import {
 	is_array,
 	object_prototype
 } from '../shared/utils.js';
-import { state as source, set } from './reactivity/sources.js';
+import { source, state, set } from './reactivity/sources.js';
 import { STATE_SYMBOL } from '#client/constants';
 import { UNINITIALIZED } from '../../constants.js';
 import * as e from './errors.js';
@@ -35,7 +35,7 @@ export function proxy(value) {
 	/** @type {Map<any, Source<any>>} */
 	var sources = new Map();
 	var is_proxied_array = is_array(value);
-	var version = source(0);
+	var version = state(0);
 
 	var stack = DEV && tracing_mode_flag ? get_stack('CreatedAt') : null;
 	var reaction = active_reaction;
@@ -56,9 +56,9 @@ export function proxy(value) {
 	};
 
 	if (is_proxied_array) {
-		// We need to create the length source eagerly to ensure that
+		// We need to create the length source (state) eagerly to ensure that
 		// mutations to the array are properly synced with our proxy
-		sources.set('length', source(/** @type {any[]} */ (value).length, stack));
+		sources.set('length', state(/** @type {any[]} */ (value).length, stack));
 	}
 
 	return new Proxy(/** @type {any} */ (value), {
@@ -79,7 +79,7 @@ export function proxy(value) {
 			var s = sources.get(prop);
 
 			if (s === undefined) {
-				s = with_parent(() => source(descriptor.value, stack));
+				s = with_parent(() => state(descriptor.value, stack));
 				sources.set(prop, s);
 			} else {
 				set(
@@ -98,7 +98,7 @@ export function proxy(value) {
 				if (prop in target) {
 					sources.set(
 						prop,
-						with_parent(() => source(UNINITIALIZED, stack))
+						with_parent(() => state(UNINITIALIZED, stack))
 					);
 					update_version(version);
 				}
@@ -178,7 +178,7 @@ export function proxy(value) {
 				(active_effect !== null && (!has || get_descriptor(target, prop)?.writable))
 			) {
 				if (s === undefined) {
-					s = with_parent(() => source(has ? proxy(target[prop]) : UNINITIALIZED, stack));
+					s = with_parent(() => state(has ? proxy(target[prop]) : UNINITIALIZED, stack));
 					sources.set(prop, s);
 				}
 
@@ -202,22 +202,22 @@ export function proxy(value) {
 					if (other_s !== undefined) {
 						set(other_s, UNINITIALIZED);
 					} else if (i in target) {
-						// If the item exists in the original, we need to create a uninitialized source,
-						// else a later read of the property would result in a source being created with
+						// If the item exists in the original, we need to create a uninitialized source (state),
+						// else a later read of the property would result in a source (state) being created with
 						// the value of the original item at that index.
-						other_s = with_parent(() => source(UNINITIALIZED, stack));
+						other_s = with_parent(() => state(UNINITIALIZED, stack));
 						sources.set(i + '', other_s);
 					}
 				}
 			}
 
-			// If we haven't yet created a source for this property, we need to ensure
+			// If we haven't yet created a source (state) for this property, we need to ensure
 			// we do so otherwise if we read it later, then the write won't be tracked and
 			// the heuristics of effects will be different vs if we had read the proxied
 			// object property before writing to that property.
 			if (s === undefined) {
 				if (!has || get_descriptor(target, prop)?.writable) {
-					s = with_parent(() => source(undefined, stack));
+					s = with_parent(() => state(undefined, stack));
 					set(
 						s,
 						with_parent(() => proxy(value))
diff --git a/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/_config.js b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/_config.js
new file mode 100644
index 000000000000..f3dd65eded06
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/_config.js
@@ -0,0 +1,34 @@
+import { flushSync } from 'svelte';
+import { test } from '../../test';
+
+export default test({
+	test({ assert, target, logs }) {
+		const button = target.querySelector('button');
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+				<button>toggle</button>
+				<div>
+					<p>First if block:</p>
+					<span class="first">First: true</span>
+					<p>Second if block:</p>
+					<span class="second">Second: true</span>
+				</div>
+			`
+		);
+
+		flushSync(() => button?.click());
+
+		assert.htmlEqual(
+			target.innerHTML,
+			`
+				<button>toggle</button>
+				<div>
+					<p>First if block:</p>
+					<p>Second if block:</p>
+				</div>
+			`
+		);
+	}
+});
diff --git a/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/main.svelte b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/main.svelte
new file mode 100644
index 000000000000..0408b6218aba
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/main.svelte
@@ -0,0 +1,22 @@
+<script>
+	import { onMount } from 'svelte';
+	import { mountComponentWithContext } from './module.svelte.js';
+
+	let mountTarget;
+
+	let getShowText;
+	let setShowText;
+
+	onMount(() => {
+		const r = mountComponentWithContext(mountTarget);
+		getShowText = r.getShowText;
+		setShowText = r.setShowText;
+	});
+
+	function toggleState() {
+		setShowText(!getShowText());
+	}
+</script>
+
+<button onclick={() => toggleState()}>toggle</button>
+<div bind:this={mountTarget}></div>
diff --git a/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/module.svelte.js b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/module.svelte.js
new file mode 100644
index 000000000000..7bb247167036
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/module.svelte.js
@@ -0,0 +1,19 @@
+import { mount } from 'svelte';
+import Nested from './nested.svelte';
+
+export function mountComponentWithContext(target) {
+	const stateObject = $state({ showText: true });
+
+	mount(Nested, {
+		target,
+		props: {},
+		context: new Map([['stateContext', stateObject]])
+	});
+
+	return {
+		getShowText: () => stateObject.showText,
+		setShowText: (newShowText) => {
+			stateObject.showText = newShowText;
+		}
+	};
+}
diff --git a/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/nested.svelte b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/nested.svelte
new file mode 100644
index 000000000000..92c6d800ae2f
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/mount-component-in-onmount-with-context-with-state/nested.svelte
@@ -0,0 +1,15 @@
+<script>
+	import { getContext } from 'svelte';
+
+	const stateObjectFromContext = getContext('stateContext');
+</script>
+
+<p>First if block:</p>
+{#if stateObjectFromContext.showText === true}
+	<span class="first">First: {stateObjectFromContext.showText}</span>
+{/if}
+
+<p>Second if block:</p>
+{#if stateObjectFromContext.showText === true}
+	<span class="second">Second: {stateObjectFromContext.showText}</span>
+{/if}