diff --git a/.circleci/config.yml b/.circleci/config.yml
index 2dbb2e260e..0cbf22a6d3 100644
--- a/.circleci/config.yml
+++ b/.circleci/config.yml
@@ -221,7 +221,7 @@ jobs:
           name: Execute CLI E2E Tests Subset with esbuild builder
           command: |
             mkdir /mnt/ramdisk/e2e-esbuild
-            node ./tests/legacy-cli/run_e2e --nb-shards=${CIRCLE_NODE_TOTAL} --shard=${CIRCLE_NODE_INDEX} <<# parameters.snapshots >>--ng-snapshots<</ parameters.snapshots >> --esbuild --tmpdir=/mnt/ramdisk/e2e-esbuild --glob="{tests/basic/**,tests/build/prod-build.ts,tests/commands/add/add-pwa.ts}" --ignore="tests/basic/{environment,rebuild,serve,scripts-array}.ts"
+            node ./tests/legacy-cli/run_e2e --nb-shards=${CIRCLE_NODE_TOTAL} --shard=${CIRCLE_NODE_INDEX} <<# parameters.snapshots >>--ng-snapshots<</ parameters.snapshots >> --esbuild --tmpdir=/mnt/ramdisk/e2e-esbuild --glob="{tests/basic/**,tests/build/prod-build.ts,tests/build/styles/scss.ts,tests/build/styles/include-paths.ts,tests/commands/add/add-pwa.ts}" --ignore="tests/basic/{environment,rebuild,serve,scripts-array}.ts"
       - fail_fast
 
   test-browsers:
diff --git a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/compiler-plugin.ts b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/compiler-plugin.ts
index 85896b7fb5..85220ef735 100644
--- a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/compiler-plugin.ts
+++ b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/compiler-plugin.ts
@@ -16,7 +16,7 @@ import ts from 'typescript';
 import angularApplicationPreset from '../../babel/presets/application';
 import { requiresLinking } from '../../babel/webpack-loader';
 import { loadEsmModule } from '../../utils/load-esm';
-import { BundleStylesheetOptions, bundleStylesheetText } from './stylesheets';
+import { BundleStylesheetOptions, bundleStylesheetFile, bundleStylesheetText } from './stylesheets';
 
 interface EmitFileResult {
   content?: string;
@@ -191,17 +191,27 @@ export function createCompilerPlugin(
         // Create TypeScript compiler host
         const host = ts.createIncrementalCompilerHost(compilerOptions);
 
-        // Temporarily add a readResource hook to allow for a transformResource hook.
-        // Once the AOT compiler allows only a transformResource hook this can be removed.
-        (host as CompilerHost).readResource = function (fileName) {
-          // Provide same no file found behavior as @ngtools/webpack
-          return this.readFile(fileName) ?? '';
+        // Temporarily process external resources via readResource.
+        // The AOT compiler currently requires this hook to allow for a transformResource hook.
+        // Once the AOT compiler allows only a transformResource hook, this can be reevaluated.
+        (host as CompilerHost).readResource = async function (fileName) {
+          // Template resources (.html) files are not bundled or transformed
+          if (fileName.endsWith('.html')) {
+            return this.readFile(fileName) ?? '';
+          }
+
+          const { contents, errors, warnings } = await bundleStylesheetFile(fileName, styleOptions);
+
+          (result.errors ??= []).push(...errors);
+          (result.warnings ??= []).push(...warnings);
+
+          return contents;
         };
 
         // Add an AOT compiler resource transform hook
         (host as CompilerHost).transformResource = async function (data, context) {
-          // Only style resources are transformed currently
-          if (context.type !== 'style') {
+          // Only inline style resources are transformed separately currently
+          if (context.resourceFile || context.type !== 'style') {
             return null;
           }
 
diff --git a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/index.ts b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/index.ts
index e19939cfea..347e93676c 100644
--- a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/index.ts
+++ b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/index.ts
@@ -160,8 +160,9 @@ export async function buildEsbuildBrowser(
         { virtualName: `angular:style/global;${name}`, resolvePath: workspaceRoot },
         {
           optimization: !!optimizationOptions.styles.minify,
-          sourcemap: !!sourcemapOptions.styles,
+          sourcemap: !!sourcemapOptions.styles && (sourcemapOptions.hidden ? 'external' : true),
           outputNames: noInjectNames.includes(name) ? { media: outputNames.media } : outputNames,
+          includePaths: options.stylePreprocessorOptions?.includePaths,
         },
       );
 
@@ -334,6 +335,7 @@ async function bundleCode(
             // of sourcemap processing.
             !!sourcemapOptions.styles && (sourcemapOptions.hidden ? false : 'inline'),
           outputNames,
+          includePaths: options.stylePreprocessorOptions?.includePaths,
         },
       ),
     ],
diff --git a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/sass-plugin.ts b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/sass-plugin.ts
new file mode 100644
index 0000000000..dfafa49049
--- /dev/null
+++ b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/sass-plugin.ts
@@ -0,0 +1,59 @@
+/**
+ * @license
+ * Copyright Google LLC All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.io/license
+ */
+
+import type { Plugin, PluginBuild } from 'esbuild';
+import type { LegacyResult } from 'sass';
+import { SassWorkerImplementation } from '../../sass/sass-service';
+
+export function createSassPlugin(options: { sourcemap: boolean; includePaths?: string[] }): Plugin {
+  return {
+    name: 'angular-sass',
+    setup(build: PluginBuild): void {
+      let sass: SassWorkerImplementation;
+
+      build.onStart(() => {
+        sass = new SassWorkerImplementation();
+      });
+
+      build.onEnd(() => {
+        sass?.close();
+      });
+
+      build.onLoad({ filter: /\.s[ac]ss$/ }, async (args) => {
+        const result = await new Promise<LegacyResult>((resolve, reject) => {
+          sass.render(
+            {
+              file: args.path,
+              includePaths: options.includePaths,
+              indentedSyntax: args.path.endsWith('.sass'),
+              outputStyle: 'expanded',
+              sourceMap: options.sourcemap,
+              sourceMapContents: options.sourcemap,
+              sourceMapEmbed: options.sourcemap,
+              quietDeps: true,
+            },
+            (error, result) => {
+              if (error) {
+                reject(error);
+              }
+              if (result) {
+                resolve(result);
+              }
+            },
+          );
+        });
+
+        return {
+          contents: result.css,
+          loader: 'css',
+          watchFiles: result.stats.includedFiles,
+        };
+      });
+    },
+  };
+}
diff --git a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/stylesheets.ts b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/stylesheets.ts
index ecf2082722..1878202ccd 100644
--- a/packages/angular_devkit/build_angular/src/builders/browser-esbuild/stylesheets.ts
+++ b/packages/angular_devkit/build_angular/src/builders/browser-esbuild/stylesheets.ts
@@ -9,6 +9,7 @@
 import type { BuildOptions, OutputFile } from 'esbuild';
 import * as path from 'path';
 import { DEFAULT_OUTDIR, bundle } from './esbuild';
+import { createSassPlugin } from './sass-plugin';
 
 export interface BundleStylesheetOptions {
   workspaceRoot?: string;
@@ -16,6 +17,7 @@ export interface BundleStylesheetOptions {
   preserveSymlinks?: boolean;
   sourcemap: boolean | 'external' | 'inline';
   outputNames?: { bundles?: string; media?: string };
+  includePaths?: string[];
 }
 
 async function bundleStylesheet(
@@ -39,7 +41,7 @@ async function bundleStylesheet(
     conditions: ['style'],
     mainFields: ['style'],
     plugins: [
-      // TODO: preprocessor plugins
+      createSassPlugin({ sourcemap: !!options.sourcemap, includePaths: options.includePaths }),
     ],
   });
 
diff --git a/tests/legacy-cli/e2e/tests/build/styles/include-paths.ts b/tests/legacy-cli/e2e/tests/build/styles/include-paths.ts
index 041ef7a2c9..e1c77e33be 100644
--- a/tests/legacy-cli/e2e/tests/build/styles/include-paths.ts
+++ b/tests/legacy-cli/e2e/tests/build/styles/include-paths.ts
@@ -1,78 +1,86 @@
+import { getGlobalVariable } from '../../../utils/env';
 import { writeMultipleFiles, expectFileToMatch, replaceInFile, createDir } from '../../../utils/fs';
 import { ng } from '../../../utils/process';
 import { updateJsonFile } from '../../../utils/project';
 
-export default function () {
-  return (
-    Promise.resolve()
-      .then(() => createDir('src/style-paths'))
-      .then(() =>
-        writeMultipleFiles({
-          'src/style-paths/_variables.scss': '$primary-color: red;',
-          'src/styles.scss': `
+export default async function () {
+  // esbuild currently only supports Sass
+  const esbuild = getGlobalVariable('argv')['esbuild'];
+
+  await createDir('src/style-paths');
+  await writeMultipleFiles({
+    'src/style-paths/_variables.scss': '$primary-color: red;',
+    'src/styles.scss': `
       @import 'variables';
       h1 { color: $primary-color; }
-    `,
-          'src/app/app.component.scss': `
+      `,
+    'src/app/app.component.scss': `
       @import 'variables';
       h2 { background-color: $primary-color; }
-    `,
-          'src/style-paths/variables.styl': '$primary-color = green',
-          'src/styles.styl': `
+      `,
+    'src/style-paths/variables.styl': '$primary-color = green',
+    'src/styles.styl': `
       @import 'variables'
       h3
         color: $primary-color
-    `,
-          'src/app/app.component.styl': `
+      `,
+    'src/app/app.component.styl': `
       @import 'variables'
       h4
         background-color: $primary-color
-    `,
-          'src/style-paths/variables.less': '@primary-color: #ADDADD;',
-          'src/styles.less': `
+      `,
+    'src/style-paths/variables.less': '@primary-color: #ADDADD;',
+    'src/styles.less': `
       @import 'variables';
       h5 { color: @primary-color; }
-    `,
-          'src/app/app.component.less': `
+      `,
+    'src/app/app.component.less': `
       @import 'variables';
       h6 { color: @primary-color; }
-    `,
-        }),
-      )
-      .then(() =>
-        replaceInFile(
-          'src/app/app.component.ts',
-          `'./app.component.css\'`,
-          `'./app.component.scss', './app.component.styl', './app.component.less'`,
-        ),
-      )
-      .then(() =>
-        updateJsonFile('angular.json', (workspaceJson) => {
-          const appArchitect = workspaceJson.projects['test-project'].architect;
-          appArchitect.build.options.styles = [
-            { input: 'src/styles.scss' },
-            { input: 'src/styles.styl' },
-            { input: 'src/styles.less' },
-          ];
-          appArchitect.build.options.stylePreprocessorOptions = {
-            includePaths: ['src/style-paths'],
-          };
-        }),
-      )
-      // files were created successfully
-      .then(() => ng('build', '--configuration=development'))
-      .then(() => expectFileToMatch('dist/test-project/styles.css', /h1\s*{\s*color: red;\s*}/))
-      .then(() => expectFileToMatch('dist/test-project/main.js', /h2.*{.*color: red;.*}/))
-      .then(() => expectFileToMatch('dist/test-project/styles.css', /h3\s*{\s*color: #008000;\s*}/))
-      .then(() => expectFileToMatch('dist/test-project/main.js', /h4.*{.*color: #008000;.*}/))
-      .then(() => expectFileToMatch('dist/test-project/styles.css', /h5\s*{\s*color: #ADDADD;\s*}/))
-      .then(() => expectFileToMatch('dist/test-project/main.js', /h6.*{.*color: #ADDADD;.*}/))
-      .then(() => ng('build', '--aot', '--configuration=development'))
-      .then(() => expectFileToMatch('dist/test-project/styles.css', /h1\s*{\s*color: red;\s*}/))
-      .then(() => expectFileToMatch('dist/test-project/main.js', /h2.*{.*color: red;.*}/))
-      .then(() => expectFileToMatch('dist/test-project/styles.css', /h3\s*{\s*color: #008000;\s*}/))
-      .then(() => expectFileToMatch('dist/test-project/main.js', /h4.*{.*color: #008000;.*}/))
-      .then(() => expectFileToMatch('dist/test-project/styles.css', /h5\s*{\s*color: #ADDADD;\s*}/))
-      .then(() => expectFileToMatch('dist/test-project/main.js', /h6.*{.*color: #ADDADD;.*}/))
+      `,
+  });
+
+  await replaceInFile(
+    'src/app/app.component.ts',
+    `'./app.component.css\'`,
+    `'./app.component.scss'` + (esbuild ? '' : `, './app.component.styl', './app.component.less'`),
   );
+
+  await updateJsonFile('angular.json', (workspaceJson) => {
+    const appArchitect = workspaceJson.projects['test-project'].architect;
+    appArchitect.build.options.styles = [{ input: 'src/styles.scss' }];
+    if (!esbuild) {
+      appArchitect.build.options.styles.push(
+        { input: 'src/styles.styl' },
+        { input: 'src/styles.less' },
+      );
+    }
+    appArchitect.build.options.stylePreprocessorOptions = {
+      includePaths: ['src/style-paths'],
+    };
+  });
+
+  await ng('build', '--configuration=development');
+
+  expectFileToMatch('dist/test-project/styles.css', /h1\s*{\s*color: red;\s*}/);
+  expectFileToMatch('dist/test-project/main.js', /h2.*{.*color: red;.*}/);
+  if (!esbuild) {
+    // These checks are for the less and stylus files
+    expectFileToMatch('dist/test-project/styles.css', /h3\s*{\s*color: #008000;\s*}/);
+    expectFileToMatch('dist/test-project/main.js', /h4.*{.*color: #008000;.*}/);
+    expectFileToMatch('dist/test-project/styles.css', /h5\s*{\s*color: #ADDADD;\s*}/);
+    expectFileToMatch('dist/test-project/main.js', /h6.*{.*color: #ADDADD;.*}/);
+  }
+
+  // esbuild currently only supports AOT and not JIT mode
+  if (!esbuild) {
+    ng('build', '--no-aot', '--configuration=development');
+
+    expectFileToMatch('dist/test-project/styles.css', /h1\s*{\s*color: red;\s*}/);
+    expectFileToMatch('dist/test-project/main.js', /h2.*{.*color: red;.*}/);
+    expectFileToMatch('dist/test-project/styles.css', /h3\s*{\s*color: #008000;\s*}/);
+    expectFileToMatch('dist/test-project/main.js', /h4.*{.*color: #008000;.*}/);
+    expectFileToMatch('dist/test-project/styles.css', /h5\s*{\s*color: #ADDADD;\s*}/);
+    expectFileToMatch('dist/test-project/main.js', /h6.*{.*color: #ADDADD;.*}/);
+  }
 }