diff --git a/packages/community-cli-plugin/package.json b/packages/community-cli-plugin/package.json
index 20a2be8d5fd6..42ac73ae2a62 100644
--- a/packages/community-cli-plugin/package.json
+++ b/packages/community-cli-plugin/package.json
@@ -31,9 +31,11 @@
     "metro": "^0.80.3",
     "metro-config": "^0.80.3",
     "metro-core": "^0.80.3",
+    "micromatch": "^4.0.5",
     "node-fetch": "^2.2.0",
     "querystring": "^0.2.1",
-    "readline": "^1.3.0"
+    "readline": "^1.3.0",
+    "yaml": "^2.3.4"
   },
   "devDependencies": {
     "metro-resolver": "^0.80.3"
diff --git a/packages/community-cli-plugin/src/utils/__tests__/getWorkspaceRoot-test.js b/packages/community-cli-plugin/src/utils/__tests__/getWorkspaceRoot-test.js
new file mode 100644
index 000000000000..6d73456d9b2c
--- /dev/null
+++ b/packages/community-cli-plugin/src/utils/__tests__/getWorkspaceRoot-test.js
@@ -0,0 +1,108 @@
+/**
+ * Copyright (c) Meta Platforms, Inc. and affiliates.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ * @flow strict-local
+ * @format
+ * @oncall react_native
+ */
+
+import {getWorkspaceRoot} from '../getWorkspaceRoot';
+import {createTempPackage} from './temporary-package';
+import fs from 'fs';
+import path from 'path';
+
+describe('getWorkspaceRoot', () => {
+  test('returns null if not in a workspace', () => {
+    const tempPackagePath = createTempPackage({
+      name: 'my-app',
+    });
+    expect(getWorkspaceRoot(tempPackagePath)).toBe(null);
+  });
+
+  test('supports an npm workspace', () => {
+    const tempWorkspaceRootPath = createTempPackage({
+      name: 'package-root',
+      workspaces: ['packages/my-app', 'packages/my-lib'],
+    });
+    const tempPackagePath = createTempPackage(
+      {
+        name: 'my-app',
+      },
+      path.join(tempWorkspaceRootPath, 'packages', 'my-app'),
+    );
+    expect(getWorkspaceRoot(tempPackagePath)).toBe(tempWorkspaceRootPath);
+  });
+
+  test('supports a yarn workspace', () => {
+    const tempWorkspaceRootPath = createTempPackage({
+      name: 'package-root',
+      workspaces: ['packages/*'],
+    });
+    const tempPackagePath = createTempPackage(
+      {
+        name: 'my-app',
+      },
+      path.join(tempWorkspaceRootPath, 'packages', 'my-app'),
+    );
+    expect(getWorkspaceRoot(tempPackagePath)).toBe(tempWorkspaceRootPath);
+  });
+
+  test('supports a yarn workspace (object style)', () => {
+    const tempWorkspaceRootPath = createTempPackage({
+      name: 'package-root',
+      workspaces: {
+        packages: ['packages/*'],
+      },
+    });
+    const tempPackagePath = createTempPackage(
+      {
+        name: 'my-app',
+      },
+      path.join(tempWorkspaceRootPath, 'packages', 'my-app'),
+    );
+    expect(getWorkspaceRoot(tempPackagePath)).toBe(tempWorkspaceRootPath);
+  });
+
+  test('supports a pnpm workspace', () => {
+    const tempWorkspaceRootPath = createTempPackage({
+      name: 'package-root',
+    });
+    // Create the pnpm workspace configuration (see https://pnpm.io/pnpm-workspace_yaml)
+    const workspacesConfig = 'packages: ["packages/*"]';
+    fs.writeFileSync(
+      path.join(tempWorkspaceRootPath, 'pnpm-workspace.yaml'),
+      workspacesConfig,
+      'utf8',
+    );
+    const tempPackagePath = createTempPackage(
+      {
+        name: 'my-app',
+      },
+      path.join(tempWorkspaceRootPath, 'packages', 'my-app'),
+    );
+    expect(getWorkspaceRoot(tempPackagePath)).toBe(tempWorkspaceRootPath);
+  });
+
+  test('supports a pnpm workspace exclusion', () => {
+    const tempWorkspaceRootPath = createTempPackage({
+      name: 'package-root',
+    });
+    // Create the pnpm workspace configuration (see https://pnpm.io/pnpm-workspace_yaml)
+    const workspacesConfig = 'packages: ["packages/*", "!packages/*-app"]';
+    fs.writeFileSync(
+      path.join(tempWorkspaceRootPath, 'pnpm-workspace.yaml'),
+      workspacesConfig,
+      'utf8',
+    );
+    const tempPackagePath = createTempPackage(
+      {
+        name: 'my-app',
+      },
+      path.join(tempWorkspaceRootPath, 'packages', 'my-app'),
+    );
+    expect(getWorkspaceRoot(tempPackagePath)).toBe(null);
+  });
+});
diff --git a/packages/community-cli-plugin/src/utils/__tests__/loadMetroConfig-test.js b/packages/community-cli-plugin/src/utils/__tests__/loadMetroConfig-test.js
new file mode 100644
index 000000000000..4610e874cb51
--- /dev/null
+++ b/packages/community-cli-plugin/src/utils/__tests__/loadMetroConfig-test.js
@@ -0,0 +1,133 @@
+/**
+ * Copyright (c) Meta Platforms, Inc. and affiliates.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ * @flow strict-local
+ * @format
+ * @oncall react_native
+ */
+
+import loadMetroConfig from '../loadMetroConfig';
+import {createTempPackage} from './temporary-package';
+import fs from 'fs';
+import path from 'path';
+
+/**
+ * Resolves a package by its name and creates a symbolic link in a node_modules directory
+ */
+function createPackageLink(nodeModulesPath: string, packageName: string) {
+  // Resolve the packages path on disk
+  const destinationPath = path.dirname(require.resolve(packageName));
+  const packageScope = packageName.includes('/')
+    ? packageName.split('/')[0]
+    : undefined;
+
+  // Create a parent directory for a @scoped package
+  if (typeof packageScope === 'string') {
+    fs.mkdirSync(path.join(nodeModulesPath, packageScope));
+  }
+
+  const sourcePath = path.join(nodeModulesPath, packageName);
+  fs.symlinkSync(destinationPath, sourcePath);
+}
+
+function createTempConfig(projectRoot: string, metroConfig: {...}) {
+  const content = `
+    const {getDefaultConfig, mergeConfig} = require('@react-native/metro-config');
+    const config = ${JSON.stringify(metroConfig)};
+    module.exports = mergeConfig(getDefaultConfig(__dirname), config);
+  `;
+  const configPath = path.join(projectRoot, 'metro.config.js');
+  fs.writeFileSync(configPath, content, 'utf8');
+
+  const nodeModulesPath = path.join(projectRoot, 'node_modules');
+  fs.mkdirSync(nodeModulesPath);
+  // Create a symbolic link to the '@react-native/metro-config' package used by the config
+  createPackageLink(nodeModulesPath, '@react-native/metro-config');
+}
+
+const configLoadingContext = {
+  reactNativePath: path.dirname(require.resolve('react-native/package.json')),
+  platforms: {
+    ios: {npmPackageName: 'temp-package'},
+    android: {npmPackageName: 'temp-package'},
+  },
+};
+
+describe('loadMetroConfig', () => {
+  test('loads an empty config', async () => {
+    const rootPath = createTempPackage({name: 'temp-app'});
+    createTempConfig(rootPath, {});
+
+    const loadedConfig = await loadMetroConfig({
+      root: rootPath,
+      ...configLoadingContext,
+    });
+    expect(loadedConfig.projectRoot).toEqual(rootPath);
+    expect(loadedConfig.watchFolders).toEqual([rootPath]);
+  });
+
+  test('loads watch folders', async () => {
+    const rootPath = createTempPackage({
+      name: 'temp-app',
+    });
+    createTempConfig(rootPath, {
+      watchFolders: ['somewhere-else'],
+    });
+
+    const loadedConfig = await loadMetroConfig({
+      root: rootPath,
+      ...configLoadingContext,
+    });
+    expect(loadedConfig.projectRoot).toEqual(rootPath);
+    expect(loadedConfig.watchFolders).toEqual([rootPath, 'somewhere-else']);
+  });
+
+  test('includes an npm workspace root if no watchFolders are defined', async () => {
+    const rootPath = createTempPackage({
+      name: 'temp-root',
+      workspaces: ['packages/temp-app'],
+    });
+    // Create a config inside a sub-package
+    const projectRoot = createTempPackage(
+      {
+        name: 'temp-app',
+      },
+      path.join(rootPath, 'packages', 'temp-app'),
+    );
+    createTempConfig(projectRoot, {});
+
+    const loadedConfig = await loadMetroConfig({
+      root: projectRoot,
+      ...configLoadingContext,
+    });
+    expect(loadedConfig.projectRoot).toEqual(projectRoot);
+    expect(loadedConfig.watchFolders).toEqual([projectRoot, rootPath]);
+  });
+
+  test('does not resolve an npm workspace root if watchFolders are defined', async () => {
+    const rootPath = createTempPackage({
+      name: 'temp-root',
+      workspaces: ['packages/temp-app'],
+    });
+    // Create a config inside a sub-package
+    const projectRoot = createTempPackage(
+      {
+        name: 'temp-app',
+      },
+      path.join(rootPath, 'packages', 'temp-app'),
+    );
+    createTempConfig(projectRoot, {
+      watchFolders: [],
+    });
+
+    const loadedConfig = await loadMetroConfig({
+      root: projectRoot,
+      ...configLoadingContext,
+    });
+    expect(loadedConfig.projectRoot).toEqual(projectRoot);
+    expect(loadedConfig.watchFolders).toEqual([projectRoot]);
+  });
+});
diff --git a/packages/community-cli-plugin/src/utils/__tests__/temporary-package.js b/packages/community-cli-plugin/src/utils/__tests__/temporary-package.js
new file mode 100644
index 000000000000..6f2ebf69c884
--- /dev/null
+++ b/packages/community-cli-plugin/src/utils/__tests__/temporary-package.js
@@ -0,0 +1,33 @@
+/**
+ * Copyright (c) Meta Platforms, Inc. and affiliates.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ * @flow strict-local
+ * @format
+ * @oncall react_native
+ */
+
+import fs from 'fs';
+import os from 'os';
+import path from 'path';
+
+export function createTempPackage(
+  packageJson: {...},
+  packagePath: string = fs.mkdtempSync(
+    path.join(os.tmpdir(), 'rn-metro-config-test-'),
+  ),
+): string {
+  fs.mkdirSync(packagePath, {recursive: true});
+  if (typeof packageJson === 'object') {
+    fs.writeFileSync(
+      path.join(packagePath, 'package.json'),
+      JSON.stringify(packageJson),
+      'utf8',
+    );
+  }
+
+  // Wrapping path in realpath to resolve any symlinks introduced by mkdtemp
+  return fs.realpathSync(packagePath);
+}
diff --git a/packages/community-cli-plugin/src/utils/getWorkspaceRoot.js b/packages/community-cli-plugin/src/utils/getWorkspaceRoot.js
new file mode 100644
index 000000000000..3101adde2381
--- /dev/null
+++ b/packages/community-cli-plugin/src/utils/getWorkspaceRoot.js
@@ -0,0 +1,86 @@
+/**
+ * Copyright (c) Meta Platforms, Inc. and affiliates.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ *
+ * @flow
+ * @format
+ * @oncall react_native
+ */
+
+import {logger} from '@react-native-community/cli-tools';
+import fs from 'fs';
+import micromatch from 'micromatch';
+import path from 'path';
+import yaml from 'yaml';
+
+/**
+ * Get the workspace paths from the path of a potential workspace root.
+ *
+ * This supports:
+ * - [npm workspaces](https://docs.npmjs.com/cli/v10/using-npm/workspaces)
+ * - [yarn workspaces](https://yarnpkg.com/features/workspaces)
+ * - [pnpm workspaces](https://pnpm.io/workspaces)
+ */
+function getWorkspacePaths(packagePath: string): Array<string> {
+  try {
+    // Checking pnpm workspaces first
+    const pnpmWorkspacePath = path.resolve(packagePath, 'pnpm-workspace.yaml');
+    if (fs.existsSync(pnpmWorkspacePath)) {
+      const pnpmWorkspaceConfig = yaml.parse(
+        fs.readFileSync(pnpmWorkspacePath, 'utf8'),
+      );
+      if (
+        typeof pnpmWorkspaceConfig === 'object' &&
+        Array.isArray(pnpmWorkspaceConfig.packages)
+      ) {
+        return pnpmWorkspaceConfig.packages;
+      }
+    }
+    // Falling back to npm / yarn workspaces
+    const packageJsonPath = path.resolve(packagePath, 'package.json');
+    const {workspaces} = JSON.parse(fs.readFileSync(packageJsonPath, 'utf8'));
+    if (Array.isArray(workspaces)) {
+      return workspaces;
+    } else if (
+      typeof workspaces === 'object' &&
+      Array.isArray(workspaces.packages)
+    ) {
+      // An alternative way for yarn to declare workspace packages
+      return workspaces.packages;
+    }
+  } catch (err) {
+    if (err.code !== 'ENOENT') {
+      logger.debug(`Failed getting workspace root from ${packagePath}: ${err}`);
+    }
+  }
+  return [];
+}
+
+/**
+ * Resolves the root of an npm or yarn workspace, by traversing the file tree
+ * upwards from a `candidatePath` in the search for
+ * - a directory with a package.json
+ * - which has a `workspaces` array of strings
+ * - which (possibly via a glob) includes the project root
+ */
+export function getWorkspaceRoot(
+  projectRoot: string,
+  candidatePath: string = projectRoot,
+): ?string {
+  const workspacePaths = getWorkspacePaths(candidatePath);
+  // If one of the workspaces match the project root, this is the workspace root
+  // Note: While npm workspaces doesn't currently support globs, yarn does, which is why we use micromatch
+  const relativePath = path.relative(candidatePath, projectRoot);
+  // Using this instead of `micromatch.isMatch` to enable excluding patterns
+  if (micromatch([relativePath], workspacePaths).length > 0) {
+    return candidatePath;
+  }
+  // Try one level up
+  const parentDir = path.dirname(candidatePath);
+  if (parentDir !== candidatePath) {
+    return getWorkspaceRoot(projectRoot, parentDir);
+  }
+  return null;
+}
diff --git a/packages/community-cli-plugin/src/utils/loadMetroConfig.js b/packages/community-cli-plugin/src/utils/loadMetroConfig.js
index 44d0d275cb0e..8c471a1e0de7 100644
--- a/packages/community-cli-plugin/src/utils/loadMetroConfig.js
+++ b/packages/community-cli-plugin/src/utils/loadMetroConfig.js
@@ -12,6 +12,7 @@
 import type {Config} from '@react-native-community/cli-types';
 import type {ConfigT, InputConfigT, YargArguments} from 'metro-config';
 
+import {getWorkspaceRoot} from './getWorkspaceRoot';
 import {reactNativePlatformResolver} from './metroPlatformResolver';
 import {CLIError, logger} from '@react-native-community/cli-tools';
 import {loadConfig, mergeConfig, resolveConfig} from 'metro-config';
@@ -53,7 +54,20 @@ function getOverrideConfig(
     );
   }
 
-  return {
+  // Always include the project root as a watch folder, since Metro expects this
+  const watchFolders = [config.projectRoot];
+
+  if (typeof config.watchFolders !== 'undefined') {
+    watchFolders.push(...config.watchFolders);
+  } else {
+    // Fallback to inferring a workspace root
+    const workspaceRoot = getWorkspaceRoot(ctx.root);
+    if (typeof workspaceRoot === 'string') {
+      watchFolders.push(workspaceRoot);
+    }
+  }
+
+  const overrides: InputConfigT = {
     resolver,
     serializer: {
       // We can include multiple copies of InitializeCore here because metro will
@@ -70,7 +84,10 @@ function getOverrideConfig(
         ),
       ],
     },
+    watchFolders,
   };
+
+  return overrides;
 }
 
 /**
@@ -107,10 +124,16 @@ This warning will be removed in future (https://github.com/facebook/metro/issues
     }
   }
 
-  const config = await loadConfig({
-    cwd,
-    ...options,
-  });
+  const config = await loadConfig(
+    {
+      cwd,
+      ...options,
+    },
+    {
+      // Enables users to explicitly specify watchFolders
+      watchFolders: undefined,
+    },
+  );
 
   const overrideConfig = getOverrideConfig(ctx, config);
 
diff --git a/packages/metro-config/index.js b/packages/metro-config/index.js
index 2abf2c8757d4..6ae5fd7c8c72 100644
--- a/packages/metro-config/index.js
+++ b/packages/metro-config/index.js
@@ -8,7 +8,7 @@
  * @noformat
  */
 
-/*:: import type {ConfigT} from 'metro-config'; */
+/*:: import type {InputConfigT} from 'metro-config'; */
 
 const {getDefaultConfig: getBaseConfig, mergeConfig} = require('metro-config');
 
@@ -41,7 +41,7 @@ const INTERNAL_CALLSITES_REGEX = new RegExp(
  */
 function getDefaultConfig(
   projectRoot /*: string */
-) /*: ConfigT */ {
+) /*: InputConfigT */ {
   const config = {
     resolver: {
       resolverMainFields: ['react-native', 'browser', 'main'],
@@ -82,14 +82,17 @@ function getDefaultConfig(
         },
       }),
     },
-    watchFolders: [],
   };
 
   // Set global hook so that the CLI can detect when this config has been loaded
   global.__REACT_NATIVE_METRO_CONFIG_LOADED = true;
 
+  const defaults /* :InputConfigT */ = {...getBaseConfig.getDefaultValues(projectRoot)};
+  // Deleting default empty watchFolders array allow a developer to explicitly specify it
+  delete defaults.watchFolders;
+
   return mergeConfig(
-    getBaseConfig.getDefaultValues(projectRoot),
+    defaults,
     config,
   );
 }
diff --git a/yarn.lock b/yarn.lock
index 0a96c50a3054..ef9162086364 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -3633,7 +3633,7 @@ brace-expansion@^2.0.1:
   dependencies:
     balanced-match "^1.0.0"
 
-braces@^3.0.1, braces@~3.0.2:
+braces@^3.0.1, braces@^3.0.2, braces@~3.0.2:
   version "3.0.2"
   resolved "https://registry.yarnpkg.com/braces/-/braces-3.0.2.tgz#3454e1a462ee8d599e236df336cd9ea4f8afe107"
   integrity sha512-b8um+L1RzM3WDSzvhm6gIz1yfTbBt6YTlcEKAvsmqCZZFw46z626lVj9j1yEPW33H5H+lBQpZMP1k8l+78Ha0A==
@@ -7249,6 +7249,14 @@ micromatch@^4.0.4:
     braces "^3.0.1"
     picomatch "^2.2.3"
 
+micromatch@^4.0.5:
+  version "4.0.5"
+  resolved "https://registry.yarnpkg.com/micromatch/-/micromatch-4.0.5.tgz#bc8999a7cbbf77cdc89f132f6e467051b49090c6"
+  integrity sha512-DMy+ERcEW2q8Z2Po+WNXuw3c5YaUSFjAO5GsJqfEl7UjvtIuFKO6ZrKvcItdy98dwFI2N1tg3zNIdKaQT+aNdA==
+  dependencies:
+    braces "^3.0.2"
+    picomatch "^2.3.1"
+
 mime-db@1.52.0, "mime-db@>= 1.36.0 < 2":
   version "1.52.0"
   resolved "https://registry.yarnpkg.com/mime-db/-/mime-db-1.52.0.tgz#bbabcdc02859f4987301c856e3387ce5ec43bf70"
@@ -7815,7 +7823,7 @@ picocolors@^1.0.0:
   resolved "https://registry.yarnpkg.com/picocolors/-/picocolors-1.0.0.tgz#cb5bdc74ff3f51892236eaf79d68bc44564ab81c"
   integrity sha512-1fygroTLlHu66zi26VoTDv8yRgm0Fccecssto+MhsZ0D/DGW2sm8E8AjW7NU5VVTRt5GxbeZ5qBuJr+HyLYkjQ==
 
-picomatch@^2.0.4, picomatch@^2.2.1, picomatch@^2.2.3:
+picomatch@^2.0.4, picomatch@^2.2.1, picomatch@^2.2.3, picomatch@^2.3.1:
   version "2.3.1"
   resolved "https://registry.yarnpkg.com/picomatch/-/picomatch-2.3.1.tgz#3ba3833733646d9d3e4995946c1365a67fb07a42"
   integrity sha512-JU3teHTNjmE2VCGFzuY8EXzCDVwEqB2a8fsIvwaStHhAWJEeVd1o1QD80CU6+ZdEXXSLbSsuLwJjkCBWqRQUVA==
@@ -9586,6 +9594,11 @@ yaml@^2.2.1:
   resolved "https://registry.yarnpkg.com/yaml/-/yaml-2.3.1.tgz#02fe0975d23cd441242aa7204e09fc28ac2ac33b"
   integrity sha512-2eHWfjaoXgTBC2jNM1LRef62VQa0umtvRiDSk6HSzW7RvS5YtkabJrwYLLEKWBc8a5U2PTSCs+dJjUTJdlHsWQ==
 
+yaml@^2.3.4:
+  version "2.3.4"
+  resolved "https://registry.yarnpkg.com/yaml/-/yaml-2.3.4.tgz#53fc1d514be80aabf386dc6001eb29bf3b7523b2"
+  integrity sha512-8aAvwVUSHpfEqTQ4w/KMlf3HcRdt50E5ODIQJBw1fQ5RL34xabzxtUlzTXVqc4rkZsPbvrXKWnABCD7kWSmocA==
+
 yargs-parser@^18.1.2:
   version "18.1.3"
   resolved "https://registry.yarnpkg.com/yargs-parser/-/yargs-parser-18.1.3.tgz#be68c4975c6b2abf469236b0c870362fab09a7b0"