diff --git a/.github/workflows/main.yml b/.github/workflows/main.yml
index 798b17c4dd..80602bde4b 100644
--- a/.github/workflows/main.yml
+++ b/.github/workflows/main.yml
@@ -42,7 +42,9 @@ jobs:
         uses: actions/setup-node@v4
         with:
           node-version: ${{ matrix.node-version }}
-          cache: yarn
+          # Disable cache for Node 22 due to V8 bug in 22.21.0
+          # https://github.com/nodejs/node/issues/56010
+          cache: ${{ matrix.node-version != '22' && 'yarn' || '' }}
           cache-dependency-path: '**/yarn.lock'
       - name: Print system information
         run: |
@@ -123,7 +125,9 @@ jobs:
         uses: actions/setup-node@v4
         with:
           node-version: ${{ matrix.node-version }}
-          cache: yarn
+          # Disable cache for Node 22 due to V8 bug in 22.21.0
+          # https://github.com/nodejs/node/issues/56010
+          cache: ${{ matrix.node-version != '22' && 'yarn' || '' }}
           cache-dependency-path: '**/yarn.lock'
       - name: Print system information
         run: |
diff --git a/CHANGELOG.md b/CHANGELOG.md
index ebe72b2fc7..23cad6a84f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -31,6 +31,15 @@ Changes since the last non-beta release.
 
 - **Improved RSC Payload Error Handling**: Errors that happen during generation of RSC payload are transferred properly to rails side and logs the error message and stack. [PR #1888](https://github.com/shakacode/react_on_rails/pull/1888) by [AbanoubGhadban](https://github.com/AbanoubGhadban).
 
+#### Changed
+
+- **Shakapacker 9.0.0 Upgrade**: Upgraded Shakapacker from 8.2.0 to 9.0.0 with Babel transpiler configuration for compatibility. Key changes include:
+  - Configured `javascript_transpiler: babel` in shakapacker.yml (Shakapacker 9.0 defaults to SWC which has PropTypes handling issues)
+  - Added precompile hook support via `bin/shakapacker-precompile-hook` for ReScript builds and pack generation
+  - Configured CSS Modules to use default exports (`namedExport: false`) for backward compatibility with existing `import styles from` syntax
+  - Fixed webpack configuration to process SCSS rules and CSS loaders in a single pass for better performance
+    [PR 1904](https://github.com/shakacode/react_on_rails/pull/1904) by [justin808](https://github.com/justin808).
+
 #### Bug Fixes
 
 - **Use as Git dependency**: All packages can now be installed as Git dependencies. This is useful for development and testing purposes. See [CONTRIBUTING.md](./CONTRIBUTING.md#git-dependencies) for documentation. [PR #1873](https://github.com/shakacode/react_on_rails/pull/1873) by [alexeyr-ci2](https://github.com/alexeyr-ci2).
diff --git a/Gemfile.development_dependencies b/Gemfile.development_dependencies
index e11cd21c92..30acfd8ab5 100644
--- a/Gemfile.development_dependencies
+++ b/Gemfile.development_dependencies
@@ -1,6 +1,6 @@
 # frozen_string_literal: true
 
-gem "shakapacker", "8.2.0"
+gem "shakapacker", "9.0.0"
 gem "bootsnap", require: false
 gem "rails", "~> 7.1"
 
diff --git a/Gemfile.lock b/Gemfile.lock
index 5fe05932b3..2d83409248 100644
--- a/Gemfile.lock
+++ b/Gemfile.lock
@@ -342,7 +342,7 @@ GEM
       rubyzip (>= 1.2.2, < 3.0)
       websocket (~> 1.0)
     semantic_range (3.1.0)
-    shakapacker (8.2.0)
+    shakapacker (9.0.0)
       activesupport (>= 5.2)
       package_json
       rack-proxy (>= 0.6.1)
@@ -440,7 +440,7 @@ DEPENDENCIES
   scss_lint
   sdoc
   selenium-webdriver (= 4.9.0)
-  shakapacker (= 8.2.0)
+  shakapacker (= 9.0.0)
   spring (~> 4.0)
   sprockets (~> 4.0)
   sqlite3 (~> 1.6)
diff --git a/knip.ts b/knip.ts
index 12801f717a..97f8e0c837 100644
--- a/knip.ts
+++ b/knip.ts
@@ -10,6 +10,7 @@ const config: KnipConfig = {
       ignoreBinaries: [
         // Has to be installed globally
         'yalc',
+        // Used in package.json scripts (devDependency, so unlisted in production mode)
         'nps',
         // Pro package binaries used in Pro workflows
         'playwright',
@@ -109,8 +110,9 @@ const config: KnipConfig = {
         'bin/.*',
       ],
       ignoreDependencies: [
-        // Knip thinks it can be a devDependency, but it's supposed to be in dependencies.
+        // Build-time dependencies not detected by Knip in any mode
         '@babel/runtime',
+        'mini-css-extract-plugin',
         // There's no ReScript plugin for Knip
         '@rescript/react',
         // The Babel plugin fails to detect it
@@ -120,17 +122,15 @@ const config: KnipConfig = {
         'node-libs-browser',
         // The below dependencies are not detected by the Webpack plugin
         // due to the config issue.
-        'css-loader',
         'expose-loader',
         'file-loader',
         'imports-loader',
-        'mini-css-extract-plugin',
         'null-loader',
-        'sass',
-        'sass-loader',
         'sass-resources-loader',
         'style-loader',
         'url-loader',
+        // Transitive dependency of shakapacker but listed as direct dependency
+        'webpack-merge',
       ],
     },
   },
diff --git a/spec/dummy/Gemfile.lock b/spec/dummy/Gemfile.lock
index 7641720904..018db9efe3 100644
--- a/spec/dummy/Gemfile.lock
+++ b/spec/dummy/Gemfile.lock
@@ -346,7 +346,7 @@ GEM
       rubyzip (>= 1.2.2, < 3.0)
       websocket (~> 1.0)
     semantic_range (3.1.0)
-    shakapacker (8.2.0)
+    shakapacker (9.0.0)
       activesupport (>= 5.2)
       package_json
       rack-proxy (>= 0.6.1)
@@ -441,7 +441,7 @@ DEPENDENCIES
   scss_lint
   sdoc
   selenium-webdriver (= 4.9.0)
-  shakapacker (= 8.2.0)
+  shakapacker (= 9.0.0)
   spring (~> 4.0)
   sprockets (~> 4.0)
   sqlite3 (~> 1.6)
diff --git a/spec/dummy/babel.config.js b/spec/dummy/babel.config.js
index 6aa1d24be2..b401544fa1 100644
--- a/spec/dummy/babel.config.js
+++ b/spec/dummy/babel.config.js
@@ -1,4 +1,5 @@
-const defaultConfigFunc = require('shakapacker/package/babel/preset');
+// eslint-disable-next-line import/extensions
+const defaultConfigFunc = require('shakapacker/package/babel/preset.js');
 
 module.exports = function createBabelConfig(api) {
   const resultConfig = defaultConfigFunc(api);
diff --git a/spec/dummy/bin/shakapacker-precompile-hook b/spec/dummy/bin/shakapacker-precompile-hook
new file mode 100755
index 0000000000..b650b02db5
--- /dev/null
+++ b/spec/dummy/bin/shakapacker-precompile-hook
@@ -0,0 +1,101 @@
+#!/usr/bin/env ruby
+# frozen_string_literal: true
+
+# Shakapacker precompile hook
+# This script runs before Shakapacker compilation in both development and production.
+# See: https://github.com/shakacode/shakapacker/blob/main/docs/precompile_hook.md
+
+require "fileutils"
+
+# Find Rails root by walking upward looking for config/environment.rb
+def find_rails_root
+  dir = Dir.pwd
+  loop do
+    return dir if File.exist?(File.join(dir, "config", "environment.rb"))
+
+    parent = File.dirname(dir)
+    return nil if parent == dir # Reached filesystem root
+
+    dir = parent
+  end
+end
+
+# Build ReScript if needed
+def build_rescript_if_needed
+  # Check for both old (bsconfig.json) and new (rescript.json) config files
+  return unless File.exist?("bsconfig.json") || File.exist?("rescript.json")
+
+  puts "🔧 Building ReScript..."
+
+  # Cross-platform package manager detection
+  yarn_available = system("yarn", "--version", out: File::NULL, err: File::NULL)
+  npm_available = system("npm", "--version", out: File::NULL, err: File::NULL)
+
+  success = if yarn_available
+              system("yarn", "build:rescript")
+            elsif npm_available
+              system("npm", "run", "build:rescript")
+            else
+              warn "⚠️  Warning: Neither yarn nor npm found. Skipping ReScript build."
+              return
+            end
+
+  if success
+    puts "✅ ReScript build completed successfully"
+  else
+    warn "❌ ReScript build failed"
+    exit 1
+  end
+end
+
+# Generate React on Rails packs if needed
+# rubocop:disable Metrics/CyclomaticComplexity
+def generate_packs_if_needed
+  # Find Rails root directory
+  rails_root = find_rails_root
+  return unless rails_root
+
+  # Check if React on Rails initializer exists
+  initializer_path = File.join(rails_root, "config", "initializers", "react_on_rails.rb")
+  return unless File.exist?(initializer_path)
+
+  # Check if auto-pack generation is configured (match actual config assignments, not comments)
+  config_file = File.read(initializer_path)
+  # Match uncommented configuration lines only (lines not starting with #)
+  has_auto_load = config_file =~ /^\s*(?!#).*config\.auto_load_bundle\s*=/
+  has_components_subdir = config_file =~ /^\s*(?!#).*config\.components_subdirectory\s*=/
+  return unless has_auto_load || has_components_subdir
+
+  puts "📦 Generating React on Rails packs..."
+
+  # Cross-platform bundle availability check
+  bundle_available = system("bundle", "--version", out: File::NULL, err: File::NULL)
+  return unless bundle_available
+
+  # Check if rake task exists (use array form for security)
+  task_list = IO.popen(["bundle", "exec", "rails", "-T"], err: [:child, :out], &:read)
+  return unless task_list.include?("react_on_rails:generate_packs")
+
+  # Use array form for better cross-platform support
+  success = system("bundle", "exec", "rails", "react_on_rails:generate_packs")
+
+  if success
+    puts "✅ Pack generation completed successfully"
+  else
+    warn "❌ Pack generation failed"
+    exit 1
+  end
+end
+# rubocop:enable Metrics/CyclomaticComplexity
+
+# Main execution
+begin
+  build_rescript_if_needed
+  generate_packs_if_needed
+
+  exit 0
+rescue StandardError => e
+  warn "❌ Precompile hook failed: #{e.message}"
+  warn e.backtrace.join("\n")
+  exit 1
+end
diff --git a/spec/dummy/config/shakapacker.yml b/spec/dummy/config/shakapacker.yml
index c58b284594..c9565dbb5f 100644
--- a/spec/dummy/config/shakapacker.yml
+++ b/spec/dummy/config/shakapacker.yml
@@ -5,6 +5,14 @@ default: &default
   source_entry_path: packs
   public_root_path: public
 
+  # Use Babel instead of SWC (Shakapacker 9.0 default) for better compatibility
+  # SWC has issues with PropTypes handling
+  javascript_transpiler: babel
+
+  # Hook to run before compilation (e.g., for ReScript builds, pack generation)
+  # See: https://github.com/shakacode/shakapacker/blob/main/docs/precompile_hook.md
+  precompile_hook: bin/shakapacker-precompile-hook
+
   cache_path: tmp/cache/shakapacker
   webpack_compile_output: false
   ensure_consistent_versioning: true
diff --git a/spec/dummy/config/webpack/commonWebpackConfig.js b/spec/dummy/config/webpack/commonWebpackConfig.js
index 66ed67094c..41f8a5647e 100644
--- a/spec/dummy/config/webpack/commonWebpackConfig.js
+++ b/spec/dummy/config/webpack/commonWebpackConfig.js
@@ -21,10 +21,37 @@ const sassLoaderConfig = {
   },
 };
 
-const scssConfigIndex = baseClientWebpackConfig.module.rules.findIndex((config) =>
-  '.scss'.match(config.test),
-);
-baseClientWebpackConfig.module.rules[scssConfigIndex]?.use.push(sassLoaderConfig);
+// Process webpack rules in single pass for efficiency
+baseClientWebpackConfig.module.rules.forEach((rule) => {
+  if (Array.isArray(rule.use)) {
+    // Add sass-resources-loader to all SCSS rules (both .scss and .module.scss)
+    if (rule.test && '.scss'.match(rule.test)) {
+      rule.use.push(sassLoaderConfig);
+    }
+
+    // Configure CSS Modules to use default exports (Shakapacker 9.0 compatibility)
+    // Shakapacker 9.0 defaults to namedExport: true, but we use default imports
+    // To restore backward compatibility with existing code using `import styles from`
+    rule.use.forEach((loader) => {
+      if (
+        loader &&
+        typeof loader === 'object' &&
+        loader.loader &&
+        typeof loader.loader === 'string' &&
+        loader.loader.includes('css-loader') &&
+        loader.options &&
+        typeof loader.options === 'object' &&
+        loader.options.modules &&
+        typeof loader.options.modules === 'object'
+      ) {
+        // eslint-disable-next-line no-param-reassign
+        loader.options.modules.namedExport = false;
+        // eslint-disable-next-line no-param-reassign
+        loader.options.modules.exportLocalsConvention = 'camelCase';
+      }
+    });
+  }
+});
 
 // add jquery
 const exposeJQuery = {
diff --git a/spec/dummy/package.json b/spec/dummy/package.json
index 86550eade3..5cbed3ab13 100644
--- a/spec/dummy/package.json
+++ b/spec/dummy/package.json
@@ -51,7 +51,7 @@
     "sass": "^1.43.4",
     "sass-loader": "^12.3.0",
     "sass-resources-loader": "^2.1.0",
-    "shakapacker": "8.2.0",
+    "shakapacker": "9.0.0",
     "style-loader": "^3.3.1",
     "terser-webpack-plugin": "5.3.1",
     "url-loader": "^4.0.0",
diff --git a/spec/dummy/yarn.lock b/spec/dummy/yarn.lock
index 7e26a59417..c2c72df59e 100644
--- a/spec/dummy/yarn.lock
+++ b/spec/dummy/yarn.lock
@@ -3236,6 +3236,11 @@ find-up@^5.0.0:
     locate-path "^6.0.0"
     path-exists "^4.0.0"
 
+flat@^5.0.2:
+  version "5.0.2"
+  resolved "https://registry.npmjs.org/flat/-/flat-5.0.2.tgz#8ca6fe332069ffa9d324c327198c598259ceb241"
+  integrity sha512-b6suED+5/3rTpUBdG1gupIl8MPFCAMA0QXwmljLhvCUKcUvdE4gWky9zpuGCcXHOsz4J9wPGNWq6OKpmIzz3hQ==
+
 follow-redirects@^1.0.0:
   version "1.14.5"
   resolved "https://registry.yarnpkg.com/follow-redirects/-/follow-redirects-1.14.5.tgz#f09a5848981d3c772b5392309778523f8d85c381"
@@ -5648,13 +5653,14 @@ sha.js@^2.4.0, sha.js@^2.4.8:
     inherits "^2.0.1"
     safe-buffer "^5.0.1"
 
-shakapacker@8.2.0:
-  version "8.2.0"
-  resolved "https://registry.yarnpkg.com/shakapacker/-/shakapacker-8.2.0.tgz#c7bed87b8be2ae565cfe616f68552be545c77e14"
-  integrity sha512-Ct7BFqJVnKbxdqCzG+ja7Q6LPt/PlB7sSVBfG5jsAvmVCADM05cuoNwEgYNjFGKbDzHAxUqy5XgoI9Y030+JKQ==
+shakapacker@9.0.0:
+  version "9.0.0"
+  resolved "https://registry.npmjs.org/shakapacker/-/shakapacker-9.0.0.tgz#36fd2e81ffa3a01075222526b2b079bfd60a6efc"
+  integrity sha512-q+8VU3AQhPpCLlZmEmyooELmpa10FPXk631rrg46pLAYO40jnEeyK01BtI0SVNvz/nI+QFz1DwZE8NKVk/PRgw==
   dependencies:
     js-yaml "^4.1.0"
     path-complete-extname "^1.0.0"
+    webpack-merge "^5.8.0"
 
 shallow-clone@^3.0.0:
   version "3.0.1"
@@ -6340,6 +6346,15 @@ webpack-merge@5, webpack-merge@^5.7.3:
     clone-deep "^4.0.1"
     wildcard "^2.0.0"
 
+webpack-merge@^5.8.0:
+  version "5.10.0"
+  resolved "https://registry.npmjs.org/webpack-merge/-/webpack-merge-5.10.0.tgz#a3ad5d773241e9c682803abf628d4cd62b8a4177"
+  integrity sha512-+4zXKdx7UnO+1jaN4l2lHVD+mFvnlZQP/6ljaJVb4SZiwIKeUnrT5l0gkT8z+n4hKpC+jpOv6O9R+gLtag7pSA==
+  dependencies:
+    clone-deep "^4.0.1"
+    flat "^5.0.2"
+    wildcard "^2.0.0"
+
 webpack-sources@^3.2.3:
   version "3.2.3"
   resolved "https://registry.yarnpkg.com/webpack-sources/-/webpack-sources-3.2.3.tgz#2d4daab8451fd4b240cc27055ff6a0c2ccea0cde"