diff --git a/integration-tests/devmode/pom.xml b/integration-tests/devmode/pom.xml
index f149a3b7510d3..61ff9b3365fc3 100644
--- a/integration-tests/devmode/pom.xml
+++ b/integration-tests/devmode/pom.xml
@@ -84,6 +84,11 @@
             <artifactId>quarkus-junit5-internal</artifactId>
             <scope>test</scope>
         </dependency>
+        <dependency>
+            <groupId>io.quarkus</groupId>
+            <artifactId>quarkus-junit5-component</artifactId>
+            <scope>test</scope>
+        </dependency>
         <dependency>
             <groupId>io.rest-assured</groupId>
             <artifactId>rest-assured</artifactId>
diff --git a/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentContinuousTestingTest.java b/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentContinuousTestingTest.java
new file mode 100644
index 0000000000000..7bbc7ccb4698a
--- /dev/null
+++ b/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentContinuousTestingTest.java
@@ -0,0 +1,41 @@
+package io.quarkus.test.component;
+
+import static org.junit.jupiter.api.Assertions.assertEquals;
+
+import org.jboss.shrinkwrap.api.ShrinkWrap;
+import org.jboss.shrinkwrap.api.asset.StringAsset;
+import org.jboss.shrinkwrap.api.spec.JavaArchive;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.api.extension.RegisterExtension;
+
+import io.quarkus.test.ContinuousTestingTestUtils;
+import io.quarkus.test.ContinuousTestingTestUtils.TestStatus;
+import io.quarkus.test.QuarkusDevModeTest;
+
+public class ComponentContinuousTestingTest {
+
+    @RegisterExtension
+    static final QuarkusDevModeTest config = new QuarkusDevModeTest()
+            .withApplicationRoot(
+                    root -> root.addClass(ComponentFoo.class).add(new StringAsset(ContinuousTestingTestUtils.appProperties()),
+                            "application.properties"))
+            .setTestArchiveProducer(() -> ShrinkWrap.create(JavaArchive.class)
+                    .addClass(ComponentUT.class));
+
+    @Test
+    public void test() {
+        ContinuousTestingTestUtils utils = new ContinuousTestingTestUtils();
+        TestStatus ts = utils.waitForNextCompletion();
+        assertEquals(0L, ts.getTestsFailed());
+        assertEquals(1L, ts.getTestsPassed());
+        assertEquals(0L, ts.getTestsSkipped());
+
+        config.modifySourceFile(ComponentFoo.class, s -> s.replace("return bar;", "return bar + bar;"));
+
+        ts = utils.waitForNextCompletion();
+        assertEquals(1L, ts.getTestsFailed());
+        assertEquals(0L, ts.getTestsPassed());
+        assertEquals(0L, ts.getTestsSkipped());
+    }
+
+}
diff --git a/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentFoo.java b/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentFoo.java
new file mode 100644
index 0000000000000..5b12c6a524fe3
--- /dev/null
+++ b/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentFoo.java
@@ -0,0 +1,17 @@
+package io.quarkus.test.component;
+
+import jakarta.inject.Singleton;
+
+import org.eclipse.microprofile.config.inject.ConfigProperty;
+
+@Singleton
+public class ComponentFoo {
+
+    @ConfigProperty(name = "bar", defaultValue = "baz")
+    String bar;
+
+    String ping() {
+        return bar;
+    }
+
+}
diff --git a/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentUT.java b/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentUT.java
new file mode 100644
index 0000000000000..d6a6e4302ed5d
--- /dev/null
+++ b/integration-tests/devmode/src/test/java/io/quarkus/test/component/ComponentUT.java
@@ -0,0 +1,21 @@
+package io.quarkus.test.component;
+
+import static org.junit.jupiter.api.Assertions.assertEquals;
+
+import jakarta.inject.Inject;
+
+import org.junit.jupiter.api.Test;
+
+@QuarkusComponentTest
+@TestConfigProperty(key = "bar", value = "qux")
+public class ComponentUT {
+
+    @Inject
+    ComponentFoo foo;
+
+    @Test
+    public void test() {
+        assertEquals("qux", foo.ping());
+    }
+
+}
diff --git a/test-framework/junit5-component/src/main/java/io/quarkus/test/component/QuarkusComponentTestExtension.java b/test-framework/junit5-component/src/main/java/io/quarkus/test/component/QuarkusComponentTestExtension.java
index a5eaebcb5c164..00960605b882a 100644
--- a/test-framework/junit5-component/src/main/java/io/quarkus/test/component/QuarkusComponentTestExtension.java
+++ b/test-framework/junit5-component/src/main/java/io/quarkus/test/component/QuarkusComponentTestExtension.java
@@ -505,6 +505,9 @@ private ClassLoader initArcContainer(ExtensionContext extensionContext, Collecti
             throw new IllegalStateException("Failed to create index", e);
         }
 
+        ClassLoader testClassClassLoader = testClass.getClassLoader();
+        // The test class is loaded by the QuarkusClassLoader in continuous testing environment
+        boolean isContinuousTesting = testClassClassLoader instanceof QuarkusClassLoader;
         ClassLoader oldTccl = Thread.currentThread().getContextClassLoader();
 
         IndexView computingIndex = BeanArchives.buildComputingBeanArchiveIndex(oldTccl,
@@ -541,11 +544,13 @@ private ClassLoader initArcContainer(ExtensionContext extensionContext, Collecti
 
             // We need collect all generated resources so that we can remove them after the test
             // NOTE: previously we kept the generated framework classes (to speedup subsequent test runs) but that breaks the existing @QuarkusTests
-            Set<Path> generatedResources = new HashSet<>();
+            Set<Path> generatedResources;
 
+            // E.g. target/generated-arc-sources/org/acme/ComponentsProvider
             File componentsProviderFile = getComponentsProviderFile(testClass);
-            if (testClass.getClassLoader() instanceof QuarkusClassLoader) {
-                //continuous testing environment
+
+            if (isContinuousTesting) {
+                generatedResources = Set.of();
                 Map<String, byte[]> classes = new HashMap<>();
                 builder.setOutput(new ResourceOutput() {
                     @Override
@@ -566,11 +571,12 @@ public void writeResource(Resource resource) throws IOException {
                                 }
                                 break;
                             default:
-                                throw new IllegalArgumentException();
+                                throw new IllegalArgumentException("Unsupported resource type: " + resource.getType());
                         }
                     }
                 });
             } else {
+                generatedResources = new HashSet<>();
                 File testOutputDirectory = getTestOutputDirectory(testClass);
                 builder.setOutput(new ResourceOutput() {
                     @Override
@@ -590,7 +596,7 @@ public void writeResource(Resource resource) throws IOException {
                                 }
                                 break;
                             default:
-                                throw new IllegalArgumentException();
+                                throw new IllegalArgumentException("Unsupported resource type: " + resource.getType());
                         }
                     }
                 });
@@ -748,7 +754,9 @@ public void accept(BytecodeTransformer transformer) {
             }
 
             // Use a custom ClassLoader to load the generated ComponentsProvider file
-            QuarkusComponentTestClassLoader testClassLoader = new QuarkusComponentTestClassLoader(oldTccl,
+            // In continuous testing the CL that loaded the test class must be used as the parent CL
+            QuarkusComponentTestClassLoader testClassLoader = new QuarkusComponentTestClassLoader(
+                    isContinuousTesting ? testClassClassLoader : oldTccl,
                     componentsProviderFile,
                     null);
             Thread.currentThread().setContextClassLoader(testClassLoader);
@@ -1077,18 +1085,18 @@ private File getComponentsProviderFile(Class<?> testClass) {
         File targetDir = new File("target");
         if (targetDir.canWrite()) {
             // maven build
-            generatedSourcesDirectory = new File("target/generated-arc-sources");
+            generatedSourcesDirectory = new File(targetDir, "generated-arc-sources");
         } else {
             File buildDir = new File("build");
             if (buildDir.canWrite()) {
                 // gradle build
-                generatedSourcesDirectory = new File("build/generated-arc-sources");
+                generatedSourcesDirectory = new File(buildDir, "generated-arc-sources");
             } else {
                 generatedSourcesDirectory = new File("quarkus-component-test/generated-arc-sources");
             }
         }
-        return new File(generatedSourcesDirectory,
-                nameToPath(testClass.getPackage().getName()) + File.pathSeparator + ComponentsProvider.class.getSimpleName());
+        return new File(new File(generatedSourcesDirectory, nameToPath(testClass.getPackage().getName())),
+                ComponentsProvider.class.getSimpleName());
     }
 
 }