diff --git a/CHANGELOG.md b/CHANGELOG.md
index 3afb2bff7..5728292f4 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,9 @@
 # master
 
+* Add support for `config.action_view.annotate_template_file_names` (coming in Rails 6.1).
+
+    *Joel Hawksley*
+
 * Remove initializer requirement from the component.
 
     *Vasiliy Ermolovich*
diff --git a/lib/view_component/base.rb b/lib/view_component/base.rb
index b710b0f2c..ddcbc51d1 100644
--- a/lib/view_component/base.rb
+++ b/lib/view_component/base.rb
@@ -77,6 +77,10 @@ def render?
       true
     end
 
+    def self.short_identifier
+      @short_identifier ||= defined?(Rails.root) ? source_location.sub("#{Rails.root}/", "") : source_location
+    end
+
     def initialize(*); end
 
     def render(options = {}, args = {}, &block)
@@ -180,8 +184,20 @@ def compile(raise_template_errors: false)
           return false
         end
 
+        # If template name annotations are turned on, a line is dynamically
+        # added with a comment. In this case, we want to return a different
+        # starting line number so errors that are raised will point to the
+        # correct line in the component template.
+        line_number =
+          if ActionView::Base.respond_to?(:annotate_template_file_names) &&
+            ActionView::Base.annotate_template_file_names
+            -2
+          else
+            -1
+          end
+
         templates.each do |template|
-          class_eval <<-RUBY, template[:path], -1
+          class_eval <<-RUBY, template[:path], line_number
             def #{call_method_name(template[:variant])}
               @output_buffer = ActionView::OutputBuffer.new
               #{compiled_template(template[:path])}
@@ -271,7 +287,7 @@ def compiled_template(file_path)
 
         if handler.method(:call).parameters.length > 1
           handler.call(self, template)
-        else # remove before upstreaming into Rails
+        else
           handler.call(OpenStruct.new(source: template, identifier: identifier, type: type))
         end
       end
diff --git a/test/config/application.rb b/test/config/application.rb
index 52b0d0a7a..b9658c960 100644
--- a/test/config/application.rb
+++ b/test/config/application.rb
@@ -7,7 +7,6 @@
 require "action_view/railtie"
 require "view_component/engine"
 require "sprockets/railtie"
-require "better_html"
 
 require "haml"
 require "slim"
diff --git a/test/config/environments/test.rb b/test/config/environments/test.rb
index e14d982c8..5a7e8d4ea 100644
--- a/test/config/environments/test.rb
+++ b/test/config/environments/test.rb
@@ -36,5 +36,7 @@
   # Print deprecation notices to the stderr
   config.active_support.deprecation = :stderr
 
+  config.action_view.annotate_template_file_names = true if Rails.version.to_f >= 6.1
+
   config.eager_load = true
 end
diff --git a/test/view_component/better_html_test.rb b/test/view_component/better_html_test.rb
index e6a67f3ad..f1e1aabad 100644
--- a/test/view_component/better_html_test.rb
+++ b/test/view_component/better_html_test.rb
@@ -1,6 +1,7 @@
 # frozen_string_literal: true
 
 require "test_helper"
+require "better_html"
 require "better_html/test_helper/safe_erb_tester"
 
 # This test exists to ensure basic non-breaking compatiblity with Shopify/better_html
diff --git a/test/view_component/integration_test.rb b/test/view_component/integration_test.rb
index 6921c93da..2b49da03a 100644
--- a/test/view_component/integration_test.rb
+++ b/test/view_component/integration_test.rb
@@ -10,6 +10,17 @@ class IntegrationTest < ActionDispatch::IntegrationTest
     assert_select("div", "Foo\n  bar")
   end
 
+  if Rails.version.to_f >= 6.1
+    test "rendering component with template annotations enabled" do
+      get "/"
+      assert_response :success
+
+      assert_includes response.body, "BEGIN app/components/erb_component.rb"
+
+      assert_select("div", "Foo\n  bar")
+    end
+  end
+
   test "rendering component in a controller" do
     get "/controller_inline_baseline"
 
@@ -24,7 +35,7 @@ class IntegrationTest < ActionDispatch::IntegrationTest
 
     inline_response = response.body
 
-    assert_equal baseline_response, inline_response
+    assert_includes inline_response, baseline_response
   end
 
   test "rendering component with content" do
@@ -48,8 +59,7 @@ class IntegrationTest < ActionDispatch::IntegrationTest
     get "/partial"
     assert_response :success
 
-    assert_includes response.body, "partial:<div>hello,partial world!"
-    assert_includes response.body, "component:<div>hello,partial world!"
+    assert_select("div", "hello,partial world!", count: 2)
   end
 
   test "rendering component without variant" do
@@ -111,7 +121,7 @@ class IntegrationTest < ActionDispatch::IntegrationTest
 
     get "/render_check"
     assert_response :success
-    assert_empty response.body.strip
+    refute_includes response.body, "Rendered"
   end
 
   test "renders component preview" do
diff --git a/test/view_component/view_component_test.rb b/test/view_component/view_component_test.rb
index de13a005c..0f9d09286 100644
--- a/test/view_component/view_component_test.rb
+++ b/test/view_component/view_component_test.rb
@@ -89,7 +89,7 @@ def test_renders_erb_template
   def test_renders_partial_template
     render_inline(PartialComponent.new)
 
-    assert_text("hello,partial world!\n\nhello,partial world!")
+    assert_text("hello,partial world!", count: 2)
   end
 
   def test_renders_content_for_template
@@ -379,7 +379,6 @@ def test_backtrace_returns_correct_file_and_line_number
     assert_match %r[app/components/exception_in_template_component\.html\.erb:2], error.backtrace[0]
   end
 
-
   def test_render_collection
     products = [OpenStruct.new(name: "Radio clock"), OpenStruct.new(name: "Mints")]
     render_inline(ProductComponent.with_collection(products, notice: "On sale"))