diff --git a/.changeset/sharp-rings-march.md b/.changeset/sharp-rings-march.md
new file mode 100644
index 000000000000..bd3a5e531210
--- /dev/null
+++ b/.changeset/sharp-rings-march.md
@@ -0,0 +1,5 @@
+---
+'svelte': minor
+---
+
+feat: allow `$state` in return statements
diff --git a/documentation/docs/02-runes/02-$state.md b/documentation/docs/02-runes/02-$state.md
index 16630a977b62..e98c66f08ffb 100644
--- a/documentation/docs/02-runes/02-$state.md
+++ b/documentation/docs/02-runes/02-$state.md
@@ -65,6 +65,19 @@ let { done, text } = todos[0];
 todos[0].done = !todos[0].done;
 ```
 
+You can also use `$state` in return statements to proxy their argument:
+
+```js
+function createCounter() {
+	return $state({
+		count: 0,
+		increment() {
+			this.count++;
+		}
+	});
+}
+```
+
 ### Classes
 
 You can also use `$state` in class fields (whether public or private):
diff --git a/documentation/docs/98-reference/.generated/client-warnings.md b/documentation/docs/98-reference/.generated/client-warnings.md
index 77d1df4cdde2..7bfc20e58905 100644
--- a/documentation/docs/98-reference/.generated/client-warnings.md
+++ b/documentation/docs/98-reference/.generated/client-warnings.md
@@ -219,6 +219,12 @@ Reactive `$state(...)` proxies and the values they proxy have different identiti
 
 To resolve this, ensure you're comparing values where both values were created with `$state(...)`, or neither were. Note that `$state.raw(...)` will _not_ create a state proxy.
 
+### state_return_not_proxyable
+
+```
+The argument passed to a `$state` call in a return statement must be a plain object or array. Otherwise, the `$state` call will have no effect
+```
+
 ### transition_slide_display
 
 ```
diff --git a/packages/svelte/messages/client-warnings/warnings.md b/packages/svelte/messages/client-warnings/warnings.md
index f8e9ebd8a047..7c644409ce43 100644
--- a/packages/svelte/messages/client-warnings/warnings.md
+++ b/packages/svelte/messages/client-warnings/warnings.md
@@ -185,6 +185,10 @@ To fix it, either create callback props to communicate changes, or mark `person`
 
 To resolve this, ensure you're comparing values where both values were created with `$state(...)`, or neither were. Note that `$state.raw(...)` will _not_ create a state proxy.
 
+## state_return_not_proxyable
+
+> The argument passed to a `$state` call in a return statement must be a plain object or array. Otherwise, the `$state` call will have no effect
+
 ## transition_slide_display
 
 > The `slide` transition does not work correctly for elements with `display: %value%`
diff --git a/packages/svelte/src/compiler/phases/2-analyze/visitors/CallExpression.js b/packages/svelte/src/compiler/phases/2-analyze/visitors/CallExpression.js
index 904817b014e4..b788e2873735 100644
--- a/packages/svelte/src/compiler/phases/2-analyze/visitors/CallExpression.js
+++ b/packages/svelte/src/compiler/phases/2-analyze/visitors/CallExpression.js
@@ -112,6 +112,20 @@ export function CallExpression(node, context) {
 		}
 
 		case '$state':
+			if (
+				(!(parent.type === 'VariableDeclarator' || parent.type === 'ReturnStatement') ||
+					get_parent(context.path, -3).type === 'ConstTag') &&
+				!(parent.type === 'PropertyDefinition' && !parent.static && !parent.computed) &&
+				!(parent.type === 'ArrowFunctionExpression' && parent.body === node)
+			) {
+				e.state_invalid_placement(node, rune);
+			}
+
+			if (node.arguments.length > 1) {
+				e.rune_invalid_arguments_length(node, rune, 'zero or one arguments');
+			}
+
+			break;
 		case '$state.raw':
 		case '$derived':
 		case '$derived.by':
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/CallExpression.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/CallExpression.js
index b110f8eae82c..5e16a5055060 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/CallExpression.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/CallExpression.js
@@ -4,12 +4,14 @@ import { dev, is_ignored } from '../../../../state.js';
 import * as b from '#compiler/builders';
 import { get_rune } from '../../../scope.js';
 import { transform_inspect_rune } from '../../utils.js';
+import { should_proxy } from '../utils.js';
 
 /**
  * @param {CallExpression} node
  * @param {Context} context
  */
 export function CallExpression(node, context) {
+	const parent = context.path.at(-1);
 	switch (get_rune(node, context.state.scope)) {
 		case '$host':
 			return b.id('$$props.$$host');
@@ -33,6 +35,18 @@ export function CallExpression(node, context) {
 		case '$inspect':
 		case '$inspect().with':
 			return transform_inspect_rune(node, context);
+		case '$state':
+			if (
+				parent?.type === 'ReturnStatement' ||
+				(parent?.type === 'ArrowFunctionExpression' && parent.body === node)
+			) {
+				if (node.arguments[0]) {
+					return b.call(
+						'$.return_proxy',
+						/** @type {Expression} */ (context.visit(node.arguments[0] ?? b.void0))
+					);
+				}
+			}
 	}
 
 	if (
diff --git a/packages/svelte/src/compiler/phases/3-transform/server/visitors/CallExpression.js b/packages/svelte/src/compiler/phases/3-transform/server/visitors/CallExpression.js
index 5bcbdee9fbfe..d5097578bda0 100644
--- a/packages/svelte/src/compiler/phases/3-transform/server/visitors/CallExpression.js
+++ b/packages/svelte/src/compiler/phases/3-transform/server/visitors/CallExpression.js
@@ -1,4 +1,4 @@
-/** @import { CallExpression, Expression } from 'estree' */
+/** @import { ArrowFunctionExpression, CallExpression, Expression } from 'estree' */
 /** @import { Context } from '../types.js' */
 import { is_ignored } from '../../../../state.js';
 import * as b from '#compiler/builders';
@@ -37,5 +37,17 @@ export function CallExpression(node, context) {
 		return transform_inspect_rune(node, context);
 	}
 
+	if (
+		rune === '$state' &&
+		(context.path.at(-1)?.type === 'ReturnStatement' ||
+			(context.path.at(-1)?.type === 'ArrowFunctionExpression' &&
+				/** @type {ArrowFunctionExpression} */ (context.path.at(-1)).body === node))
+	) {
+		if (node.arguments[0]) {
+			return context.visit(node.arguments[0]);
+		}
+		return b.void0;
+	}
+
 	context.next();
 }
diff --git a/packages/svelte/src/internal/client/index.js b/packages/svelte/src/internal/client/index.js
index 14d6e29f5bb4..eb5321c9409e 100644
--- a/packages/svelte/src/internal/client/index.js
+++ b/packages/svelte/src/internal/client/index.js
@@ -141,7 +141,7 @@ export {
 } from './runtime.js';
 export { validate_binding, validate_each_keys } from './validate.js';
 export { raf } from './timing.js';
-export { proxy } from './proxy.js';
+export { proxy, return_proxy } from './proxy.js';
 export { create_custom_element } from './dom/elements/custom-element.js';
 export {
 	child,
diff --git a/packages/svelte/src/internal/client/proxy.js b/packages/svelte/src/internal/client/proxy.js
index fd5706eaf270..9499e7f9ddb9 100644
--- a/packages/svelte/src/internal/client/proxy.js
+++ b/packages/svelte/src/internal/client/proxy.js
@@ -12,9 +12,25 @@ import { state as source, set } from './reactivity/sources.js';
 import { STATE_SYMBOL } from '#client/constants';
 import { UNINITIALIZED } from '../../constants.js';
 import * as e from './errors.js';
+import * as w from './warnings.js';
 import { get_stack } from './dev/tracing.js';
 import { tracing_mode_flag } from '../flags/index.js';
 
+/**
+ * @param {unknown} value
+ * @returns {boolean}
+ */
+function should_proxy(value) {
+	if (typeof value !== 'object' || value === null || STATE_SYMBOL in value) {
+		return false;
+	}
+	const prototype = get_prototype_of(value);
+	if (prototype !== object_prototype && prototype !== array_prototype) {
+		return false;
+	}
+	return true;
+}
+
 /**
  * @template T
  * @param {T} value
@@ -22,13 +38,7 @@ import { tracing_mode_flag } from '../flags/index.js';
  */
 export function proxy(value) {
 	// if non-proxyable, or is already a proxy, return `value`
-	if (typeof value !== 'object' || value === null || STATE_SYMBOL in value) {
-		return value;
-	}
-
-	const prototype = get_prototype_of(value);
-
-	if (prototype !== object_prototype && prototype !== array_prototype) {
+	if (!should_proxy(value)) {
 		return value;
 	}
 
@@ -282,6 +292,21 @@ export function proxy(value) {
 	});
 }
 
+/**
+ * @template T
+ * @param {T} value
+ * @returns {T | void}
+ */
+export function return_proxy(value) {
+	if (should_proxy(value)) {
+		return proxy(value);
+	} else if (DEV && !(typeof value === 'object' && value !== null && STATE_SYMBOL in value)) {
+		// if the argument passed was already a proxy, we don't warn
+		w.state_return_not_proxyable();
+	}
+	return value;
+}
+
 /**
  * @param {Source<number>} signal
  * @param {1 | -1} [d]
diff --git a/packages/svelte/src/internal/client/warnings.js b/packages/svelte/src/internal/client/warnings.js
index c84b487e280d..acb9f82c0cb6 100644
--- a/packages/svelte/src/internal/client/warnings.js
+++ b/packages/svelte/src/internal/client/warnings.js
@@ -170,6 +170,17 @@ export function state_proxy_equality_mismatch(operator) {
 	}
 }
 
+/**
+ * The argument passed to a `$state` call in a return statement must be a plain object or array. Otherwise, the `$state` call will have no effect
+ */
+export function state_return_not_proxyable() {
+	if (DEV) {
+		console.warn(`%c[svelte] state_return_not_proxyable\n%cThe argument passed to a \`$state\` call in a return statement must be a plain object or array. Otherwise, the \`$state\` call will have no effect\nhttps://svelte.dev/e/state_return_not_proxyable`, bold, normal);
+	} else {
+		console.warn(`https://svelte.dev/e/state_return_not_proxyable`);
+	}
+}
+
 /**
  * The `slide` transition does not work correctly for elements with `display: %value%`
  * @param {string} value
diff --git a/packages/svelte/tests/snapshot/samples/state-in-return/_expected/client/index.svelte.js b/packages/svelte/tests/snapshot/samples/state-in-return/_expected/client/index.svelte.js
new file mode 100644
index 000000000000..de55e87b536a
--- /dev/null
+++ b/packages/svelte/tests/snapshot/samples/state-in-return/_expected/client/index.svelte.js
@@ -0,0 +1,14 @@
+/* index.svelte.js generated by Svelte VERSION */
+import * as $ from 'svelte/internal/client';
+
+export default function proxy(object) {
+	return $.return_proxy(object);
+}
+
+export function createCounter() {
+	let count = $.state(0);
+
+	$.update(count);
+}
+
+export const proxy_in_arrow = (object) => $.return_proxy(object);
\ No newline at end of file
diff --git a/packages/svelte/tests/snapshot/samples/state-in-return/_expected/server/index.svelte.js b/packages/svelte/tests/snapshot/samples/state-in-return/_expected/server/index.svelte.js
new file mode 100644
index 000000000000..de52cde883be
--- /dev/null
+++ b/packages/svelte/tests/snapshot/samples/state-in-return/_expected/server/index.svelte.js
@@ -0,0 +1,14 @@
+/* index.svelte.js generated by Svelte VERSION */
+import * as $ from 'svelte/internal/server';
+
+export default function proxy(object) {
+	return object;
+}
+
+export function createCounter() {
+	let count = 0;
+
+	count++;
+}
+
+export const proxy_in_arrow = (object) => object;
\ No newline at end of file
diff --git a/packages/svelte/tests/snapshot/samples/state-in-return/index.svelte.js b/packages/svelte/tests/snapshot/samples/state-in-return/index.svelte.js
new file mode 100644
index 000000000000..66d143f4096e
--- /dev/null
+++ b/packages/svelte/tests/snapshot/samples/state-in-return/index.svelte.js
@@ -0,0 +1,8 @@
+export default function proxy(object) {
+	return $state(object);
+}
+export function createCounter() {
+	let count = $state(0);
+	count++;
+}
+export const proxy_in_arrow = (object) => $state(object);