diff --git a/src/bin.ts b/src/bin.ts
index 900383d71..95c7f9320 100644
--- a/src/bin.ts
+++ b/src/bin.ts
@@ -299,7 +299,6 @@ export function main(
       ['ts-node']: {
         ...service.options,
         optionBasePaths: undefined,
-        experimentalEsmLoader: undefined,
         compilerOptions: undefined,
         project: service.configFilePath ?? service.options.project,
       },
diff --git a/src/configuration.ts b/src/configuration.ts
index 6bc8e1113..a970b49c4 100644
--- a/src/configuration.ts
+++ b/src/configuration.ts
@@ -251,7 +251,10 @@ export function readConfig(
  */
 function filterRecognizedTsConfigTsNodeOptions(
   jsonObject: any
-): { recognized: TsConfigOptions; unrecognized: any } {
+): {
+  recognized: TsConfigOptions;
+  unrecognized: any;
+} {
   if (jsonObject == null) return { recognized: {}, unrecognized: {} };
   const {
     compiler,
diff --git a/src/esm.ts b/src/esm.ts
index 53e14fd71..ab1638eb1 100644
--- a/src/esm.ts
+++ b/src/esm.ts
@@ -1,4 +1,4 @@
-import { register, getExtensions, RegisterOptions } from './index';
+import { getExtensions, register, RegisterOptions, Service } from './index';
 import {
   parse as parseUrl,
   format as formatUrl,
@@ -15,17 +15,21 @@ const {
 
 // Note: On Windows, URLs look like this: file:///D:/dev/@TypeStrong/ts-node-examples/foo.ts
 
+/** @internal */
 export function registerAndCreateEsmHooks(opts?: RegisterOptions) {
   // Automatically performs registration just like `-r ts-node/register`
-  const tsNodeInstance = register({
-    ...opts,
-    experimentalEsmLoader: true,
-  });
+  const tsNodeInstance = register(opts);
+
+  return createEsmHooks(tsNodeInstance);
+}
+
+export function createEsmHooks(tsNodeService: Service) {
+  tsNodeService.enableExperimentalEsmLoaderInterop();
 
   // Custom implementation that considers additional file extensions and automatically adds file extensions
   const nodeResolveImplementation = createResolve({
-    ...getExtensions(tsNodeInstance.config),
-    preferTsExts: tsNodeInstance.options.preferTsExts,
+    ...getExtensions(tsNodeService.config),
+    preferTsExts: tsNodeService.options.preferTsExts,
   });
 
   return { resolve, getFormat, transformSource };
@@ -98,17 +102,17 @@ export function registerAndCreateEsmHooks(opts?: RegisterOptions) {
     // If file has .ts, .tsx, or .jsx extension, then ask node how it would treat this file if it were .js
     const ext = extname(nativePath);
     let nodeSays: { format: Format };
-    if (ext !== '.js' && !tsNodeInstance.ignored(nativePath)) {
+    if (ext !== '.js' && !tsNodeService.ignored(nativePath)) {
       nodeSays = await defer(formatUrl(pathToFileURL(nativePath + '.js')));
     } else {
       nodeSays = await defer();
     }
     // For files compiled by ts-node that node believes are either CJS or ESM, check if we should override that classification
     if (
-      !tsNodeInstance.ignored(nativePath) &&
+      !tsNodeService.ignored(nativePath) &&
       (nodeSays.format === 'commonjs' || nodeSays.format === 'module')
     ) {
-      const { moduleType } = tsNodeInstance.moduleTypeClassifier.classifyModule(
+      const { moduleType } = tsNodeService.moduleTypeClassifier.classifyModule(
         normalizeSlashes(nativePath)
       );
       if (moduleType === 'cjs') {
@@ -139,11 +143,11 @@ export function registerAndCreateEsmHooks(opts?: RegisterOptions) {
     }
     const nativePath = fileURLToPath(url);
 
-    if (tsNodeInstance.ignored(nativePath)) {
+    if (tsNodeService.ignored(nativePath)) {
       return defer();
     }
 
-    const emittedJs = tsNodeInstance.compile(sourceAsString, nativePath);
+    const emittedJs = tsNodeService.compile(sourceAsString, nativePath);
 
     return { source: emittedJs };
   }
diff --git a/src/index.ts b/src/index.ts
index dee5fa1b4..5f9c5c9aa 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -294,12 +294,6 @@ export interface CreateOptions {
   transformers?:
     | _ts.CustomTransformers
     | ((p: _ts.Program) => _ts.CustomTransformers);
-  /**
-   * True if require() hooks should interop with experimental ESM loader.
-   * Enabled explicitly via a flag since it is a breaking change.
-   * @internal
-   */
-  experimentalEsmLoader?: boolean;
   /**
    * Allows the usage of top level await in REPL.
    *
@@ -369,7 +363,6 @@ export interface TsConfigOptions
     | 'dir'
     | 'cwd'
     | 'projectSearchDir'
-    | 'experimentalEsmLoader'
     | 'optionBasePaths'
   > {}
 
@@ -405,7 +398,6 @@ export const DEFAULTS: RegisterOptions = {
   typeCheck: yn(env.TS_NODE_TYPE_CHECK),
   compilerHost: yn(env.TS_NODE_COMPILER_HOST),
   logError: yn(env.TS_NODE_LOG_ERROR),
-  experimentalEsmLoader: false,
   experimentalReplAwait: yn(env.TS_NODE_EXPERIMENTAL_REPL_AWAIT) ?? undefined,
 };
 
@@ -452,6 +444,8 @@ export interface Service {
   addDiagnosticFilter(filter: DiagnosticFilter): void;
   /** @internal */
   installSourceMapSupport(): void;
+  /** @internal */
+  enableExperimentalEsmLoaderInterop(): void;
 }
 
 /**
@@ -688,7 +682,7 @@ export function create(rawOptions: CreateOptions = {}): Service {
         // If it's a file URL, convert to local path
         // Note: fileURLToPath does not exist on early node v10
         // I could not find a way to handle non-URLs except to swallow an error
-        if (options.experimentalEsmLoader && path.startsWith('file://')) {
+        if (experimentalEsmLoader && path.startsWith('file://')) {
           try {
             path = fileURLToPath(path);
           } catch (e) {
@@ -1260,6 +1254,15 @@ export function create(rawOptions: CreateOptions = {}): Service {
     });
   }
 
+  /**
+   * True if require() hooks should interop with experimental ESM loader.
+   * Enabled explicitly via a flag since it is a breaking change.
+   */
+  let experimentalEsmLoader = false;
+  function enableExperimentalEsmLoaderInterop() {
+    experimentalEsmLoader = true;
+  }
+
   return {
     [TS_NODE_SERVICE_BRAND]: true,
     ts,
@@ -1274,6 +1277,7 @@ export function create(rawOptions: CreateOptions = {}): Service {
     shouldReplAwait,
     addDiagnosticFilter,
     installSourceMapSupport,
+    enableExperimentalEsmLoaderInterop,
   };
 }
 
@@ -1468,3 +1472,8 @@ function getTokenAtPosition(
     return current;
   }
 }
+
+import type { createEsmHooks as createEsmHooksFn } from './esm';
+export const createEsmHooks: typeof createEsmHooksFn = (
+  tsNodeService: Service
+) => require('./esm').createEsmHooks(tsNodeService);
diff --git a/src/test/esm-loader.spec.ts b/src/test/esm-loader.spec.ts
new file mode 100644
index 000000000..e117e1ef8
--- /dev/null
+++ b/src/test/esm-loader.spec.ts
@@ -0,0 +1,39 @@
+// ESM loader hook tests
+// TODO: at the time of writing, other ESM loader hook tests have not been moved into this file.
+// Should consolidate them here.
+
+import { context } from './testlib';
+import semver = require('semver');
+import {
+  contextTsNodeUnderTest,
+  EXPERIMENTAL_MODULES_FLAG,
+  TEST_DIR,
+} from './helpers';
+import { createExec } from './exec-helpers';
+import { join } from 'path';
+import * as expect from 'expect';
+
+const test = context(contextTsNodeUnderTest);
+
+const exec = createExec({
+  cwd: TEST_DIR,
+});
+
+test.suite('createEsmHooks', (test) => {
+  if (semver.gte(process.version, '12.16.0')) {
+    test('should create proper hooks with provided instance', async () => {
+      const { err } = await exec(
+        `node ${EXPERIMENTAL_MODULES_FLAG} --loader ./loader.mjs index.ts`,
+        {
+          cwd: join(TEST_DIR, './esm-custom-loader'),
+        }
+      );
+
+      if (err === null) {
+        throw new Error('Command was expected to fail, but it succeeded.');
+      }
+
+      expect(err.message).toMatch(/TS6133:\s+'unusedVar'/);
+    });
+  }
+});
diff --git a/tests/esm-custom-loader/index.ts b/tests/esm-custom-loader/index.ts
new file mode 100755
index 000000000..89efb1cf9
--- /dev/null
+++ b/tests/esm-custom-loader/index.ts
@@ -0,0 +1,4 @@
+export function abc() {
+  let unusedVar: string;
+  return true;
+}
diff --git a/tests/esm-custom-loader/loader.mjs b/tests/esm-custom-loader/loader.mjs
new file mode 100755
index 000000000..3b0ee683c
--- /dev/null
+++ b/tests/esm-custom-loader/loader.mjs
@@ -0,0 +1,16 @@
+import { fileURLToPath } from 'url';
+import { createRequire } from 'module';
+const require = createRequire(fileURLToPath(import.meta.url));
+
+/** @type {import('../../dist')} **/
+const { createEsmHooks, register } = require('ts-node');
+
+const tsNodeInstance = register({
+  compilerOptions: {
+    noUnusedLocals: true,
+  },
+});
+
+export const { resolve, getFormat, transformSource } = createEsmHooks(
+  tsNodeInstance
+);
diff --git a/tests/esm-custom-loader/package.json b/tests/esm-custom-loader/package.json
new file mode 100755
index 000000000..3dbc1ca59
--- /dev/null
+++ b/tests/esm-custom-loader/package.json
@@ -0,0 +1,3 @@
+{
+  "type": "module"
+}
diff --git a/tests/esm-custom-loader/tsconfig.json b/tests/esm-custom-loader/tsconfig.json
new file mode 100755
index 000000000..ad01eee33
--- /dev/null
+++ b/tests/esm-custom-loader/tsconfig.json
@@ -0,0 +1,7 @@
+{
+  "compilerOptions": {
+    "module": "ESNext",
+    "moduleResolution": "node",
+    "noUnusedLocals": false
+  }
+}