diff --git a/packages/@headlessui-vue/CHANGELOG.md b/packages/@headlessui-vue/CHANGELOG.md
index 65b9c049a..d31bb3cba 100644
--- a/packages/@headlessui-vue/CHANGELOG.md
+++ b/packages/@headlessui-vue/CHANGELOG.md
@@ -16,6 +16,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Fix crash when using `multiple` mode without `value` prop (uncontrolled) for `Listbox` and `Combobox` components ([#2058](https://github.com/tailwindlabs/headlessui/pull/2058))
 - Allow passing in your own `id` prop ([#2060](https://github.com/tailwindlabs/headlessui/pull/2060))
 - Add `null` as a valid type for Listbox and Combobox in Vue ([#2064](https://github.com/tailwindlabs/headlessui/pull/2064), [#2067](https://github.com/tailwindlabs/headlessui/pull/2067))
+- Improve SSR for Tabs in Vue ([#2068](https://github.com/tailwindlabs/headlessui/pull/2068))
 
 ## [1.7.4] - 2022-11-03
 
diff --git a/packages/@headlessui-vue/src/components/tabs/tabs.test.ts b/packages/@headlessui-vue/src/components/tabs/tabs.test.ts
index f0a3aa690..af8636c14 100644
--- a/packages/@headlessui-vue/src/components/tabs/tabs.test.ts
+++ b/packages/@headlessui-vue/src/components/tabs/tabs.test.ts
@@ -1,4 +1,5 @@
-import { nextTick, ref } from 'vue'
+import { createSSRApp, nextTick, ref } from 'vue'
+import { renderToString } from 'vue/server-renderer'
 import { createRenderTemplate, render } from '../../test-utils/vue-testing-library'
 import { TabGroup, TabList, Tab, TabPanels, TabPanel } from './tabs'
 import { suppressConsoleLogs } from '../../test-utils/suppress-console-logs'
@@ -554,6 +555,60 @@ describe('Rendering', () => {
       assertTabs({ active: 2 })
     })
   })
+
+  describe('SSR', () => {
+    it('should be possible to server side render the first Tab and Panel', async () => {
+      let app = createSSRApp({
+        components: { TabGroup, TabList, Tab, TabPanels, TabPanel },
+        template: html`
+          <TabGroup>
+            <TabList>
+              <Tab>Tab 1</Tab>
+              <Tab>Tab 2</Tab>
+              <Tab>Tab 3</Tab>
+            </TabList>
+
+            <TabPanels>
+              <TabPanel>Content 1</TabPanel>
+              <TabPanel>Content 2</TabPanel>
+              <TabPanel>Content 3</TabPanel>
+            </TabPanels>
+          </TabGroup>
+        `,
+      })
+
+      let contents = await renderToString(app)
+      expect(contents).toContain(`Content 1`)
+      expect(contents).not.toContain(`Content 2`)
+      expect(contents).not.toContain(`Content 3`)
+    })
+
+    it('should be possible to server side render the defaultIndex Tab and Panel', async () => {
+      let app = createSSRApp({
+        components: { TabGroup, TabList, Tab, TabPanels, TabPanel },
+        template: html`
+          <TabGroup :defaultIndex="1">
+            <TabList>
+              <Tab>Tab 1</Tab>
+              <Tab>Tab 2</Tab>
+              <Tab>Tab 3</Tab>
+            </TabList>
+
+            <TabPanels>
+              <TabPanel>Content 1</TabPanel>
+              <TabPanel>Content 2</TabPanel>
+              <TabPanel>Content 3</TabPanel>
+            </TabPanels>
+          </TabGroup>
+        `,
+      })
+
+      let contents = await renderToString(app)
+      expect(contents).not.toContain(`Content 1`)
+      expect(contents).toContain(`Content 2`)
+      expect(contents).not.toContain(`Content 3`)
+    })
+  })
 })
 
 describe('`selectedIndex`', () => {
diff --git a/packages/@headlessui-vue/src/components/tabs/tabs.ts b/packages/@headlessui-vue/src/components/tabs/tabs.ts
index 4cc35ed10..dd38c2ca0 100644
--- a/packages/@headlessui-vue/src/components/tabs/tabs.ts
+++ b/packages/@headlessui-vue/src/components/tabs/tabs.ts
@@ -58,6 +58,10 @@ function useTabsContext(component: string) {
   return context
 }
 
+let TabsSSRContext = Symbol('TabsSSRContext') as InjectionKey<
+  Ref<{ tabs: string[]; panels: string[] } | null>
+>
+
 // ---
 
 export let TabGroup = defineComponent({
@@ -84,7 +88,7 @@ export let TabGroup = defineComponent({
     )
 
     let api = {
-      selectedIndex,
+      selectedIndex: computed(() => selectedIndex.value ?? props.defaultIndex ?? null),
       orientation: computed(() => (props.vertical ? 'vertical' : 'horizontal')),
       activation: computed(() => (props.manual ? 'manual' : 'auto')),
       tabs,
@@ -116,6 +120,16 @@ export let TabGroup = defineComponent({
 
     provide(TabsContext, api)
 
+    let SSRCounter = ref({ tabs: [], panels: [] })
+    let mounted = ref(false)
+    onMounted(() => {
+      mounted.value = true
+    })
+    provide(
+      TabsSSRContext,
+      computed(() => (mounted.value ? null : SSRCounter.value))
+    )
+
     watchEffect(() => {
       if (api.tabs.value.length <= 0) return
       if (props.selectedIndex === null && selectedIndex.value !== null) return
@@ -231,7 +245,22 @@ export let Tab = defineComponent({
     onMounted(() => api.registerTab(internalTabRef))
     onUnmounted(() => api.unregisterTab(internalTabRef))
 
-    let myIndex = computed(() => api.tabs.value.indexOf(internalTabRef))
+    let SSRContext = inject(TabsSSRContext)!
+    let mySSRIndex = computed(() => {
+      if (SSRContext.value) {
+        let mySSRIndex = SSRContext.value.tabs.indexOf(props.id)
+        if (mySSRIndex === -1) return SSRContext.value.tabs.push(props.id) - 1
+        return mySSRIndex
+      }
+
+      return -1
+    })
+
+    let myIndex = computed(() => {
+      let myIndex = api.tabs.value.indexOf(internalTabRef)
+      if (myIndex === -1) return mySSRIndex.value
+      return myIndex
+    })
     let selected = computed(() => myIndex.value === api.selectedIndex.value)
 
     function activateUsing(cb: () => FocusResult) {
@@ -391,7 +420,22 @@ export let TabPanel = defineComponent({
     onMounted(() => api.registerPanel(internalPanelRef))
     onUnmounted(() => api.unregisterPanel(internalPanelRef))
 
-    let myIndex = computed(() => api.panels.value.indexOf(internalPanelRef))
+    let SSRContext = inject(TabsSSRContext)!
+    let mySSRIndex = computed(() => {
+      if (SSRContext.value) {
+        let mySSRIndex = SSRContext.value.panels.indexOf(props.id)
+        if (mySSRIndex === -1) return SSRContext.value.panels.push(props.id) - 1
+        return mySSRIndex
+      }
+
+      return -1
+    })
+
+    let myIndex = computed(() => {
+      let myIndex = api.panels.value.indexOf(internalPanelRef)
+      if (myIndex === -1) return mySSRIndex.value
+      return myIndex
+    })
     let selected = computed(() => myIndex.value === api.selectedIndex.value)
 
     return () => {