diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0635486090..e4ffae839f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -17,6 +17,7 @@ Our versioning strategy is as follows:
 
 ### 🐛 Bug Fixes
 
+* `[sitecore-jss-nextjs]` Fix Link component locale handling to support both `languageEmbedding="always"` and `languageEmbedding="asNeeded"` Sitecore configurations. The component now auto-detects if the href already contains a locale prefix, preventing both double-prefixing and missing locale issues.
 * `[sitecore-jss-nextjs]` Preserve default locale in external absolute urls ([#2142](https://github.com/Sitecore/jss/pull/2142))
 * `[React]` Custom properties are not applied to empty field in editing metadata mode ([#2141](https://github.com/Sitecore/jss/pull/2141))
 * `[sitecore-jss-nextjs]` Add regex variable substitution for absolute and external URL redirects. ([#2159](https://github.com/Sitecore/jss/pull/2159))
diff --git a/packages/sitecore-jss-nextjs/src/components/Link.test.tsx b/packages/sitecore-jss-nextjs/src/components/Link.test.tsx
index ab390e7ef5..ffd0e4d331 100644
--- a/packages/sitecore-jss-nextjs/src/components/Link.test.tsx
+++ b/packages/sitecore-jss-nextjs/src/components/Link.test.tsx
@@ -7,7 +7,7 @@ import { RouterContext } from 'next/dist/shared/lib/router-context.shared-runtim
 import { Link } from './Link';
 import { spy } from 'sinon';
 
-const Router = (): NextRouter => ({
+const Router = (locales?: string[]): NextRouter => ({
   pathname: '/',
   route: '/',
   query: {},
@@ -17,6 +17,7 @@ const Router = (): NextRouter => ({
   isFallback: false,
   isPreview: false,
   isReady: false,
+  locales: locales,
   events: { emit: spy(), off: spy(), on: spy() },
   push: spy(() => Promise.resolve(true)),
   replace: spy(() => Promise.resolve(true)),
@@ -27,8 +28,8 @@ const Router = (): NextRouter => ({
 });
 
 // Should provide RouterContext in case if we render Link from next/link
-const Page = ({ children }: { children: ReactNode }) => (
-  <RouterContext.Provider value={Router()}>{children}</RouterContext.Provider>
+const Page = ({ children, locales }: { children: ReactNode; locales?: string[] }) => (
+  <RouterContext.Provider value={Router(locales)}>{children}</RouterContext.Provider>
 );
 
 describe('<Link />', () => {
@@ -616,4 +617,88 @@ describe('<Link />', () => {
       expect(rendered.container.innerHTML).to.equal('');
     });
   });
+
+  describe('locale handling', () => {
+    it('should not double-prefix locale when href already contains locale', () => {
+      const field = {
+        value: {
+          href: '/sv/about',
+          text: 'About',
+        },
+      };
+
+      const rendered = render(
+        <Page locales={['en', 'sv', 'de']}>
+          <Link field={field} />
+        </Page>
+      );
+
+      const link = rendered.container.querySelector('a');
+
+      // Href should remain unchanged (no double prefix)
+      expect(link?.getAttribute('href')).to.equal('/sv/about');
+      expect(link?.getAttribute('data-nextjs-link')).to.equal('true');
+    });
+
+    it('should allow Next.js to add locale when href does not contain locale', () => {
+      const field = {
+        value: {
+          href: '/about',
+          text: 'About',
+        },
+      };
+
+      const rendered = render(
+        <Page locales={['en', 'sv', 'de']}>
+          <Link field={field} />
+        </Page>
+      );
+
+      const link = rendered.container.querySelector('a');
+
+      // Link should render with NextLink (locale handling enabled)
+      expect(link?.getAttribute('data-nextjs-link')).to.equal('true');
+    });
+
+    it('should handle locale-only href paths', () => {
+      const field = {
+        value: {
+          href: '/sv',
+          text: 'Swedish Home',
+        },
+      };
+
+      const rendered = render(
+        <Page locales={['en', 'sv', 'de']}>
+          <Link field={field} />
+        </Page>
+      );
+
+      const link = rendered.container.querySelector('a');
+
+      // Href should remain unchanged
+      expect(link?.getAttribute('href')).to.equal('/sv');
+      expect(link?.getAttribute('data-nextjs-link')).to.equal('true');
+    });
+
+    it('should work when no locales are configured', () => {
+      const field = {
+        value: {
+          href: '/about',
+          text: 'About',
+        },
+      };
+
+      const rendered = render(
+        <Page>
+          <Link field={field} />
+        </Page>
+      );
+
+      const link = rendered.container.querySelector('a');
+
+      expect(link?.getAttribute('href')).to.equal('/about');
+      expect(link?.getAttribute('data-nextjs-link')).to.equal('true');
+    });
+  });
 });
diff --git a/packages/sitecore-jss-nextjs/src/components/Link.tsx b/packages/sitecore-jss-nextjs/src/components/Link.tsx
index 5383b716a7..3112f416e6 100644
--- a/packages/sitecore-jss-nextjs/src/components/Link.tsx
+++ b/packages/sitecore-jss-nextjs/src/components/Link.tsx
@@ -1,6 +1,7 @@
 import React, { forwardRef, JSX } from 'react';
 import NextLink from 'next/link';
 import { LinkProps as NextLinkProps } from 'next/link';
+import { useRouter } from 'next/router';
 import {
   Link as ReactLink,
   LinkFieldValue,
@@ -37,6 +38,9 @@ export const Link = forwardRef<HTMLAnchorElement, LinkProps>(
       ...htmlLinkProps
     } = props;
 
+    // Get configured locales from Next.js router for locale detection
+    const router = useRouter();
+
     if (
       !field ||
       (!(field as LinkFieldValue).editable &&
@@ -65,11 +69,19 @@ export const Link = forwardRef<HTMLAnchorElement, LinkProps>(
       // determine if a link is a route or not. File extensions are not routes and should not be pre-fetched.
       if (isMatching && !isFileUrl) {
         delete htmlLinkProps.emptyFieldEditingComponent;
+
+        // Check if href already contains a locale prefix to avoid double-prefixing.
+        // This supports both languageEmbedding="always" (locale in URL from Sitecore) and
+        // languageEmbedding="asNeeded" (locale may not be in URL, let Next.js handle it).
+        const hrefHasLocale = router.locales?.some(
+          (locale) => href.startsWith(`/${locale}/`) || href === `/${locale}`
+        );
+
         return (
           <NextLink
             href={{ pathname: href, query: querystring, hash: anchor }}
             key="link"
-            locale={false}
+            locale={hrefHasLocale ? false : undefined}
             title={value.title}
             target={value.target}
             className={value.class}