diff --git a/.changeset/hungry-steaks-relax.md b/.changeset/hungry-steaks-relax.md
new file mode 100644
index 00000000..5d507178
--- /dev/null
+++ b/.changeset/hungry-steaks-relax.md
@@ -0,0 +1,21 @@
+---
+"astro-icon": patch
+---
+
+**BREAKING**: Requires subdirectory prefixes for local icons.
+
+This fixes a regression introduced in v1 and matches the previous v0 `name` behavior.
+
+As an example, the `src/icons/logos/astro.svg` file could previously be referenced by the name `astro`. It should correctly be referenced as `logos/astro`.
+
+**Before**
+
+```jsx
+<Icon name="astro" />
+```
+
+**After**
+
+```jsx
+<Icon name="logos/astro" />
+```
diff --git a/demo/src/pages/index.astro b/demo/src/pages/index.astro
index caaafeee..1076e708 100644
--- a/demo/src/pages/index.astro
+++ b/demo/src/pages/index.astro
@@ -19,10 +19,10 @@ const icon = "adjustment";
     <Icon size={24} name="adjustment" />
     <Icon size={24} name={icon} />
     <Icon size={24} name="annotation" />
-    <Icon size={24} name="deno" />
-    <Icon name="deno" />
-    <Icon width={75} name="alpine" />
-    <Icon name="alpine-multi-color" />
+    <Icon size={24} name="logos/deno" />
+    <Icon name="logos/deno" />
+    <Icon width={75} name="logos/alpine" />
+    <Icon name="logos/alpine-multi-color" />
   </article>
 
   <article>
diff --git a/packages/core/src/loaders/loadLocalCollection.ts b/packages/core/src/loaders/loadLocalCollection.ts
index 557cda29..5dd7a268 100644
--- a/packages/core/src/loaders/loadLocalCollection.ts
+++ b/packages/core/src/loaders/loadLocalCollection.ts
@@ -16,6 +16,8 @@ export default async function createLocalCollection(
   const local = await importDirectory(dir, {
     prefix: "local",
     keepTitles: true,
+    includeSubDirs: true,
+    keyword: (file) => file.subdir + file.file,
   });
 
   // Validate, clean up, fix palette and optimize