diff --git a/src/utils/proxy.ts b/src/utils/proxy.ts
index dc8ebe1e406..769a1c6fc91 100644
--- a/src/utils/proxy.ts
+++ b/src/utils/proxy.ts
@@ -121,10 +121,14 @@ const formatEdgeFunctionError = (errorBuffer, acceptsHtml) => {
   })
 }
 
-function isInternal(url?: string): boolean {
+function isInternalFunctions(url?: string): boolean {
   return url?.startsWith('/.netlify/') ?? false
 }
 
+function isInternal(url?: string): boolean {
+  return url?.startsWith('/') ?? false
+}
+
 function isFunction(functionsPort: boolean | number | undefined, url: string) {
   return functionsPort && url.match(DEFAULT_FUNCTION_URL_EXPRESSION)
 }
@@ -201,7 +205,7 @@ const handleAddonUrl = function ({ addonUrl, req, res }) {
 
 // @ts-expect-error TS(7006) FIXME: Parameter 'match' implicitly has an 'any' type.
 const isRedirect = function (match) {
-  return match.status && match.status >= 300 && match.status <= 400
+  return match.status && match.status >= 300 && match.status < 400
 }
 
 // @ts-expect-error TS(7006) FIXME: Parameter 'publicFolder' implicitly has an 'any' t... Remove this comment to see the full error message
@@ -415,8 +419,8 @@ const serveRedirect = async function ({
     const ct = req.headers['content-type'] ? contentType.parse(req).type : ''
     if (
       req.method === 'POST' &&
-      !isInternal(req.url) &&
-      !isInternal(destURL) &&
+      !isInternalFunctions(req.url) &&
+      !isInternalFunctions(destURL) &&
       (ct.endsWith('/x-www-form-urlencoded') || ct === 'multipart/form-data')
     ) {
       return proxy.web(req, res, { target: options.functionsServer })
@@ -431,9 +435,13 @@ const serveRedirect = async function ({
       match.force ||
       (!staticFile && ((!options.framework && destStaticFile) || isInternal(destURL) || matchingFunction))
     ) {
+      // 3xx redirects parsed above, here are 2xx meaning just override the url of proxying page and use the status
+      // which comes from that url
       req.url = destStaticFile ? destStaticFile + dest.search : destURL
       const { status } = match
-      statusValue = status
+      if (match.force || status !== 200) {
+        statusValue = status
+      }
       console.log(`${NETLIFYDEVLOG} Rewrote URL to`, req.url)
     }
 
@@ -450,9 +458,11 @@ const serveRedirect = async function ({
 
       return proxy.web(req, res, { headers: functionHeaders, target: options.functionsServer })
     }
+
     if (isImageRequest(req)) {
       return imageProxy(req, res)
     }
+
     const addonUrl = getAddonUrl(options.addonsUrls, req)
     if (addonUrl) {
       return handleAddonUrl({ req, res, addonUrl })
@@ -518,6 +528,8 @@ const initializeProxy = async function ({
   })
 
   proxy.on('error', (err, req, res, proxyUrl) => {
+    console.error('Got error from proxy', err)
+
     // @ts-expect-error TS(2339) FIXME: Property 'proxyOptions' does not exist on type 'In... Remove this comment to see the full error message
     const options = req.proxyOptions
 
@@ -632,7 +644,7 @@ const initializeProxy = async function ({
       }
     }
 
-    if (options.staticFile && isRedirect({ status: proxyRes.statusCode }) && proxyRes.headers.location) {
+    if (isRedirect({ status: proxyRes.statusCode }) && proxyRes.headers.location) {
       req.url = proxyRes.headers.location
       return serveRedirect({
         // We don't want to match functions at this point because any redirects
@@ -875,7 +887,7 @@ const onRequest = async (
     hasFormSubmissionHandler &&
     functionsServer &&
     req.method === 'POST' &&
-    !isInternal(req.url) &&
+    !isInternalFunctions(req.url) &&
     (ct.endsWith('/x-www-form-urlencoded') || ct === 'multipart/form-data')
   ) {
     return proxy.web(req, res, { target: functionsServer })
diff --git a/tests/integration/__fixtures__/hugo-site/netlify.toml b/tests/integration/__fixtures__/hugo-site/netlify.toml
index f1f9e015e25..9ca9fe4ca22 100644
--- a/tests/integration/__fixtures__/hugo-site/netlify.toml
+++ b/tests/integration/__fixtures__/hugo-site/netlify.toml
@@ -2,6 +2,6 @@
 command = "npm run serve"
 framework = "#custom"
 functions = "functions/"
-port = 7000
+port = 7001
 publish = "out"
 targetPort = 1313
diff --git a/tests/integration/__fixtures__/next-app/app/page.js b/tests/integration/__fixtures__/next-app/app/page.js
index 9b226e82e9f..c7086da99a7 100644
--- a/tests/integration/__fixtures__/next-app/app/page.js
+++ b/tests/integration/__fixtures__/next-app/app/page.js
@@ -5,6 +5,7 @@ export default function Home() {
   return (
     <main className={styles.main}>
       <div className={styles.description}>
+        <p>Local site Dev Server</p>
         <p>
           Get started by editing&nbsp;
           <code className={styles.code}>app/page.js</code>
diff --git a/tests/integration/__fixtures__/next-app/app/test/exists/page.js b/tests/integration/__fixtures__/next-app/app/test/exists/page.js
new file mode 100644
index 00000000000..970c50c8531
--- /dev/null
+++ b/tests/integration/__fixtures__/next-app/app/test/exists/page.js
@@ -0,0 +1,3 @@
+export default function ExistsPage() {
+  return <p>Exists page</p>
+}
diff --git a/tests/integration/__fixtures__/next-app/netlify.toml b/tests/integration/__fixtures__/next-app/netlify.toml
index fc09d4fe48e..b86a2296ab4 100644
--- a/tests/integration/__fixtures__/next-app/netlify.toml
+++ b/tests/integration/__fixtures__/next-app/netlify.toml
@@ -4,6 +4,16 @@ publish = "public"
 [dev]
 targetPort = 6123
 
+[[redirects]]
+from = "/local/*"
+to = "/:splat"
+status = 200
+
+[[redirects]]
+from = "/test/*"
+to = "https://www.netlify.app/:splat"
+status = 200
+
 [[redirects]]
 from = "*"
 to = "https://www.netlify.app/:splat"
diff --git a/tests/integration/__fixtures__/site-with-redirect/.gitignore b/tests/integration/__fixtures__/site-with-redirect/.gitignore
new file mode 100644
index 00000000000..1bfc52be811
--- /dev/null
+++ b/tests/integration/__fixtures__/site-with-redirect/.gitignore
@@ -0,0 +1 @@
+.netlify
diff --git a/tests/integration/__fixtures__/site-with-redirect/index.js b/tests/integration/__fixtures__/site-with-redirect/index.js
new file mode 100644
index 00000000000..21893249f27
--- /dev/null
+++ b/tests/integration/__fixtures__/site-with-redirect/index.js
@@ -0,0 +1,29 @@
+const http = require('http')
+
+const server = http.createServer((req, res) => {
+  const pathname = new URL(req.url, 'http://localhost').pathname
+
+  console.log(`Got ${pathname}`)
+
+  if (pathname === '/') {
+    res.write('Root page')
+    res.end()
+  } else if (pathname === '/test/exists') {
+    res.writeHead(302, undefined, { location: '/test/exists/' })
+    res.end()
+  } else if (pathname === '/test/exists/') {
+    res.write('Test exists page')
+    res.end()
+  } else if (pathname === '/test/not-allowed') {
+    res.writeHead(405)
+    res.write('This not allowed')
+    res.end()
+  } else {
+    res.writeHead(404).write('Page is not found')
+    res.end()
+  }
+})
+
+server.listen(6124, () => {
+  console.log('Server is Running')
+})
diff --git a/tests/integration/__fixtures__/site-with-redirect/netlify.toml b/tests/integration/__fixtures__/site-with-redirect/netlify.toml
new file mode 100644
index 00000000000..6aa346838ac
--- /dev/null
+++ b/tests/integration/__fixtures__/site-with-redirect/netlify.toml
@@ -0,0 +1,14 @@
+[dev]
+targetPort = 6124
+command = "npm run dev"
+
+[[redirects]]
+from = "/local/*"
+to = "/:splat"
+status = 200
+
+[[redirects]]
+from = "/local-force/*"
+to = "/:splat"
+status = 402
+force = true
diff --git a/tests/integration/__fixtures__/site-with-redirect/package.json b/tests/integration/__fixtures__/site-with-redirect/package.json
new file mode 100644
index 00000000000..18a8df12ac1
--- /dev/null
+++ b/tests/integration/__fixtures__/site-with-redirect/package.json
@@ -0,0 +1,9 @@
+{
+  "name": "site-with-redirect",
+  "version": "1.0.0",
+  "private": true,
+  "scripts": {
+    "dev": "node index.js"
+  },
+  "dependencies": {}
+}
diff --git a/tests/integration/commands/dev/redirects.test.ts b/tests/integration/commands/dev/redirects.test.ts
index 09fe60a23ce..fa7a719ede0 100644
--- a/tests/integration/commands/dev/redirects.test.ts
+++ b/tests/integration/commands/dev/redirects.test.ts
@@ -8,7 +8,7 @@ import { withSiteBuilder } from '../../utils/site-builder.js'
 describe('redirects', () => {
   setupFixtureTests('dev-server-with-functions', { devServer: true }, () => {
     test<FixtureTestContext>('should send original query params to functions', async ({ devServer }) => {
-      const response = await fetch(`http://localhost:${devServer.port}/with-params?param2=world&other=1`, {})
+      const response = await fetch(`http://localhost:${devServer.port}/with-params?param2=world&other=1`)
 
       expect(response.status).toBe(200)
 
@@ -21,7 +21,7 @@ describe('redirects', () => {
     test<FixtureTestContext>('should send original query params to functions when using duplicate parameters', async ({
       devServer,
     }) => {
-      const response = await fetch(`http://localhost:${devServer.port}/api/echo?param=hello&param=world`, {})
+      const response = await fetch(`http://localhost:${devServer.port}/api/echo?param=hello&param=world`)
 
       expect(response.status).toBe(200)
 
@@ -33,23 +33,85 @@ describe('redirects', () => {
 
   setupFixtureTests('next-app', { devServer: { env: { NETLIFY_DEV_SERVER_CHECK_SSG_ENDPOINTS: 1 } } }, () => {
     test<FixtureTestContext>('should prefer local files instead of redirect when not forced', async ({ devServer }) => {
-      const response = await fetch(`http://localhost:${devServer.port}/test.txt`, {})
+      const response = await fetch(`http://localhost:${devServer.port}/test.txt`)
 
       expect(response.status).toBe(200)
 
       const result = await response.text()
       expect(result.trim()).toEqual('hello world')
+      expect(devServer?.output).not.toContain('Proxying to https://www.netlify.app')
     })
 
     test<FixtureTestContext>('should check for the dynamic page existence before doing redirect', async ({
       devServer,
     }) => {
-      const response = await fetch(`http://localhost:${devServer.port}/`, {})
+      const response = await fetch(`http://localhost:${devServer.port}/`)
 
       expect(response.status).toBe(200)
 
       const result = await response.text()
+      expect(result.toLowerCase()).toContain('local site dev server')
       expect(result.toLowerCase()).not.toContain('netlify')
+      expect(devServer?.output).not.toContain('Proxying to https://www.netlify.app')
+    })
+
+    test<FixtureTestContext>('nested route redirect check for the page existence', async ({ devServer }) => {
+      let response = await fetch(`http://localhost:${devServer.port}/test/exists`)
+      expect(response.status).toBe(200)
+
+      let result = await response.text()
+      expect(result.toLowerCase()).toContain('exists page')
+      expect(devServer?.output).not.toContain('Proxying to https://www.netlify.app/exists')
+
+      response = await fetch(`http://localhost:${devServer.port}/test/about`)
+      expect(response.status).toBe(200)
+
+      result = await response.text()
+      expect(result.toLowerCase()).toContain('netlify')
+
+      expect(devServer?.output).toContain('Proxying to https://www.netlify.app/about')
+    })
+
+    test<FixtureTestContext>('should do local redirect', async ({ devServer }) => {
+      const response = await fetch(`http://localhost:${devServer.port}/local/test/exists`)
+
+      expect(response.status).toBe(200)
+
+      const result = await response.text()
+      expect(response.headers.get('location')).toBeNull()
+      expect(response.status).toBe(200)
+      expect(result.toLowerCase()).toContain('exists page')
+      expect(result.toLowerCase()).not.toContain('netlify')
+      expect(devServer?.output).not.toContain('Proxying to https://www.netlify.app/test')
+    })
+  })
+
+  setupFixtureTests('site-with-redirect', { devServer: true }, () => {
+    test<FixtureTestContext>('should do local redirect', async ({ devServer }) => {
+      const response = await fetch(`http://localhost:${devServer.port}/local/test/exists`)
+
+      expect(response.status).toBe(200)
+
+      const result = await response.text()
+      expect(response.url).toEqual(`http://localhost:${devServer.port}/local/test/exists`)
+      expect(response.status).toBe(200)
+      expect(result.toLowerCase()).toContain('exists page')
+      expect(result.toLowerCase()).not.toContain('netlify')
+      expect(devServer?.output).not.toContain('Proxying to https://www.netlify.app')
+    })
+
+    test<FixtureTestContext>('should pass proper status code of the redirected page', async ({ devServer }) => {
+      let response = await fetch(`http://localhost:${devServer.port}/local/test/not-allowed`)
+
+      expect(response.status).toBe(405)
+      const result = await response.text()
+      expect(result.toLowerCase()).toContain('this not allowed')
+
+      response = await fetch(`http://localhost:${devServer.port}/local/test/not-found`)
+      expect(response.status).toBe(404)
+
+      response = await fetch(`http://localhost:${devServer.port}/local-force/test/exists`)
+      expect(response.status).toBe(402)
     })
   })