diff --git a/README.md b/README.md
index 09f0f00..c9efc83 100644
--- a/README.md
+++ b/README.md
@@ -25,11 +25,9 @@ get a bundled version of these files to eval in the browser.
 ## This solution
 
 This is an async function that will compile and bundle your MDX files and their
-dependencies. It uses [esbuild](https://esbuild.github.io/), so it's VERY fast
-and supports TypeScript files (for the dependencies of your MDX files). It also
-uses [xdm](https://github.com/wooorm/xdm) which is a more modern and powerful
-MDX compiler with fewer bugs and more features (and no extra runtime
-requirements).
+dependencies. It uses [MDX v2](https://mdxjs.com/blog/v2/) and
+[esbuild](https://esbuild.github.io/), so it's VERY fast and supports TypeScript
+files (for the dependencies of your MDX files).
 
 Your source files could be local, in a remote github repo, in a CMS, or wherever
 else and it doesn't matter. All `mdx-bundler` cares about is that you pass it
@@ -154,17 +152,6 @@ Why not?
 
 </details>
 
-<details>
-  <summary>
-    <strong>
-      "Why does this use XDM instead of @mdx-js?"
-    </strong>
-  </summary>
-
-It has more features, fewer bugs, and no runtime!
-
-</details>
-
 <details>
   <summary>
     <strong>
@@ -321,18 +308,18 @@ file source code. You could get these from the filesystem or from a remote
 database. If your MDX doesn't reference other files (or only imports things from
 `node_modules`), then you can omit this entirely.
 
-#### xdmOptions
+#### mdxOptions
 
-This allows you to modify the built-in xdm configuration (passed to the xdm
-esbuild plugin). This can be helpful for specifying your own
+This allows you to modify the built-in MDX configuration (passed to
+`@mdx-js/esbuild`). This can be helpful for specifying your own
 remarkPlugins/rehypePlugins.
 
-The function is passed the default xdmOptions and the frontmatter.
+The function is passed the default mdxOptions and the frontmatter.
 
 ```ts
 bundleMDX({
   source: mdxSource,
-  xdmOptions(options, frontmatter) {
+  mdxOptions(options, frontmatter) {
     // this is the recommended way to add custom remark/rehype plugins:
     // The syntax might look weird, but it protects you in case we add/remove
     // plugins in the future.
@@ -505,7 +492,7 @@ the directory. If one option is set the other must be aswell.
 _The Javascript bundle is not written to this directory and is still returned as
 a string from `bundleMDX`._
 
-This feature is best used with tweaks to `xdmOptions` and `esbuildOptions`. In
+This feature is best used with tweaks to `mdxOptions` and `esbuildOptions`. In
 the example below and `.png` files are written to the disk and then served from
 `/file/`.
 
@@ -521,7 +508,7 @@ const {code} = await bundleMDX({
   cwd: '/path/to/site/content',
   bundleDirectory: '/path/to/site/public/file,
   bundlePath: '/file/',
-  xdmOptions: options => {
+  mdxOptions: options => {
     options.remarkPlugins = [remarkMdxImages]
 
     return options
@@ -553,7 +540,7 @@ const {code} = await bundleMDX({
 `bundleMDX` has a single type parameter which is the type of your frontmatter.
 It defaults to `{[key: string]: any}` and must be an object. This is then used
 to type the returned `frontmatter` and the frontmatter passed to
-`esbuildOptions` and `xdmOptions`.
+`esbuildOptions` and `mdxOptions`.
 
 ```ts
 const {frontmatter} = bundleMDX<{title: string}>({source})
@@ -564,7 +551,7 @@ frontmatter.title // has type string
 ### Component Substitution
 
 MDX Bundler passes on
-[XDM's ability to substitute components](https://github.com/wooorm/xdm#mdx-content)
+[MDX's ability to substitute components](https://mdxjs.com/docs/using-mdx/#components)
 through the `components` prop on the component returned by `getMDXComponent`.
 
 Here's an example that removes _p_ tags from around images.
@@ -653,7 +640,7 @@ import {remarkMdxImages} from 'remark-mdx-images'
 const {code} = await bundleMDX({
   source: mdxSource,
   cwd: '/users/you/site/_content/pages',
-  xdmOptions: options => {
+  mdxOptions: options => {
     options.remarkPlugins = [...(options.remarkPlugins ?? []), remarkMdxImages]
 
     return options
@@ -684,7 +671,7 @@ folder to be used in image sources.
 const {code} = await bundleMDX({
   source: mdxSource,
   cwd: '/users/you/site/_content/pages',
-  xdmOptions: options => {
+  mdxOptions: options => {
     options.remarkPlugins = [...(options.remarkPlugins ?? []), remarkMdxImages]
 
     return options
diff --git a/package.json b/package.json
index 028ebbd..669d546 100644
--- a/package.json
+++ b/package.json
@@ -9,8 +9,7 @@
     "mdx",
     "bundler",
     "mdx-bundler",
-    "esbuild",
-    "xdm"
+    "esbuild"
   ],
   "author": "Kent C. Dodds <me@kentcdodds.com> (https://kentcdodds.com)",
   "license": "MIT",
@@ -43,11 +42,11 @@
     "@babel/runtime": "^7.16.3",
     "@esbuild-plugins/node-resolve": "^0.1.4",
     "@fal-works/esbuild-plugin-global-externals": "^2.1.2",
+    "@mdx-js/esbuild": "^2.0.0",
     "gray-matter": "^4.0.3",
     "remark-frontmatter": "^4.0.1",
     "remark-mdx-frontmatter": "^1.1.1",
-    "uuid": "^8.3.2",
-    "xdm": "^3.3.0"
+    "uuid": "^8.3.2"
   },
   "peerDependencies": {
     "esbuild": "0.11.x || 0.12.x || 0.13.x || 0.14.x"
diff --git a/src/__tests__/index.js b/src/__tests__/index.js
index 6f78d09..9d4e0ed 100644
--- a/src/__tests__/index.js
+++ b/src/__tests__/index.js
@@ -217,7 +217,7 @@ import Demo from './demo'
 import * as React from 'react'
 import {left} from './left'
 
-const Demo: React.FC = () => { 
+const Demo: React.FC = () => {
 return <p>{left("TypeScript")}</p>
 }
 
@@ -273,7 +273,7 @@ import {Demo} from './demo'
     './demo.ts': `
 import React from 'react'
 
-export const Demo: React.FC = () => { 
+export const Demo: React.FC = () => {
   return <p>Sample</p>
 }
     `.trim(),
@@ -313,7 +313,7 @@ import {Sample} from './sample-component'
   const {code} = await bundleMDX({
     source: mdxSource,
     cwd: path.join(process.cwd(), 'other'),
-    xdmOptions: options => {
+    mdxOptions: options => {
       options.remarkPlugins = [remarkMdxImages]
 
       return options
@@ -354,7 +354,7 @@ test('should output assets', async () => {
     cwd: path.join(process.cwd(), 'other'),
     bundleDirectory: path.join(process.cwd(), 'output'),
     bundlePath: '/img/',
-    xdmOptions: options => {
+    mdxOptions: options => {
       options.remarkPlugins = [remarkMdxImages]
 
       return options
@@ -379,7 +379,7 @@ test('should output assets', async () => {
     await bundleMDX({
       source: mdxSource,
       cwd: path.join(process.cwd(), 'other'),
-      xdmOptions: options => {
+      mdxOptions: options => {
         options.remarkPlugins = [remarkMdxImages]
 
         return options
diff --git a/src/index.js b/src/index.js
index 0896559..79aac27 100644
--- a/src/index.js
+++ b/src/index.js
@@ -20,7 +20,7 @@ async function bundleMDX({
   file,
   source,
   files = {},
-  xdmOptions = options => options,
+  mdxOptions = options => options,
   esbuildOptions = options => options,
   globals = {},
   cwd = path.join(process.cwd(), `__mdx_bundler_fake_dir__`),
@@ -36,10 +36,10 @@ async function bundleMDX({
   }
   /* c8 ignore stop */
 
-  // xdm is a native ESM, and we're running in a CJS context. This is the
+  // @mdx-js/esbuild is a native ESM, and we're running in a CJS context. This is the
   // only way to import ESM within CJS
-  const [{default: xdmESBuild}, {default: remarkFrontmatter}] =
-    await Promise.all([import('xdm/esbuild.js'), import('remark-frontmatter')])
+  const [{default: mdxESBuild}, {default: remarkFrontmatter}] =
+    await Promise.all([import('@mdx-js/esbuild'), import('remark-frontmatter')])
 
   let /** @type string */ code,
     /** @type string */ entryPath,
@@ -184,8 +184,8 @@ async function bundleMDX({
           resolveOptions: {basedir: cwd},
         }),
         inMemoryPlugin,
-        xdmESBuild(
-          xdmOptions(
+        mdxESBuild(
+          mdxOptions(
             {
               remarkPlugins: [
                 remarkFrontmatter,
diff --git a/src/types.d.ts b/src/types.d.ts
index 011236d..3709394 100644
--- a/src/types.d.ts
+++ b/src/types.d.ts
@@ -6,7 +6,7 @@
 
 import type {Plugin, BuildOptions, Loader} from 'esbuild'
 import type {ModuleInfo} from '@fal-works/esbuild-plugin-global-externals'
-import type {CoreProcessorOptions} from 'xdm/lib/compile'
+import type {ProcessorOptions} from '@mdx-js/esbuild/lib'
 import type {GrayMatterOption, Input, GrayMatterFile} from 'gray-matter'
 
 type ESBuildOptions = BuildOptions
@@ -57,18 +57,18 @@ type BundleMDXOptions<Frontmatter> = {
    */
   files?: Record<string, string>
   /**
-   * This allows you to modify the built-in xdm configuration (passed to xdm.compile).
+   * This allows you to modify the built-in MDX configuration (passed to @mdx-js/mdx compile).
    * This can be helpful for specifying your own remarkPlugins/rehypePlugins.
    *
    * @param vfileCompatible the path and contents of the mdx file being compiled
    * @param options the default options which you are expected to modify and return
-   * @returns the options to be passed to xdm.compile
+   * @returns the options to be passed to @mdx-js/mdx compile
    *
    * @example
    * ```
    * bundleMDX({
    *   source: mdxString,
-   *   xdmOptions(options) {
+   *   mdxOptions(options) {
    *     // this is the recommended way to add custom remark/rehype plugins:
    *     // The syntax might look weird, but it protects you in case we add/remove
    *     // plugins in the future.
@@ -80,10 +80,10 @@ type BundleMDXOptions<Frontmatter> = {
    * })
    * ```
    */
-  xdmOptions?: (
-    options: CoreProcessorOptions,
+  mdxOptions?: (
+    options: ProcessorOptions,
     frontmatter: Frontmatter,
-  ) => CoreProcessorOptions
+  ) => ProcessorOptions
   /**
    * This allows you to modify the built-in esbuild configuration. This can be
    * especially helpful for specifying the compilation target.