diff --git a/.changeset/chilled-books-burn.md b/.changeset/chilled-books-burn.md
new file mode 100644
index 000000000..de1c370f2
--- /dev/null
+++ b/.changeset/chilled-books-burn.md
@@ -0,0 +1,5 @@
+---
+'@web/test-runner-browserstack': minor
+---
+
+Allow to disable the local proxy for CI environments
diff --git a/docs/docs/test-runner/browser-launchers/browserstack.md b/docs/docs/test-runner/browser-launchers/browserstack.md
index 52cc49ce1..442078f77 100644
--- a/docs/docs/test-runner/browser-launchers/browserstack.md
+++ b/docs/docs/test-runner/browser-launchers/browserstack.md
@@ -70,6 +70,16 @@ export default {
         os_version: '7',
       },
     }),
+
+    browserstackLauncher({
+      capabilities: {
+        ...sharedCapabilities,
+        browserName: 'Chrome',
+        os: 'Windows',
+        os_version: '10',
+      },
+      local: false, // disables the local proxy
+    }),
   ],
 };
 ```
@@ -81,3 +91,5 @@ The Browserstack launcher takes two properties, `capabilities` and `localOptions
 `capabilities` are the selenium capabilities used to configure the browser to launch in Browserstack. You can generate most of these on the Saucelabs. It must contain a `browserstack.user` and `browserstack.key` property to authenticate with Browserstack, as well as `name`, `build` and `project` to identify the test run.
 
 `localOptions` are options to configure the [browserstack-local](https://www.npmjs.com/package/browserstack-local) proxy. For most use cases, you don't need to configure this property.
+
+`local` is a property which, when set to `false`, disables the local proxy entirely. This can be particularly helpful in CI environment where you may not need to proxy local resources through Browserstack.
diff --git a/packages/test-runner-browserstack/src/browserstackLauncher.ts b/packages/test-runner-browserstack/src/browserstackLauncher.ts
index bf86abff8..6a19f5db1 100644
--- a/packages/test-runner-browserstack/src/browserstackLauncher.ts
+++ b/packages/test-runner-browserstack/src/browserstackLauncher.ts
@@ -11,15 +11,14 @@ import {
 export interface BrowserstackLauncherArgs {
   capabilities: Record<string, unknown>;
   localOptions?: Partial<browserstack.Options>;
+  local?: boolean
 }
 
 const REQUIRED_CAPABILITIES = ['name', 'browserstack.user', 'browserstack.key', 'project', 'build'];
-const localIp = internalIp.v4.sync() as string;
-if (!localIp) {
-  throw new Error('Can not determine the local IP.');
-}
 
 export class BrowserstackLauncher extends WebdriverLauncher {
+  private localIp?: string;
+
   constructor(
     private capabilities: Record<string, unknown>,
     public name: string,
@@ -34,19 +33,35 @@ export class BrowserstackLauncher extends WebdriverLauncher {
       user: capabilities['browserstack.user'] as string,
       key: capabilities['browserstack.key'] as string,
     });
+
+    if (this.capabilities['browserstack.local']) {
+      this.localIp = internalIp.v4.sync() as string;
+      if (!this.localIp) {
+        throw new Error('Can not determine the local IP.');
+      }
+    }
   }
 
   async initialize(config: TestRunnerCoreConfig) {
-    await registerBrowserstackLocal(
-      this,
-      this.capabilities['browserstack.key'] as string,
-      this.localOptions,
-    );
+    if (this.capabilities['browserstack.local']) {
+      await registerBrowserstackLocal(
+        this,
+        this.capabilities['browserstack.key'] as string,
+        this.localOptions,
+      );
+    }
     await super.initialize(config);
   }
 
   startSession(sessionId: string, url: string) {
-    return super.startSession(sessionId, url.replace(/(localhost|127\.0\.0\.1)/, localIp));
+    if (url.includes('localhost') || url.includes('127.0.0.1')) {
+      if (!this.localIp) {
+        throw new Error('If you want to use a local domain, make sure to enable the browserstack.local capability.');
+      }
+      url = url.replace(/(localhost|127\.0\.0\.1)/, this.localIp)
+    }
+
+    return super.startSession(sessionId, url);
   }
 
   async startDebugSession() {
@@ -55,7 +70,9 @@ export class BrowserstackLauncher extends WebdriverLauncher {
 
   stop() {
     const stopPromise = super.stop();
-    unregisterBrowserstackLocal(this);
+    if (this.capabilities['browserstack.local']) {
+      unregisterBrowserstackLocal(this);
+    }
     return stopPromise;
   }
 }
@@ -79,7 +96,7 @@ export function browserstackLauncher(args: BrowserstackLauncherArgs): BrowserLau
 
   const capabilities = { ...args.capabilities };
   capabilities['timeout'] = 300;
-  capabilities['browserstack.local'] = true;
+  capabilities['browserstack.local'] = args.local ?? true;
   capabilities['browserstack.localIdentifier'] = localId;
 
   // we need to allow popups since we open new windows