diff --git a/esphome/components/esp32/__init__.py b/esphome/components/esp32/__init__.py
index 9093167fda..5ab7f07319 100644
--- a/esphome/components/esp32/__init__.py
+++ b/esphome/components/esp32/__init__.py
@@ -88,7 +88,6 @@ IS_TARGET_PLATFORM = True
 CONF_ASSERTION_LEVEL = "assertion_level"
 CONF_COMPILER_OPTIMIZATION = "compiler_optimization"
 CONF_ENABLE_IDF_EXPERIMENTAL_FEATURES = "enable_idf_experimental_features"
-CONF_INCLUDE_ARDUINO_LIBRARIES = "include_arduino_libraries"
 CONF_INCLUDE_BUILTIN_IDF_COMPONENTS = "include_builtin_idf_components"
 CONF_ENABLE_LWIP_ASSERT = "enable_lwip_assert"
 CONF_ENABLE_OTA_ROLLBACK = "enable_ota_rollback"
@@ -1062,9 +1061,6 @@ FRAMEWORK_SCHEMA = cv.Schema(
                 cv.Optional(
                     CONF_INCLUDE_BUILTIN_IDF_COMPONENTS, default=[]
                 ): cv.ensure_list(cv.string_strict),
-                cv.Optional(CONF_INCLUDE_ARDUINO_LIBRARIES, default=[]): cv.ensure_list(
-                    cv.one_of(*ARDUINO_DISABLED_LIBRARIES)
-                ),
                 cv.Optional(CONF_DISABLE_DEBUG_STUBS, default=True): cv.boolean,
                 cv.Optional(CONF_DISABLE_OCD_AWARE, default=True): cv.boolean,
                 cv.Optional(
@@ -1406,8 +1402,8 @@ async def to_code(config):
         # Enable Arduino selective compilation to disable unused Arduino libraries
         # ESPHome uses ESP-IDF APIs directly; we only need the Arduino core
         # (HardwareSerial, Print, Stream, GPIO functions which are always compiled)
-        # cg.add_library() auto-enables needed libraries; users can also specify
-        # include_arduino_libraries in the advanced config
+        # cg.add_library() auto-enables needed libraries; users can also add
+        # libraries via esphome: libraries: config which calls cg.add_library()
         add_idf_sdkconfig_option("CONFIG_ARDUINO_SELECTIVE_COMPILATION", True)
         enabled_libs = CORE.data[KEY_ESP32].get(KEY_ARDUINO_LIBRARIES, set())
         for lib in ARDUINO_DISABLED_LIBRARIES:
@@ -1508,10 +1504,6 @@ async def to_code(config):
     for component_name in advanced.get(CONF_INCLUDE_BUILTIN_IDF_COMPONENTS, []):
         include_builtin_idf_component(component_name)
 
-    # Re-enable any Arduino libraries the user explicitly requested
-    for lib_name in advanced.get(CONF_INCLUDE_ARDUINO_LIBRARIES, []):
-        _enable_arduino_library(lib_name)
-
     # DHCP server: only disable if explicitly set to false
     # WiFi component handles its own optimization when AP mode is not used
     # When using Arduino with Ethernet, DHCP server functions must be available
diff --git a/tests/unit_tests/test_core.py b/tests/unit_tests/test_core.py
index 1fc8dab358..174b3fec85 100644
--- a/tests/unit_tests/test_core.py
+++ b/tests/unit_tests/test_core.py
@@ -780,3 +780,78 @@ class TestEsphomeCore:
         target.config = {const.CONF_ESPHOME: {"name": "test"}, "logger": {}}
 
         assert target.has_networking is False
+
+    def test_add_library__esp32_arduino_enables_disabled_library(self, target):
+        """Test add_library auto-enables Arduino libraries on ESP32 Arduino builds."""
+        target.data[const.KEY_CORE] = {
+            const.KEY_TARGET_PLATFORM: "esp32",
+            const.KEY_TARGET_FRAMEWORK: "arduino",
+        }
+
+        library = core.Library("WiFi", None)
+
+        with patch("esphome.components.esp32._enable_arduino_library") as mock_enable:
+            target.add_library(library)
+            mock_enable.assert_called_once_with("WiFi")
+
+        assert "WiFi" in target.platformio_libraries
+
+    def test_add_library__esp32_arduino_ignores_non_arduino_library(self, target):
+        """Test add_library doesn't enable libraries not in ARDUINO_DISABLED_LIBRARIES."""
+        target.data[const.KEY_CORE] = {
+            const.KEY_TARGET_PLATFORM: "esp32",
+            const.KEY_TARGET_FRAMEWORK: "arduino",
+        }
+
+        library = core.Library("SomeOtherLib", "1.0.0")
+
+        with patch("esphome.components.esp32._enable_arduino_library") as mock_enable:
+            target.add_library(library)
+            mock_enable.assert_not_called()
+
+        assert "SomeOtherLib" in target.platformio_libraries
+
+    def test_add_library__esp32_idf_does_not_enable_arduino_library(self, target):
+        """Test add_library doesn't auto-enable Arduino libraries on ESP32 IDF builds."""
+        target.data[const.KEY_CORE] = {
+            const.KEY_TARGET_PLATFORM: "esp32",
+            const.KEY_TARGET_FRAMEWORK: "esp-idf",
+        }
+
+        library = core.Library("WiFi", None)
+
+        with patch("esphome.components.esp32._enable_arduino_library") as mock_enable:
+            target.add_library(library)
+            mock_enable.assert_not_called()
+
+        assert "WiFi" in target.platformio_libraries
+
+    def test_add_library__esp8266_does_not_enable_arduino_library(self, target):
+        """Test add_library doesn't auto-enable Arduino libraries on ESP8266."""
+        target.data[const.KEY_CORE] = {
+            const.KEY_TARGET_PLATFORM: "esp8266",
+            const.KEY_TARGET_FRAMEWORK: "arduino",
+        }
+
+        library = core.Library("WiFi", None)
+
+        with patch("esphome.components.esp32._enable_arduino_library") as mock_enable:
+            target.add_library(library)
+            mock_enable.assert_not_called()
+
+        assert "WiFi" in target.platformio_libraries
+
+    def test_add_library__extracts_short_name_from_path(self, target):
+        """Test add_library extracts short name from library paths like owner/lib."""
+        target.data[const.KEY_CORE] = {
+            const.KEY_TARGET_PLATFORM: "esp32",
+            const.KEY_TARGET_FRAMEWORK: "arduino",
+        }
+
+        library = core.Library("arduino/Wire", None)
+
+        with patch("esphome.components.esp32._enable_arduino_library") as mock_enable:
+            target.add_library(library)
+            mock_enable.assert_called_once_with("Wire")
+
+        assert "Wire" in target.platformio_libraries