diff --git a/esphome/core/component.cpp b/esphome/core/component.cpp
index 40cda17ca3..ca8d31e922 100644
--- a/esphome/core/component.cpp
+++ b/esphome/core/component.cpp
@@ -12,6 +12,9 @@
 #ifdef USE_RUNTIME_STATS
 #include "esphome/components/runtime_stats/runtime_stats.h"
 #endif
+#ifdef USE_ESP8266
+#include <pgmspace.h>
+#endif
 
 namespace esphome {
 
@@ -185,7 +188,19 @@ void Component::call() {
 const char *Component::get_component_source() const {
   if (this->component_source_ == nullptr)
     return "<unknown>";
+#ifdef USE_ESP8266
+  // On ESP8266, component_source_ is stored in PROGMEM
+  // We need a static buffer to hold the string when read from flash
+  // Since this is only used for logging, a single shared buffer is fine
+  static char buffer[64];  // Component names are typically short
+
+  // Copy from PROGMEM to buffer
+  strncpy_P(buffer, this->component_source_, sizeof(buffer) - 1);
+  buffer[sizeof(buffer) - 1] = '\0';  // Ensure null termination
+  return buffer;
+#else
   return this->component_source_;
+#endif
 }
 bool Component::should_warn_of_blocking(uint32_t blocking_time) {
   if (blocking_time > this->warn_if_blocking_over_) {
diff --git a/esphome/cpp_helpers.py b/esphome/cpp_helpers.py
index b61b215bdc..5164923b2d 100644
--- a/esphome/cpp_helpers.py
+++ b/esphome/cpp_helpers.py
@@ -9,7 +9,7 @@ from esphome.const import (
 )
 from esphome.core import CORE, ID, coroutine
 from esphome.coroutine import FakeAwaitable
-from esphome.cpp_generator import add, get_variable
+from esphome.cpp_generator import RawExpression, add, get_variable
 from esphome.cpp_types import App
 from esphome.types import ConfigFragmentType, ConfigType
 from esphome.util import Registry, RegistryEntry
@@ -76,7 +76,11 @@ async def register_component(var, config):
             "Error while finding name of component, please report this", exc_info=e
         )
     if name is not None:
-        add(var.set_component_source(name))
+        # On ESP8266, store component source strings in PROGMEM to save RAM
+        if CORE.is_esp8266:
+            add(var.set_component_source(RawExpression(f'PSTR("{name}")')))
+        else:
+            add(var.set_component_source(name))
 
     add(App.register_component(var))
     return var