diff --git a/docs/src/data-types/types.md b/docs/src/data-types/types.md
index 771dafb13..2dca9a3d3 100644
--- a/docs/src/data-types/types.md
+++ b/docs/src/data-types/types.md
@@ -37,7 +37,7 @@ struct Event {
 The corresponding GraphQL schema to mirror this `Event` struct would resemble:
 
 ```graphql
-type Event {
+type Event @entity {
     id: ID!
     account: Address!
     block_height: UInt8!
diff --git a/docs/src/database/foreign-keys.md b/docs/src/database/foreign-keys.md
index 7436d9e59..c92c69982 100644
--- a/docs/src/database/foreign-keys.md
+++ b/docs/src/database/foreign-keys.md
@@ -18,12 +18,12 @@ Let's learn how to use each foreign key type by looking at some GraphQL schema e
 ### Implicit foreign keys
 
 ```graphql
-type Book {
+type Book @entity {
     id: ID!
     name: Bytes8!
 }
 
-type Library {
+type Library @entity {
     id: ID!
     book: Book!
 }
@@ -36,12 +36,12 @@ Given the above schema, two entities will be created: a `Book` entity, and a `Li
 ### Explicit foreign keys
 
 ```graphql
-type Book {
+type Book @entity {
     id: ID!
     name: Bytes8! @unique
 }
 
-type Library {
+type Library @entity {
     id: ID!
     book: Book! @join(on:name)
 }
diff --git a/docs/src/graphql/directives.md b/docs/src/graphql/directives.md
index a20bbb5dd..97fd353f4 100644
--- a/docs/src/graphql/directives.md
+++ b/docs/src/graphql/directives.md
@@ -14,12 +14,12 @@ As of this writing, the list of supported Fuel GraphQL schema directives include
 The `@indexed` directive adds a [database index](https://www.postgresql.org/docs/current/indexes-intro.html) to the underlying column for the indicated field of that type. Generally, a database index is a data structure that allows you to quickly locate data without having to search each row in a database table.
 
 ```graphql
-type Book {
+type Book @entity {
     id: ID!
     name: Bytes8! @indexed
 }
 
-type Library {
+type Library @entity {
     id: ID!
     book: Book!
 }
@@ -34,12 +34,12 @@ In this example, a single `BTREE INDEX` constraint will be created on the `book`
 The `@unique` directive adds a `UNIQUE` database constraint to the underlying database column for the indicated field of that type. A constraint specifies a rule for the data in a table and can be used to limit the type of data that can be placed in the table. In the case of a column with a `UNIQUE` constraint, all values in the column must be different.
 
 ```graphql
-type Book {
+type Book @entity {
     id: ID!
     name: Bytes8! @unique
 }
 
-type Library {
+type Library @entity {
     id: ID!
     book: Book!
 }
@@ -54,12 +54,12 @@ A `UNIQUE` constraint will be created on the `book` table's `name` column, ensur
 The `@join` directive is used to relate a field in one type to others by referencing fields in another type. You can think of it as a link between two tables in your database. The field in the referenced type is called a _foreign key_ and it is **required** to be unique.
 
 ```graphql
-type Book {
+type Book @entity {
     id: ID!
     name: Charfield! @unique
 }
 
-type Library {
+type Library @entity {
     id: ID!
     book: Book! @join(on:name)
 }
@@ -72,11 +72,11 @@ A foreign key constraint will be created on `library.book` that references `book
 The `@virtual` directive instructs the indexer's SQL schema builder to _not_ build SQL tables from types that include this directive on any field.
 
 ```graphql
-type Title {
+type Title @entity {
     name: CharField! @virtual
 }
 
-type Book {
+type Book @entity {
     id: ID!
     title: Title!
 }
diff --git a/docs/src/project-components/schema.md b/docs/src/project-components/schema.md
index c6de701ae..ba3f1faa9 100644
--- a/docs/src/project-components/schema.md
+++ b/docs/src/project-components/schema.md
@@ -5,12 +5,12 @@ The GraphQL schema is a required component of the Fuel indexer. When data is ind
 In its most basic form, a Fuel indexer GraphQL schema should have a `schema` definition that contains a defined query root. The rest of the implementation is up to you. Here's an example of a well-formed schema:
 
 ```graphql
-type FirstThing {
+type FirstThing @entity {
     id: ID!
     value: UInt8!
 }
 
-type SecondThing {
+type SecondThing @entity {
     id: ID!
     optional_value: UInt8
     timestamp: Timestamp!
diff --git a/docs/src/queries/index.md b/docs/src/queries/index.md
index c58270baa..e9828c703 100644
--- a/docs/src/queries/index.md
+++ b/docs/src/queries/index.md
@@ -88,24 +88,24 @@ Essentially, it's the same as the basic query example with an added sub-block to
 We'll start with the following example schema:
 
 ```graphql
-type City {
+type City @entity {
     id: ID!
     name: Charfield!
 }
 
-type Library {
+type Library @entity {
     id: ID!
     name: Charfield!
     city: City!
 }
 
-type Book {
+type Book @entity {
     id: ID!
     title: Charfield!
     library: Library!
 }
 
-type Character {
+type Character @entity {
     id: ID!
     name: Charfield!
     book: Book!
diff --git a/examples/fuel-explorer/fuel-explorer/schema/fuel_explorer.schema.graphql b/examples/fuel-explorer/fuel-explorer/schema/fuel_explorer.schema.graphql
index 7be5a2f75..ec65520be 100644
--- a/examples/fuel-explorer/fuel-explorer/schema/fuel_explorer.schema.graphql
+++ b/examples/fuel-explorer/fuel-explorer/schema/fuel_explorer.schema.graphql
@@ -100,53 +100,53 @@ enum OutputLabel {
   Unknown
 }
 
-type Witness {
-  data: Blob! @virtual
+type Witness @entity(virtual: true) {
+  data: Blob!
 }
 
-type InstructionResult {
-  reason: PanicReason! @virtual
+type InstructionResult @entity(virtual: true) {
+  reason: PanicReason!
   instruction: UInt4!
 }
 
-type ProgramState {
-  return_type: ReturnType! @virtual
+type ProgramState @entity(virtual: true) {
+  return_type: ReturnType!
   data: HexString!
 }
 
-type DryRun {
-  tx: HexString! @virtual
+type DryRun @entity(virtual: true) {
+  tx: HexString!
   utxo_validation: Boolean
 }
 
-type TransactionIdFragment {
+type TransactionIdFragment @entity {
   id: ID!
   hash: Bytes32! @indexed
 }
 
-type UtxoId {
+type UtxoId @entity {
   id: ID!
   tx_id: TxId! @indexed
   output_index: UInt4!
 }
 
-type TxPointer {
+type TxPointer @entity {
   id: ID!
   block_height: BlockHeight!
   tx_index: UInt8!
 }
 
-type ContractIdFragment {
+type ContractIdFragment @entity {
   id: ID!
   hash: Bytes32! @indexed
 }
 
-type BlockIdFragment {
+type BlockIdFragment @entity {
   id: ID!
   hash: Bytes32! @indexed
 }
 
-type Genesis {
+type Genesis @entity {
   id: ID!
   chain_config_hash: Bytes32!
   coins_root: Bytes32!
@@ -156,7 +156,7 @@ type Genesis {
   label: ConsensusLabel!
 }
 
-type PoA {
+type PoA @entity {
   id: ID!
   # TODO: Is this important? The fact that signature is different
   # on almost every `PoA` implies that this type might be virtual?
@@ -165,7 +165,7 @@ type PoA {
   label: ConsensusLabel!
 }
 
-type Unknown {
+type Unknown @entity {
   id: ID!
   is_unknown: Boolean!
   label: ConsensusLabel!
@@ -173,7 +173,7 @@ type Unknown {
 
 union Consensus = Genesis | PoA | Unknown
 
-type InputCoin {
+type InputCoin @entity {
   id: ID!
   utxo_id: UtxoId! @indexed
   owner: Address! @indexed
@@ -188,7 +188,7 @@ type InputCoin {
   is_coin: Boolean!
 }
 
-type InputContract {
+type InputContract @entity {
   id: ID!
   utxo_id: UtxoId! @indexed
   balance_root: Bytes32!
@@ -199,7 +199,7 @@ type InputContract {
   is_contract: Boolean!
 }
 
-type InputMessage {
+type InputMessage @entity {
   id: ID!
   sender: Address! @indexed
   recipient: Address! @indexed
@@ -215,14 +215,14 @@ type InputMessage {
 
 union Input = InputCoin | InputContract | InputMessage
 
-type StorageSlot {
+type StorageSlot @entity {
   id: ID!
   key: Bytes32!
   value: Bytes32!
 }
 
-type CallReceipt {
-  contract_id: ContractId! @virtual
+type CallReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   # `recipient` has a different type of different `Reciept` members, so
   # we make it something more generic: `Identity`.
   recipient: Identity!
@@ -238,8 +238,8 @@ type CallReceipt {
   is_call: Boolean!
 }
 
-type ReturnDataReceipt {
-  contract_id: ContractId! @virtual
+type ReturnDataReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   ptr: UInt8!
   len: UInt8!
   digest: Bytes32!
@@ -251,8 +251,8 @@ type ReturnDataReceipt {
   is_return_data: Boolean!
 }
 
-type PanicReceipt {
-  contract_id: ContractId @virtual
+type PanicReceipt @entity(virtual: true) {
+  contract_id: ContractId
   reason: InstructionResult
   pc: UInt8!
   # `is` is a reserved keyword in PostgreSQL.
@@ -261,8 +261,8 @@ type PanicReceipt {
   is_panic: Boolean!
 }
 
-type RevertReceipt {
-  contract_id: ContractId! @virtual
+type RevertReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   ra: UInt8!
   pc: UInt8!
   # `is` is a reserved keyword in PostgreSQL.
@@ -271,8 +271,8 @@ type RevertReceipt {
   is_revert: Boolean!
 }
 
-type LogReceipt {
-  contract_id: ContractId! @virtual
+type LogReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   ra: UInt8!
   rb: UInt8!
   rc: UInt8!
@@ -284,8 +284,8 @@ type LogReceipt {
   is_log: Boolean!
 }
 
-type LogDataReceipt {
-  contract_id: ContractId! @virtual
+type LogDataReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   ra: UInt8!
   rb: UInt8!
   ptr: UInt8!
@@ -299,8 +299,8 @@ type LogDataReceipt {
   is_log_data: Boolean!
 }
 
-type ReturnReceipt {
-  contract_id: ContractId! @virtual
+type ReturnReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   val: UInt8!
   pc: UInt8!
   # `is` is a reserved keyword in PostgreSQL.
@@ -309,8 +309,8 @@ type ReturnReceipt {
   is_return: Boolean!
 }
 
-type TransferReceipt {
-  contract_id: ContractId! @virtual
+type TransferReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   # `recipient` has a different type of different `Reciept` members, so
   # we make it something more generic: `Identity`.
   recipient: Identity!
@@ -323,8 +323,8 @@ type TransferReceipt {
   is_transfer: Boolean!
 }
 
-type TransferOutReceipt {
-  contract_id: ContractId! @virtual
+type TransferOutReceipt @entity(virtual: true) {
+  contract_id: ContractId!
   # `recipient` has a different type of different `Reciept` members, so
   # we make it something more generic: `Identity`.
   recipient: Identity!
@@ -337,15 +337,15 @@ type TransferOutReceipt {
   is_transfer_out: Boolean!
 }
 
-type ScriptResultReceipt {
-  result: ScriptExecutionResult! @virtual
+type ScriptResultReceipt @entity(virtual: true) {
+  result: ScriptExecutionResult!
   gas_used: UInt8!
   label: ReceiptLabel!
   is_script_result: Boolean!
 }
 
-type MessageOutReceipt {
-  sender: Address! @virtual
+type MessageOutReceipt @entity(virtual: true) {
+  sender: Address!
   # `recipient` has a different type of different `Reciept` members, so
   # we make it something more generic: `Identity`.
   recipient: Identity!
@@ -371,7 +371,7 @@ union Receipt =
   | ScriptResultReceipt
   | MessageOutReceipt
 
-type VariableOutput {
+type VariableOutput @entity {
   id: ID!
   # `to` is a reserved keyword in PostgreSQL.
   recipient: Address! @indexed
@@ -381,7 +381,7 @@ type VariableOutput {
   label: OutputLabel!
 }
 
-type ChangeOutput {
+type ChangeOutput @entity {
   id: ID!
   # `to` is a reserved keyword in PostgreSQL.
   recipient: Address! @indexed
@@ -391,7 +391,7 @@ type ChangeOutput {
   label: OutputLabel!
 }
 
-type ContractOutput {
+type ContractOutput @entity {
   id: ID!
   input_index: Int8!
   balance_root: Bytes32!
@@ -400,7 +400,7 @@ type ContractOutput {
   label: OutputLabel!
 }
 
-type CoinOutput {
+type CoinOutput @entity {
   id: ID!
   # `to` is a reserved keyword in PostgreSQL.
   recipient: Address! @indexed
@@ -410,13 +410,13 @@ type CoinOutput {
   label: OutputLabel!
 }
 
-type UnknownOutput {
+type UnknownOutput @entity {
   id: ID!
   is_unknown: Boolean!
   label: OutputLabel!
 }
 
-type ContractCreated {
+type ContractCreated @entity {
   id: ID!
   contract: ContractIdFragment! @indexed
   state_root: Bytes32!
@@ -424,7 +424,7 @@ type ContractCreated {
   label: OutputLabel!
 }
 
-type MessageOutput {
+type MessageOutput @entity {
   id: ID!
   amount: UInt8!
   recipient: Address! @indexed
@@ -441,7 +441,7 @@ union Output =
 
 # `Create` is a reserved word in SQL so we append the suffix `Transaction` to these
 # transaction type names.
-type CreateTransaction {
+type CreateTransaction @entity {
   id: ID!
   gas_price: UInt8!
   gas_limit: UInt8!
@@ -460,7 +460,7 @@ type CreateTransaction {
   label: TransactionLabel!
 }
 
-type ScriptTransaction {
+type ScriptTransaction @entity {
   id: ID!
   gas_price: UInt8!
   gas_limit: UInt8!
@@ -478,7 +478,7 @@ type ScriptTransaction {
   label: TransactionLabel!
 }
 
-type MintTransaction {
+type MintTransaction @entity {
   id: ID!
   tx_pointer: TxPointer!
   outputs: [Output!]
@@ -489,26 +489,23 @@ type MintTransaction {
   label: TransactionLabel!
 }
 
-union Transaction =
-    CreateTransaction
-  | ScriptTransaction
-  | MintTransaction
+union Transaction = CreateTransaction | ScriptTransaction | MintTransaction
 
-type SubmittedStatus {
+type SubmittedStatus @entity {
   id: ID!
   time: UInt8!
   label: TransactionStatusLabel!
   is_submitted: Boolean!
 }
 
-type SqueezedOutStatus {
+type SqueezedOutStatus @entity {
   id: ID!
   reason: Charfield!
   label: TransactionStatusLabel!
   is_squeezed_out: Boolean!
 }
 
-type FailureStatus {
+type FailureStatus @entity {
   id: ID!
   block: BlockIdFragment!
   time: UInt8!
@@ -518,7 +515,7 @@ type FailureStatus {
   is_failure: Boolean!
 }
 
-type SuccessStatus {
+type SuccessStatus @entity {
   id: ID!
   time: UInt8!
   block: BlockIdFragment!
@@ -527,7 +524,7 @@ type SuccessStatus {
   is_success: Boolean!
 }
 
-type UnknownStatus {
+type UnknownStatus @entity {
   id: ID!
   label: TransactionStatusLabel!
   is_unknown: Boolean!
@@ -540,7 +537,7 @@ union TransactionStatus =
   | SuccessStatus
   | UnknownStatus
 
-type Header {
+type Header @entity {
   id: ID!
   block_id: BlockId!
   da_height: UInt8!
@@ -554,7 +551,7 @@ type Header {
   application_hash: Bytes32!
 }
 
-type Block {
+type Block @entity {
   id: ID!
   block_id: BlockId! @indexed
   header: Header! @indexed
@@ -562,7 +559,7 @@ type Block {
   transactions: [TransactionIdFragment!]
 }
 
-type NodeInfo {
+type NodeInfo @entity {
   id: ID!
   utxo_validation: Boolean!
   vm_backtrace: Boolean!
@@ -572,7 +569,7 @@ type NodeInfo {
   node_version: Charfield!
 }
 
-type ConsensusParameters {
+type ConsensusParameters @entity {
   id: ID!
   contract_max_size: UInt8!
   max_inputs: UInt8!
@@ -589,7 +586,7 @@ type ConsensusParameters {
   chain_id: UInt8!
 }
 
-type ChainInfo {
+type ChainInfo @entity {
   id: ID!
   base_chain_height: UInt4!
   name: Charfield!
@@ -598,7 +595,7 @@ type ChainInfo {
   consensus_parameters: ConsensusParameters!
 }
 
-type Coin {
+type Coin @entity {
   id: ID!
   amount: UInt8!
   block_created: UInt4!
@@ -608,7 +605,7 @@ type Coin {
   owner: Address! @indexed
 }
 
-type MessageCoin {
+type MessageCoin @entity {
   id: ID!
   amount: UInt8!
   sender: Address! @indexed
@@ -617,7 +614,7 @@ type MessageCoin {
   da_height: UInt8!
 }
 
-type Contract {
+type Contract @entity {
   id: ID!
   contract_id: ContractId! @indexed
   bytecode: HexString!
diff --git a/examples/hello-world-native/hello-indexer-native/schema/hello_indexer_native.schema.graphql b/examples/hello-world-native/hello-indexer-native/schema/hello_indexer_native.schema.graphql
index 3a7e4990f..40d63135d 100644
--- a/examples/hello-world-native/hello-indexer-native/schema/hello_indexer_native.schema.graphql
+++ b/examples/hello-world-native/hello-indexer-native/schema/hello_indexer_native.schema.graphql
@@ -1,18 +1,18 @@
 # Calling this `Greeter` so as to not clash with `Person` in the contract
-type Greeter {
-    id: ID!
-    name: Charfield!
-    first_seen: UInt8!
-    last_seen: UInt8!
-    visits: Blob!
+type Greeter @entity {
+  id: ID!
+  name: Charfield!
+  first_seen: UInt8!
+  last_seen: UInt8!
+  visits: Blob!
 }
 
 # Calling this `Salutation` so as to not clash with `Greeting` in the contract
-type Salutation {
-    id: ID!
-    message_hash: Bytes32!
-    message: Charfield!
-    greeter: Greeter!
-    first_seen: UInt8!
-    last_seen: UInt8!
+type Salutation @entity {
+  id: ID!
+  message_hash: Bytes32!
+  message: Charfield!
+  greeter: Greeter!
+  first_seen: UInt8!
+  last_seen: UInt8!
 }
diff --git a/examples/hello-world/hello-indexer/schema/hello_indexer.schema.graphql b/examples/hello-world/hello-indexer/schema/hello_indexer.schema.graphql
index 3a7e4990f..40d63135d 100644
--- a/examples/hello-world/hello-indexer/schema/hello_indexer.schema.graphql
+++ b/examples/hello-world/hello-indexer/schema/hello_indexer.schema.graphql
@@ -1,18 +1,18 @@
 # Calling this `Greeter` so as to not clash with `Person` in the contract
-type Greeter {
-    id: ID!
-    name: Charfield!
-    first_seen: UInt8!
-    last_seen: UInt8!
-    visits: Blob!
+type Greeter @entity {
+  id: ID!
+  name: Charfield!
+  first_seen: UInt8!
+  last_seen: UInt8!
+  visits: Blob!
 }
 
 # Calling this `Salutation` so as to not clash with `Greeting` in the contract
-type Salutation {
-    id: ID!
-    message_hash: Bytes32!
-    message: Charfield!
-    greeter: Greeter!
-    first_seen: UInt8!
-    last_seen: UInt8!
+type Salutation @entity {
+  id: ID!
+  message_hash: Bytes32!
+  message: Charfield!
+  greeter: Greeter!
+  first_seen: UInt8!
+  last_seen: UInt8!
 }
diff --git a/packages/fuel-indexer-database/database-types/src/lib.rs b/packages/fuel-indexer-database/database-types/src/lib.rs
index 83c3614f9..4d92221d2 100644
--- a/packages/fuel-indexer-database/database-types/src/lib.rs
+++ b/packages/fuel-indexer-database/database-types/src/lib.rs
@@ -1267,7 +1267,7 @@ mod tests {
     #[test]
     fn test_can_create_well_formed_table_and_table_components_when_passed_typedef() {
         let schema = r#"
-type Person {
+type Person @entity {
     id: ID!
     name: Charfield! @unique
     age: UInt1!
@@ -1345,7 +1345,7 @@ type Person {
     #[test]
     fn test_can_create_well_formed_column_from_field_defintion() {
         let schema = r#"
-type Person {
+type Person @entity {
     id: ID!
     name: Charfield! @unique
     age: UInt1!
@@ -1397,12 +1397,12 @@ type Person {
     #[test]
     fn test_can_create_well_formed_join_table_from_m2m_relationship() {
         let schema = r#"
-type Account {
+type Account @entity {
     id: ID!
     index: UInt8!
 }
 
-type Wallet {
+type Wallet @entity {
     id: ID!
     account: [Account!]!
 }
diff --git a/packages/fuel-indexer-graphql/src/graphql.rs b/packages/fuel-indexer-graphql/src/graphql.rs
index df12007b2..cf1942ebf 100644
--- a/packages/fuel-indexer-graphql/src/graphql.rs
+++ b/packages/fuel-indexer-graphql/src/graphql.rs
@@ -754,13 +754,13 @@ mod tests {
         };
 
         let schema = r#"
-type Block {
+type Block @entity {
     id: ID!
     height: UInt8!
     timestamp: Int8!
 }
 
-type Tx {
+type Tx @entity {
     id: ID!
     timestamp: Int8!
     block: Block
diff --git a/packages/fuel-indexer-lib/src/graphql/mod.rs b/packages/fuel-indexer-lib/src/graphql/mod.rs
index dac247bac..23344cfda 100644
--- a/packages/fuel-indexer-lib/src/graphql/mod.rs
+++ b/packages/fuel-indexer-lib/src/graphql/mod.rs
@@ -44,7 +44,7 @@ impl IndexMetadata {
     pub fn schema_fragment() -> &'static str {
         r#"
 
-type IndexMetadataEntity {
+type IndexMetadataEntity @entity {
     id: ID!
     time: UInt8!
     block_height: UInt8!
diff --git a/packages/fuel-indexer-lib/src/graphql/parser.rs b/packages/fuel-indexer-lib/src/graphql/parser.rs
index 8cfee5748..72a3d728d 100644
--- a/packages/fuel-indexer-lib/src/graphql/parser.rs
+++ b/packages/fuel-indexer-lib/src/graphql/parser.rs
@@ -344,6 +344,17 @@ impl ParsedGraphQLSchema {
                         TypeKind::Object(o) => {
                             let obj_name = t.node.name.to_string();
 
+                            // Only parse `TypeDefinition`s with the `@entity` directive.
+                            let is_entity = t
+                                .node
+                                .directives
+                                .iter()
+                                .any(|d| d.node.name.to_string() == "entity");
+
+                            if !is_entity {
+                                continue;
+                            }
+
                             type_defs.insert(obj_name.clone(), t.node.clone());
                             objects.insert(obj_name.clone(), o.clone());
                             parsed_typedef_names.insert(t.node.name.to_string());
@@ -367,13 +378,14 @@ impl ParsedGraphQLSchema {
                                         .insert(obj_name.clone(), t.node.clone());
                                 }
 
-                                let is_virtual = field
+                                let is_virtual = &t
                                     .node
                                     .directives
                                     .iter()
-                                    .any(|d| d.node.name.to_string() == "virtual");
+                                    .flat_map(|d| d.node.arguments.clone())
+                                    .any(|t| t.0.node == "virtual");
 
-                                if is_virtual {
+                                if *is_virtual {
                                     virtual_type_names.insert(obj_name.clone());
                                 }
 
@@ -829,42 +841,42 @@ enum AccountLabel {
     SECONDARY
 }
 
-type Account {
+type Account @entity {
     id: ID!
     address: Address!
     label: AccountLabel
 }
 
-type User {
+type User @entity {
     id: ID!
     account: Account!
     username: Charfield!
 }
 
-type Loser {
+type Loser @entity {
     id: ID!
     account: Account!
     age: UInt8!
 }
 
-type Metadata {
-    count: UInt8! @virtual
+type Metadata @entity(virtual: true) {
+    count: UInt8!
 }
 
 union Person = User | Loser
 
 
-type Wallet {
+type Wallet @entity {
     id: ID!
     accounts: [Account!]!
 }
 
-type Safe {
+type Safe @entity {
     id: ID!
     account: [Account!]!
 }
 
-type Vault {
+type Vault @entity {
     id: ID!
     label: Charfield!
     user: [User!]!
diff --git a/packages/fuel-indexer-macros/src/decoder.rs b/packages/fuel-indexer-macros/src/decoder.rs
index 80146f67b..047ed9000 100644
--- a/packages/fuel-indexer-macros/src/decoder.rs
+++ b/packages/fuel-indexer-macros/src/decoder.rs
@@ -85,7 +85,7 @@ impl Decoder for ImplementationDecoder {
                 let obj_field_names = parsed
                     .object_field_mappings()
                     .get(&obj_name)
-                    .expect("TypeDefinition not found in parsed GraphQL schema.")
+                    .unwrap_or_else(|| panic!("TypeDefinition '{obj_name}' not found in parsed GraphQL schema."))
                     .iter()
                     .map(|(k, _v)| k.to_owned())
                     .collect::<HashSet<String>>();
@@ -960,13 +960,13 @@ impl From<EnumDecoder> for TokenStream {
 mod tests {
 
     use super::*;
-    use async_graphql_parser::types::{BaseType, ObjectType, Type};
+    use async_graphql_parser::types::{BaseType, ConstDirective, ObjectType, Type};
     use fuel_indexer_lib::graphql::GraphQLSchema;
 
     #[test]
     fn test_can_create_object_decoder_containing_expected_tokens_from_object_typedef() {
         let schema = r#"
-type Person {
+type Person @entity {
     id: ID!
     name: Charfield!
     age: UInt1!
@@ -1005,7 +1005,16 @@ type Person {
                 implements: vec![],
                 fields,
             }),
-            directives: vec![],
+            directives: vec![Positioned {
+                pos: Pos::default(),
+                node: ConstDirective {
+                    name: Positioned {
+                        pos: Pos::default(),
+                        node: Name::new("entity"),
+                    },
+                    arguments: vec![],
+                },
+            }],
         };
 
         let schema = ParsedGraphQLSchema::new(
@@ -1036,12 +1045,12 @@ type Person {
     fn test_can_create_object_decoder_containing_expected_tokens_from_object_typedef_containing_m2m_relationship(
     ) {
         let schema = r#"
-type Account {
+type Account @entity {
     id: ID!
     index: UInt8!
 }
 
-type Wallet {
+type Wallet @entity {
     id: ID!
     account: [Account!]!
 }
@@ -1102,7 +1111,16 @@ type Wallet {
                 implements: vec![],
                 fields,
             }),
-            directives: vec![],
+            directives: vec![Positioned {
+                pos: Pos::default(),
+                node: ConstDirective {
+                    name: Positioned {
+                        pos: Pos::default(),
+                        node: Name::new("entity"),
+                    },
+                    arguments: vec![],
+                },
+            }],
         };
 
         let schema = ParsedGraphQLSchema::new(
diff --git a/packages/fuel-indexer-tests/components/indices/fuel-indexer-test/schema/fuel_indexer_test.graphql b/packages/fuel-indexer-tests/components/indices/fuel-indexer-test/schema/fuel_indexer_test.graphql
index 48dcf0b15..fd031fb0e 100644
--- a/packages/fuel-indexer-tests/components/indices/fuel-indexer-test/schema/fuel_indexer_test.graphql
+++ b/packages/fuel-indexer-tests/components/indices/fuel-indexer-test/schema/fuel_indexer_test.graphql
@@ -1,325 +1,321 @@
-type PingEntity {
-    id: ID!
-    value: UInt8!
-    message: Charfield!
+type PingEntity @entity {
+  id: ID!
+  value: UInt8!
+  message: Charfield!
 }
 
-type PungEntity {
-    id: ID!
-    value: UInt8!
-    is_pung: Boolean!
-    pung_from: Identity!
+type PungEntity @entity {
+  id: ID!
+  value: UInt8!
+  is_pung: Boolean!
+  pung_from: Identity!
 }
 
-type U16Entity {
-    id: ID!
-    value1: UInt16!
-    value2: Int16!
+type U16Entity @entity {
+  id: ID!
+  value1: UInt16!
+  value2: Int16!
 }
 
-type PongEntity {
-    id: ID!
-    value: UInt8!
+type PongEntity @entity {
+  id: ID!
+  value: UInt8!
 }
 
-type BlockEntity {
-    id: ID!
-    height: UInt8!
-    timestamp: Int8!
+type BlockEntity @entity {
+  id: ID!
+  height: UInt8!
+  timestamp: Int8!
 }
 
-
-type TxEntity {
-    id: ID!
-    block: BlockEntity!
-    input_data: Json!
-    timestamp: Int8!
+type TxEntity @entity {
+  id: ID!
+  block: BlockEntity!
+  input_data: Json!
+  timestamp: Int8!
 }
 
-type TransferEntity {
-    id: ID!
-    contract_id: ContractId!
-    # 'to' is a reserved SQL word, so using 'recipient'
-    recipient: ContractId!
-    amount: UInt8!
-    asset_id: AssetId!
+type TransferEntity @entity {
+  id: ID!
+  contract_id: ContractId!
+  # 'to' is a reserved SQL word, so using 'recipient'
+  recipient: ContractId!
+  amount: UInt8!
+  asset_id: AssetId!
 }
 
-type TransferOutEntity  {
-    id: ID!
-    contract_id: ContractId!
-    recipient: Address!
-    amount: UInt8!
-    asset_id: AssetId!
+type TransferOutEntity @entity {
+  id: ID!
+  contract_id: ContractId!
+  recipient: Address!
+  amount: UInt8!
+  asset_id: AssetId!
 }
 
-type LogEntity  {
-    id: ID!
-    contract_id: ContractId!
-    ra: UInt8!
-    rb: UInt8!
+type LogEntity @entity {
+  id: ID!
+  contract_id: ContractId!
+  ra: UInt8!
+  rb: UInt8!
 }
 
-type ScriptResultEntity  {
-    id: ID!
-    result: UInt8!
-    gas_used: UInt8!
-    blob: Blob!
+type ScriptResultEntity @entity {
+  id: ID!
+  result: UInt8!
+  gas_used: UInt8!
+  blob: Blob!
 }
 
-type MessageOutEntity  {
-    id: ID!
-    message_id: MessageId!
-    sender: Address!
-    recipient: Address!
-    amount: UInt8!
-    nonce: Nonce!
-    len: UInt8!
-    digest: Bytes32!
+type MessageOutEntity @entity {
+  id: ID!
+  message_id: MessageId!
+  sender: Address!
+  recipient: Address!
+  amount: UInt8!
+  nonce: Nonce!
+  len: UInt8!
+  digest: Bytes32!
 }
 
-type OptionEntity {
-    id: ID!
-    int_required: UInt8!
-    int_optional_some: UInt8
-    addr_optional_none: Address
+type OptionEntity @entity {
+  id: ID!
+  int_required: UInt8!
+  int_optional_some: UInt8
+  addr_optional_none: Address
 }
 
-type TupleEntity {
-    id: ID!
-    complex_a: Charfield!
-    complex_b: UInt8!
-    simple_a: Charfield!
+type TupleEntity @entity {
+  id: ID!
+  complex_a: Charfield!
+  complex_b: UInt8!
+  simple_a: Charfield!
 }
 
-type MessageEntity {
-    id: ID!
-    message: Charfield!
+type MessageEntity @entity {
+  id: ID!
+  message: Charfield!
 }
 
-type CallEntity {
-    id: ID!
-    contract_id: ContractId!
-    callee: ContractId!
-    asset_id: AssetId!
-    gas: UInt8!
-    fn_name: Charfield!
-    amount: UInt8!
+type CallEntity @entity {
+  id: ID!
+  contract_id: ContractId!
+  callee: ContractId!
+  asset_id: AssetId!
+  gas: UInt8!
+  fn_name: Charfield!
+  amount: UInt8!
 }
 
-type PanicEntity {
-    id: ID!
-    contract_id: ContractId!
-    reason: UInt4!
+type PanicEntity @entity {
+  id: ID!
+  contract_id: ContractId!
+  reason: UInt4!
 }
 
-type RevertEntity {
-    id: ID!
-    contract_id: ContractId!
-    error_val: UInt8!
+type RevertEntity @entity {
+  id: ID!
+  contract_id: ContractId!
+  error_val: UInt8!
 }
 
-type Genre {
-    id: ID!
-    name: Charfield!
+type Genre @entity {
+  id: ID!
+  name: Charfield!
 }
 
-type Person {
-    id: ID!
-    name: Charfield!
+type Person @entity {
+  id: ID!
+  name: Charfield!
 }
 
-type Planet {
-    id: ID!
-    name: Charfield!
+type Planet @entity {
+  id: ID!
+  name: Charfield!
 }
 
-type Continent {
-    id: ID!
-    name: Charfield!
-    planet: Planet!
+type Continent @entity {
+  id: ID!
+  name: Charfield!
+  planet: Planet!
 }
 
-type Country {
-    id: ID!
-    name: Charfield!
-    continent: Continent!
+type Country @entity {
+  id: ID!
+  name: Charfield!
+  continent: Continent!
 }
 
-type Region {
-    id: ID!
-    name: Charfield!
-    country: Country!
+type Region @entity {
+  id: ID!
+  name: Charfield!
+  country: Country!
 }
 
-type City {
-    id: ID!
-    name: Charfield!
-    region: Region!
+type City @entity {
+  id: ID!
+  name: Charfield!
+  region: Region!
 }
 
-type Author {
-    id: ID!
-    name: Charfield!
-    genre: Genre!
+type Author @entity {
+  id: ID!
+  name: Charfield!
+  genre: Genre!
 }
 
-type Library {
-    id: ID!
-    name: Charfield!
-    city: City!
+type Library @entity {
+  id: ID!
+  name: Charfield!
+  city: City!
 }
 
-type Book {
-    id: ID!
-    name: Charfield!
-    author: Author! @indexed
-    library: Library!
-    genre: Genre!
+type Book @entity {
+  id: ID!
+  name: Charfield!
+  author: Author! @indexed
+  library: Library!
+  genre: Genre!
 }
 
-type Sponsor {
-    id: ID!
-    name: Charfield! @unique
-    amount: UInt8!
-    representative: Person!
+type Sponsor @entity {
+  id: ID!
+  name: Charfield! @unique
+  amount: UInt8!
+  representative: Person!
 }
 
 # TODO: Fix nullable foreign keys; there seems to be issues during codegen
-type BookClub {
-    id: ID!
-    book: Book!
-    member: Person!
-    corporate_sponsor: Sponsor! @join(on:name)
+type BookClub @entity {
+  id: ID!
+  book: Book!
+  member: Person!
+  corporate_sponsor: Sponsor! @join(on: name)
 }
 
-type Municipality {
-    id: ID!
-    name: Charfield! @unique
+type Municipality @entity {
+  id: ID!
+  name: Charfield! @unique
 }
 
-type SportsTeam {
-    id: ID!
-    name: Charfield!
-    municipality: Municipality! @join(on:name)
+type SportsTeam @entity {
+  id: ID!
+  name: Charfield!
+  municipality: Municipality! @join(on: name)
 }
 
-type InnerFilterEntity {
-    id: ID!
-    inner_foo: Charfield!
-    inner_bar: UInt8!
-    inner_baz: UInt8!
+type InnerFilterEntity @entity {
+  id: ID!
+  inner_foo: Charfield!
+  inner_bar: UInt8!
+  inner_baz: UInt8!
 }
 
-type FilterEntity {
-    id: ID!
-    foola: Charfield!
-    maybe_null_bar: UInt8
-    bazoo: UInt8!
-    inner_entity: InnerFilterEntity!
+type FilterEntity @entity {
+  id: ID!
+  foola: Charfield!
+  maybe_null_bar: UInt8
+  bazoo: UInt8!
+  inner_entity: InnerFilterEntity!
 }
 
-type EnumError {
-    id: ID!
-    contract_id: ContractId!
-    error_val: UInt8!
+type EnumError @entity {
+  id: ID!
+  contract_id: ContractId!
+  error_val: UInt8!
 }
 
-type ExplorerEntity {
-    id: ID!
-    nonce: Nonce!
-    time: Tai64Timestamp
-    hex: HexString
-    sig: Signature!
-    bytes: Bytes64!
+type ExplorerEntity @entity {
+  id: ID!
+  nonce: Nonce!
+  time: Tai64Timestamp
+  hex: HexString
+  sig: Signature!
+  bytes: Bytes64!
 }
 
-enum EnumEntity {
-    One
-    Two
-    Three
+enum EnumEntity @entity {
+  One
+  Two
+  Three
 }
 
-type ComplexEnumEntity {
-    id: ID!
-    one: EnumEntity
+type ComplexEnumEntity @entity {
+  id: ID!
+  one: EnumEntity
 }
 
-type VirtualEntity {
-    name: Charfield @virtual
-    size: UInt1!
+type VirtualEntity @entity(virtual: true) {
+  name: Charfield
+  size: UInt1!
 }
 
-
-type UsesVirtualEntity {
-    id: ID!
-    name: Charfield!
-    no_table: VirtualEntity!
+type UsesVirtualEntity @entity {
+  id: ID!
+  name: Charfield!
+  no_table: VirtualEntity!
 }
 
 enum UnionType {
-    A
-    B
-    C
+  A
+  B
+  C
 }
 
-type IndexableUnionA {
-    id: ID!
-    a: UInt8!
-    union_type: UnionType!
+type IndexableUnionA @entity {
+  id: ID!
+  a: UInt8!
+  union_type: UnionType!
 }
 
-type IndexableUnionB {
-    id: ID!
-    b: UInt8!
-    union_type: UnionType!
+type IndexableUnionB @entity {
+  id: ID!
+  b: UInt8!
+  union_type: UnionType!
 }
 
-type IndexableUnionC {
-    id: ID!
-    c: UInt8!
-    union_type: UnionType!
+type IndexableUnionC @entity {
+  id: ID!
+  c: UInt8!
+  union_type: UnionType!
 }
 
-type VirtualUnionA {
-    a: UInt8! @virtual
-    union_type: UnionType!
+type VirtualUnionA @entity(virtual: true) {
+  a: UInt8!
+  union_type: UnionType!
 }
 
-type VirtualUnionB {
-    b: UInt8! @virtual
-    union_type: UnionType!
+type VirtualUnionB @entity(virtual: true) {
+  b: UInt8!
+  union_type: UnionType!
 }
 
-type VirtualUnionC {
-    c: UInt8! @virtual
-    union_type: UnionType!
+type VirtualUnionC @entity(virtual: true) {
+  c: UInt8!
+  union_type: UnionType!
 }
 
 union IndexableUnionEntity = IndexableUnionA | IndexableUnionB | IndexableUnionC
 
 union VirtualUnionEntity = VirtualUnionA | VirtualUnionB | VirtualUnionC
 
-type VirtualUnionContainerEntity {
-    id: ID!
-    union_entity: VirtualUnionEntity
-    union_type: UnionType!
+type VirtualUnionContainerEntity @entity {
+  id: ID!
+  union_entity: VirtualUnionEntity
+  union_type: UnionType!
 }
 
-
-type ListFKType {
-    id: ID!
-    value: UInt8!
+type ListFKType @entity {
+  id: ID!
+  value: UInt8!
 }
 
-type ListTypeEntity {
-    id: ID!
-    foo: Charfield!
-    required_all: [ListFKType!]!
-    optional_inner: [Charfield]!
-    optional_outer: [UInt8!]
-    optional_all: [UInt8]
-    virtual_optional_inner: [VirtualEntity]!
-    enum_required_all: [EnumEntity!]!
+type ListTypeEntity @entity {
+  id: ID!
+  foo: Charfield!
+  required_all: [ListFKType!]!
+  optional_inner: [Charfield]!
+  optional_outer: [UInt8!]
+  optional_all: [UInt8]
+  virtual_optional_inner: [VirtualEntity]!
+  enum_required_all: [EnumEntity!]!
 }
-
diff --git a/packages/fuel-indexer-tests/components/indices/simple-wasm/bad_simple_wasm.graphql b/packages/fuel-indexer-tests/components/indices/simple-wasm/bad_simple_wasm.graphql
index dcf102053..24363e035 100644
--- a/packages/fuel-indexer-tests/components/indices/simple-wasm/bad_simple_wasm.graphql
+++ b/packages/fuel-indexer-tests/components/indices/simple-wasm/bad_simple_wasm.graphql
@@ -1,10 +1,10 @@
-type Thing1 {
-    id: ID!
-    account: Address!
+type Thing1 @entity {
+  id: ID!
+  account: Address!
 }
 
-type Thing2 {
-    id: ID!
-    account: Address! @indexed
-    hash: Bytes32! @indexed
+type Thing2 @entity {
+  id: ID!
+  account: Address! @indexed
+  hash: Bytes32! @indexed
 }
diff --git a/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/schema.graphql b/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/schema.graphql
index dcf102053..24363e035 100644
--- a/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/schema.graphql
+++ b/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/schema.graphql
@@ -1,10 +1,10 @@
-type Thing1 {
-    id: ID!
-    account: Address!
+type Thing1 @entity {
+  id: ID!
+  account: Address!
 }
 
-type Thing2 {
-    id: ID!
-    account: Address! @indexed
-    hash: Bytes32! @indexed
+type Thing2 @entity {
+  id: ID!
+  account: Address! @indexed
+  hash: Bytes32! @indexed
 }
diff --git a/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/simple_wasm.graphql b/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/simple_wasm.graphql
index dcf102053..24363e035 100644
--- a/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/simple_wasm.graphql
+++ b/packages/fuel-indexer-tests/components/indices/simple-wasm/schema/simple_wasm.graphql
@@ -1,10 +1,10 @@
-type Thing1 {
-    id: ID!
-    account: Address!
+type Thing1 @entity {
+  id: ID!
+  account: Address!
 }
 
-type Thing2 {
-    id: ID!
-    account: Address! @indexed
-    hash: Bytes32! @indexed
+type Thing2 @entity {
+  id: ID!
+  account: Address! @indexed
+  hash: Bytes32! @indexed
 }
diff --git a/packages/fuel-indexer-tests/components/indices/simple-wasm/simple_wasm.wasm b/packages/fuel-indexer-tests/components/indices/simple-wasm/simple_wasm.wasm
index b5cebab24..8251a7037 100644
Binary files a/packages/fuel-indexer-tests/components/indices/simple-wasm/simple_wasm.wasm and b/packages/fuel-indexer-tests/components/indices/simple-wasm/simple_wasm.wasm differ
diff --git a/packages/fuel-indexer-tests/tests/integration/graphql_schema.rs b/packages/fuel-indexer-tests/tests/integration/graphql_schema.rs
index 6036a7310..caad17eb2 100644
--- a/packages/fuel-indexer-tests/tests/integration/graphql_schema.rs
+++ b/packages/fuel-indexer-tests/tests/integration/graphql_schema.rs
@@ -10,13 +10,13 @@ use std::collections::HashMap;
 
 fn generate_schema() -> IndexerSchema {
     let schema = r#"
-type Thing1 {
+type Thing1 @entity {
     id: ID!
     account: Address!
     huge_number: UInt16!
 }
 
-type Thing2 {
+type Thing2 @entity {
     id: ID!
     account: Address!
     hash: Bytes32!
diff --git a/plugins/forc-index/src/defaults.rs b/plugins/forc-index/src/defaults.rs
index 5398ce473..df4d62742 100644
--- a/plugins/forc-index/src/defaults.rs
+++ b/plugins/forc-index/src/defaults.rs
@@ -201,13 +201,13 @@ pub mod {indexer_name}_index_mod {{
 }
 
 pub fn default_indexer_schema() -> String {
-    r#"type Block {
+    r#"type Block @entity {
     id: ID!
     height: UInt8!
     hash: Bytes32! @unique
 }
 
-type Transaction {
+type Transaction @entity {
     id: ID!
     block: Block! @join(on:hash)
     hash: Bytes32! @unique