ValheimGuideCrossplay and mods can run together on a Valheim server when the mods work from the server alone. Server-only mods like ServersideQoL keep crossplay on, so…
Crossplay and mods can run together on a Valheim server when the mods work from the server alone. Server-only mods like ServersideQoL keep crossplay on, so Xbox, PlayStation, Switch 2, Game Pass and Mac App Store players still join. A mod every player has to install on their own PC turns crossplay off, because those players can't install mods. If everyone in your group is on Steam, mod freely.
Server-only mods run entirely on your server. Players join with a normal, unmodded game and still get the effect. ServersideQoL and its add-ons are examples: stacking inventories into chests, sorting chests, refueling smelters from nearby containers, and more. These work with crossplay on.
Mods players install too change what each player's own game shows or does: new items, building pieces, creatures, map and UI mods. Every player needs a matching copy on their PC, which console, Game Pass and Mac App Store players can't do. These need crossplay off.
The Mods card says which kind each mod is: server-only mods are marked as working from the server, and mods players install are marked as needing a copy on a PC.
Installing a server-only mod while Crossplay is on: it saves like any other change, and crossplay stays on.
Installing a mod players need while Crossplay is on: saving turns crossplay off, and the save screen names the mods that need a copy on each player's PC before it happens.
Turning Crossplay on while a mod players need is installed: the save is blocked until you remove that mod, so a modded world never silently loses its mods. Server-only mods can stay installed.

One honest note: we haven't yet watched a console player join a crossplay server running a server-only mod ourselves. ServersideQoL's author builds and tests it for Xbox, PlayStation and Switch players. If a console friend can't join after you add one, remove it on the Mods card and tell us in chat so we can look into it.
Anyone on console, Game Pass, or the Mac App Store version? Keep crossplay on and pick server-only mods. Valheim's world modifiers also give you plenty to tune with no mods at all: difficulty, resource rates, raids, portals, and more. See World modifiers and presets.
Everyone on Steam? Every mod is open to you. One-click installs from Thunderstore in your dashboard, with download links your players use to match the server. See what your players need to install.
Mixed, and torn? Some groups run crossplay with server-only mods while console friends are active, then switch to a fully modded chapter later. Switching is a settings change, not a new server, and your world stays put. Mods change what a world contains, so take a manual backup before big modpack experiments.
Remove the mods your players had to install from the Mods tab (server-only mods can stay), then turn Crossplay on and save. Worlds that used content-adding mods can lose the modded items when played without them, so back up first and think it through for heavy modpacks.
Turn Crossplay off, save, then install any mods. Console, Game Pass, and Mac App Store friends join only by crossplay, so they need it back on: remove the mods players install to turn it on again.