diff --git a/packages/next-server/server/config.js b/packages/next-server/server/config.js
index b560b475..943edc6b 100644
--- a/packages/next-server/server/config.js
+++ b/packages/next-server/server/config.js
@@ -1,6 +1,8 @@
 import findUp from 'find-up'
 import {CONFIG_FILE} from 'next-server/constants'
 
+const targets = ['server', 'serverless']
+
 const defaultConfig = {
   webpack: null,
   webpackDevMiddleware: null,
@@ -11,13 +13,21 @@ const defaultConfig = {
   useFileSystemPublicRoutes: true,
   generateBuildId: () => null,
   generateEtags: true,
-  pageExtensions: ['jsx', 'js']
+  pageExtensions: ['jsx', 'js'],
+  target: 'server'
+}
+
+function normalizeConfig (phase, config) {
+  if (typeof config === 'function') {
+    return config(phase, {defaultConfig})
+  }
+
+  return config
 }
 
 export default function loadConfig (phase, dir, customConfig) {
   if (customConfig) {
-    customConfig.configOrigin = 'server'
-    return {...defaultConfig, ...customConfig}
+    return {...defaultConfig, configOrigin: 'server', ...customConfig}
   }
   const path = findUp.sync(CONFIG_FILE, {
     cwd: dir
@@ -26,12 +36,11 @@ export default function loadConfig (phase, dir, customConfig) {
   // If config file was found
   if (path && path.length) {
     const userConfigModule = require(path)
-    const userConfigInitial = userConfigModule.default || userConfigModule
-    if (typeof userConfigInitial === 'function') {
-      return {...defaultConfig, configOrigin: CONFIG_FILE, ...userConfigInitial(phase, {defaultConfig})}
+    const userConfig = normalizeConfig(phase, userConfigModule.default || userConfigModule)
+    if (userConfig.target && !targets.includes(userConfig.target)) {
+      throw new Error(`Specified target is invalid. Provided: "${userConfig.target}" should be one of ${targets.join(', ')}`)
     }
-
-    return {...defaultConfig, configOrigin: CONFIG_FILE, ...userConfigInitial}
+    return {...defaultConfig, configOrigin: CONFIG_FILE, ...userConfig}
   }
 
   return defaultConfig
diff --git a/packages/next-server/server/get-page-files.ts b/packages/next-server/server/get-page-files.ts
index 2621c027..6e230959 100644
--- a/packages/next-server/server/get-page-files.ts
+++ b/packages/next-server/server/get-page-files.ts
@@ -1,4 +1,4 @@
-import {normalizePagePath} from './require'
+import { normalizePagePath } from './normalize-page-path'
 
 export type BuildManifest = {
   devFiles: string[],
diff --git a/packages/next-server/server/next-server.ts b/packages/next-server/server/next-server.ts
index 96bb4ff9..ee1ec065 100644
--- a/packages/next-server/server/next-server.ts
+++ b/packages/next-server/server/next-server.ts
@@ -10,7 +10,7 @@ import {serveStatic} from './serve-static'
 import Router, {route, Route} from './router'
 import { isInternalUrl, isBlockedPage } from './utils'
 import loadConfig from 'next-server/next-config'
-import {PHASE_PRODUCTION_SERVER, BUILD_ID_FILE, CLIENT_STATIC_FILES_PATH, CLIENT_STATIC_FILES_RUNTIME, BUILD_MANIFEST, REACT_LOADABLE_MANIFEST, SERVER_DIRECTORY} from 'next-server/constants'
+import {PHASE_PRODUCTION_SERVER, BUILD_ID_FILE, CLIENT_STATIC_FILES_PATH, CLIENT_STATIC_FILES_RUNTIME} from 'next-server/constants'
 import * as asset from '../lib/asset'
 import * as envConfig from '../lib/runtime-config'
 import {loadComponents} from './load-components'
@@ -32,7 +32,6 @@ export default class Server {
   buildId: string
   renderOpts: {
     staticMarkup: boolean,
-    distDir: string,
     buildId: string,
     generateEtags: boolean,
     runtimeConfig?: {[key: string]: any},
@@ -54,7 +53,6 @@ export default class Server {
     this.buildId = this.readBuildId()
     this.renderOpts = {
       staticMarkup,
-      distDir: this.distDir,
       buildId: this.buildId,
       generateEtags
     }
diff --git a/packages/next-server/server/normalize-page-path.ts b/packages/next-server/server/normalize-page-path.ts
new file mode 100644
index 00000000..58afe2b4
--- /dev/null
+++ b/packages/next-server/server/normalize-page-path.ts
@@ -0,0 +1,17 @@
+import { posix } from 'path'
+export function normalizePagePath (page: string): string {
+  // If the page is `/` we need to append `/index`, otherwise the returned directory root will be bundles instead of pages
+  if (page === '/') {
+    page = '/index'
+  }
+  // Resolve on anything that doesn't start with `/`
+  if (page[0] !== '/') {
+    page = `/${page}`
+  }
+  // Throw when using ../ etc in the pathname
+  const resolvedPage = posix.normalize(page)
+  if (page !== resolvedPage) {
+    throw new Error('Requested and resolved page mismatch')
+  }
+  return page
+}
diff --git a/packages/next-server/server/render.tsx b/packages/next-server/server/render.tsx
index e3f37eba..c8646c58 100644
--- a/packages/next-server/server/render.tsx
+++ b/packages/next-server/server/render.tsx
@@ -46,7 +46,6 @@ function render(renderElementToString: (element: React.ReactElement<any>) => str
 
 type RenderOpts = {
   staticMarkup: boolean,
-  distDir: string,
   buildId: string,
   runtimeConfig?: {[key: string]: any},
   assetPrefix?: string,
diff --git a/packages/next-server/server/require.ts b/packages/next-server/server/require.ts
index 3ea44abc..8f30eb01 100644
--- a/packages/next-server/server/require.ts
+++ b/packages/next-server/server/require.ts
@@ -1,5 +1,6 @@
-import {join, posix} from 'path'
+import {join} from 'path'
 import {PAGES_MANIFEST, SERVER_DIRECTORY} from 'next-server/constants'
+import { normalizePagePath } from './normalize-page-path'
 
 export function pageNotFoundError (page: string): Error {
   const err: any = new Error(`Cannot find module for page: ${page}`)
@@ -7,26 +8,6 @@ export function pageNotFoundError (page: string): Error {
   return err
 }
 
-export function normalizePagePath (page: string): string {
-  // If the page is `/` we need to append `/index`, otherwise the returned directory root will be bundles instead of pages
-  if (page === '/') {
-    page = '/index'
-  }
-
-  // Resolve on anything that doesn't start with `/`
-  if (page[0] !== '/') {
-    page = `/${page}`
-  }
-
-  // Throw when using ../ etc in the pathname
-  const resolvedPage = posix.normalize(page)
-  if (page !== resolvedPage) {
-    throw new Error('Requested and resolved page mismatch')
-  }
-
-  return page
-}
-
 export function getPagePath (page: string, distDir: string): string {
   const serverBuildPath = join(distDir, SERVER_DIRECTORY)
   const pagesManifest = require(join(serverBuildPath, PAGES_MANIFEST))
diff --git a/packages/next/bin/next-build.ts b/packages/next/bin/next-build.ts
index 34bb1f78..04988be8 100755
--- a/packages/next/bin/next-build.ts
+++ b/packages/next/bin/next-build.ts
@@ -8,11 +8,8 @@ import { printAndExit } from '../server/lib/utils'
 const args = arg({
   // Types
   '--help': Boolean,
-  '--lambdas': Boolean,
-
   // Aliases
-  '-h': '--help',
-  '-l': '--lambdas'
+  '-h': '--help'
 })
 
 if (args['--help']) {
@@ -30,14 +27,15 @@ if (args['--help']) {
 }
 
 const dir = resolve(args._[0] || '.')
-const lambdas = args['--lambdas']
 
-// Check if pages dir exists and warn if not
+// Check if the provided directory exists
 if (!existsSync(dir)) {
   printAndExit(`> No such directory exists as the project root: ${dir}`)
 }
 
+// Check if the pages directory exists
 if (!existsSync(join(dir, 'pages'))) {
+  // Check one level down the tree to see if the pages directory might be there
   if (existsSync(join(dir, '..', 'pages'))) {
     printAndExit('> No `pages` directory found. Did you mean to run `next` in the parent (`../`) directory?')
   }
@@ -45,8 +43,8 @@ if (!existsSync(join(dir, 'pages'))) {
   printAndExit('> Couldn\'t find a `pages` directory. Please create one under the project root')
 }
 
-build(dir, null, lambdas)
+build(dir)
   .catch((err) => {
-    console.error('> Build error occured')
+    console.error('> Build error occurred')
     printAndExit(err)
   })
diff --git a/packages/next/build/index.ts b/packages/next/build/index.ts
index 721c1666..f3dd6852 100644
--- a/packages/next/build/index.ts
+++ b/packages/next/build/index.ts
@@ -7,24 +7,84 @@ import {generateBuildId} from './generate-build-id'
 import {writeBuildId} from './write-build-id'
 import {isWriteable} from './is-writeable'
 import {runCompiler, CompilerResult} from './compiler'
+import globModule from 'glob'
+import {promisify} from 'util'
+import {stringify} from 'querystring'
+import {ServerlessLoaderQuery} from './webpack/loaders/next-serverless-loader'
 
-export default async function build (dir: string, conf = null, lambdas: boolean = false): Promise<void> {
+const glob = promisify(globModule)
+
+function collectPages (directory: string, pageExtensions: string[]): Promise<string[]> {
+  return glob(`**/*.+(${pageExtensions.join('|')})`, {cwd: directory})
+}
+
+export default async function build (dir: string, conf = null): Promise<void> {
   if (!await isWriteable(dir)) {
     throw new Error('> Build directory is not writeable. https://err.sh/zeit/next.js/build-dir-not-writeable')
   }
 
   const config = loadConfig(PHASE_PRODUCTION_BUILD, dir, conf)
-  const lambdasOption = config.lambdas ? config.lambdas : lambdas
-  const distDir = join(dir, config.distDir)
   const buildId = await generateBuildId(config.generateBuildId, nanoid)
+  const distDir = join(dir, config.distDir)
+  const pagesDir = join(dir, 'pages')
+
+  const pagePaths = await collectPages(pagesDir, config.pageExtensions)
+  type Result = {[page: string]: string}
+  const pages: Result = pagePaths.reduce((result: Result, pagePath): Result => {
+    let page = `/${pagePath.replace(new RegExp(`\\.+(${config.pageExtensions.join('|')})$`), '').replace(/\\/g, '/')}`.replace(/\/index$/, '')
+    page = page === '' ? '/' : page
+    result[page] = pagePath
+    return result
+  }, {})
+
+  let entrypoints
+  if (config.target === 'serverless') {
+    const serverlessEntrypoints: any = {}
+    // Because on Windows absolute paths in the generated code can break because of numbers, eg 1 in the path,
+    // we have to use a private alias
+    const pagesDirAlias = 'private-next-pages'
+    const dotNextDirAlias = 'private-dot-next'
+    const absoluteAppPath = pages['/_app'] ? join(pagesDirAlias, pages['/_app']).replace(/\\/g, '/') : 'next/dist/pages/_app'
+    const absoluteDocumentPath = pages['/_document'] ? join(pagesDirAlias, pages['/_document']).replace(/\\/g, '/') : 'next/dist/pages/_document'
+    const absoluteErrorPath = pages['/_error'] ? join(pagesDirAlias, pages['/_error']).replace(/\\/g, '/') : 'next/dist/pages/_error'
+
+    const defaultOptions = {
+      absoluteAppPath,
+      absoluteDocumentPath,
+      absoluteErrorPath,
+      distDir: dotNextDirAlias,
+      buildId,
+      assetPrefix: config.assetPrefix,
+      generateEtags: config.generateEtags
+    }
+
+    Object.keys(pages).forEach(async (page) => {
+      if (page === '/_app' || page === '/_document') {
+        return
+      }
+
+      const absolutePagePath = join(pagesDirAlias, pages[page]).replace(/\\/g, '/')
+      const bundleFile = page === '/' ? '/index.js' : `${page}.js`
+      const serverlessLoaderOptions: ServerlessLoaderQuery = {page, absolutePagePath, ...defaultOptions}
+      serverlessEntrypoints[join('pages', bundleFile)] = `next-serverless-loader?${stringify(serverlessLoaderOptions)}!`
+    })
+
+    const errorPage = join('pages', '/_error.js')
+    if (!serverlessEntrypoints[errorPage]) {
+      const serverlessLoaderOptions: ServerlessLoaderQuery = {page: '/_error', absolutePagePath: 'next/dist/pages/_error', ...defaultOptions}
+      serverlessEntrypoints[errorPage] = `next-serverless-loader?${stringify(serverlessLoaderOptions)}!`
+    }
+
+    entrypoints = serverlessEntrypoints
+  }
 
   const configs: any = await Promise.all([
-    getBaseWebpackConfig(dir, { buildId, isServer: false, config, lambdas: lambdasOption }),
-    getBaseWebpackConfig(dir, { buildId, isServer: true, config, lambdas: lambdasOption })
+    getBaseWebpackConfig(dir, { buildId, isServer: false, config, target: config.target }),
+    getBaseWebpackConfig(dir, { buildId, isServer: true, config, target: config.target, entrypoints })
   ])
 
   let result: CompilerResult = {warnings: [], errors: []}
-  if (lambdasOption) {
+  if (config.target === 'serverless') {
     const clientResult = await runCompiler([configs[0]])
     const serverResult = await runCompiler([configs[1]])
     result = {warnings: [...clientResult.warnings, ...serverResult.warnings], errors: [...clientResult.errors, ...serverResult.errors]}
@@ -34,11 +94,11 @@ export default async function build (dir: string, conf = null, lambdas: boolean
 
   if (result.warnings.length > 0) {
     console.warn('> Emitted warnings from webpack')
-    console.warn(...result.warnings)
+    result.warnings.forEach((warning) => console.warn(warning))
   }
 
   if (result.errors.length > 0) {
-    console.error(...result.errors)
+    result.errors.forEach((error) => console.error(error))
     throw new Error('> Build failed because of webpack errors')
   }
   await writeBuildId(distDir, buildId)
diff --git a/packages/next/build/webpack-config.js b/packages/next/build/webpack-config.js
index 3979f2c3..8bc71e45 100644
--- a/packages/next/build/webpack-config.js
+++ b/packages/next/build/webpack-config.js
@@ -15,54 +15,24 @@ import BuildManifestPlugin from './webpack/plugins/build-manifest-plugin'
 import ChunkNamesPlugin from './webpack/plugins/chunk-names-plugin'
 import { ReactLoadablePlugin } from './webpack/plugins/react-loadable-plugin'
 import {SERVER_DIRECTORY, REACT_LOADABLE_MANIFEST, CLIENT_STATIC_FILES_RUNTIME_WEBPACK, CLIENT_STATIC_FILES_RUNTIME_MAIN} from 'next-server/constants'
-import {NEXT_PROJECT_ROOT, NEXT_PROJECT_ROOT_NODE_MODULES, NEXT_PROJECT_ROOT_DIST_CLIENT, NEXT_PROJECT_ROOT_DIST_SERVER, DEFAULT_PAGES_DIR} from '../lib/constants'
+import {NEXT_PROJECT_ROOT, NEXT_PROJECT_ROOT_NODE_MODULES, NEXT_PROJECT_ROOT_DIST_CLIENT, DEFAULT_PAGES_DIR} from '../lib/constants'
 import AutoDllPlugin from 'autodll-webpack-plugin'
 import TerserPlugin from 'terser-webpack-plugin'
 import AssetsSizePlugin from './webpack/plugins/assets-size-plugin'
+import {ServerlessPlugin} from './webpack/plugins/serverless-plugin'
 
 // The externals config makes sure that
 // on the server side when modules are
 // in node_modules they don't get compiled by webpack
-function externalsConfig (dir, isServer, lambdas) {
+function externalsConfig (isServer, target) {
   const externals = []
 
-  if (!isServer) {
+  // When the serverless target is used all node_modules will be compiled into the output bundles
+  // So that the serverless bundles have 0 runtime dependencies
+  if (!isServer || target === 'serverless') {
     return externals
   }
 
-  // When lambdas mode is enabled all node_modules will be compiled into the server bundles
-  // So that all dependencies can be devDependencies and are not required to be installed
-  if (lambdas) {
-    return [
-      (context, request, callback) => {
-        // Make react/react-dom external until we bundle the server/renderer.
-        if (request === 'react' || request === 'react-dom') {
-          return callback(null, `commonjs ${request}`)
-        }
-
-        resolve(request, { basedir: context, preserveSymlinks: true }, (err, res) => {
-          if (err) {
-            return callback()
-          }
-          if (res.match(/next-server[/\\]dist[/\\]lib[/\\]head/)) {
-            return callback(null, `commonjs next-server/dist/lib/head.js`)
-          }
-          if (res.match(/next-server[/\\]dist[/\\]lib[/\\]asset/)) {
-            return callback(null, `commonjs next-server/dist/lib/asset.js`)
-          }
-          if (res.match(/next-server[/\\]dist[/\\]lib[/\\]runtime-config/)) {
-            return callback(null, `commonjs next-server/dist/lib/runtime-config.js`)
-          }
-          // Default pages have to be transpiled
-          if (res.match(/next-server[/\\]dist[/\\]lib[/\\]loadable/)) {
-            return callback(null, `commonjs next-server/dist/lib/loadable.js`)
-          }
-          callback()
-        })
-      }
-    ]
-  }
-
   const notExternalModules = ['next/app', 'next/document', 'next/link', 'next/router', 'next/error', 'http-status', 'string-hash', 'ansi-html', 'hoist-non-react-statics', 'htmlescape']
 
   externals.push((context, request, callback) => {
@@ -101,7 +71,7 @@ function externalsConfig (dir, isServer, lambdas) {
   return externals
 }
 
-function optimizationConfig ({ dir, dev, isServer, totalPages, lambdas }) {
+function optimizationConfig ({ dev, isServer, totalPages, target }) {
   const terserPluginConfig = {
     parallel: true,
     sourceMap: false,
@@ -114,7 +84,7 @@ function optimizationConfig ({ dir, dev, isServer, totalPages, lambdas }) {
     }
   }
 
-  if (isServer && lambdas) {
+  if (isServer && target === 'serverless') {
     return {
       splitChunks: false,
       minimizer: [
@@ -169,7 +139,7 @@ function optimizationConfig ({ dir, dev, isServer, totalPages, lambdas }) {
   return config
 }
 
-export default async function getBaseWebpackConfig (dir, {dev = false, isServer = false, buildId, config, lambdas = false}) {
+export default async function getBaseWebpackConfig (dir, {dev = false, isServer = false, buildId, config, target = 'server', entrypoints = false}) {
   const defaultLoaders = {
     babel: {
       loader: 'next-babel-loader',
@@ -194,7 +164,8 @@ export default async function getBaseWebpackConfig (dir, {dev = false, isServer
     .filter((p) => !!p)
 
   const distDir = path.join(dir, config.distDir)
-  const outputPath = path.join(distDir, isServer ? SERVER_DIRECTORY : '')
+  const outputDir = target === 'serverless' ? 'serverless' : SERVER_DIRECTORY
+  const outputPath = path.join(distDir, isServer ? outputDir : '')
   const pagesEntries = await getPages(dir, {nextPagesDir: DEFAULT_PAGES_DIR, dev, buildId, isServer, pageExtensions: config.pageExtensions.join('|')})
   const totalPages = Object.keys(pagesEntries).length
   const clientEntries = !isServer ? {
@@ -204,9 +175,6 @@ export default async function getBaseWebpackConfig (dir, {dev = false, isServer
       path.join(NEXT_PROJECT_ROOT_DIST_CLIENT, (dev ? `next-dev` : 'next'))
     ].filter(Boolean)
   } : {}
-  const devServerEntries = dev && isServer ? {
-    'error-debug.js': path.join(NEXT_PROJECT_ROOT_DIST_SERVER, 'error-debug.js')
-  } : {}
 
   const resolveConfig = {
     // Disable .mjs for node_modules bundling
@@ -217,7 +185,9 @@ export default async function getBaseWebpackConfig (dir, {dev = false, isServer
       ...nodePathList // Support for NODE_PATH environment variable
     ],
     alias: {
-      next: NEXT_PROJECT_ROOT
+      next: NEXT_PROJECT_ROOT,
+      'private-next-pages': path.join(dir, 'pages'),
+      'private-dot-next': distDir
     },
     mainFields: isServer ? ['main'] : ['browser', 'module', 'main']
   }
@@ -229,15 +199,17 @@ export default async function getBaseWebpackConfig (dir, {dev = false, isServer
     devtool: dev ? 'cheap-module-source-map' : false,
     name: isServer ? 'server' : 'client',
     target: isServer ? 'node' : 'web',
-    externals: externalsConfig(dir, isServer, lambdas),
-    optimization: optimizationConfig({dir, dev, isServer, totalPages, lambdas}),
+    externals: externalsConfig(isServer, target),
+    optimization: optimizationConfig({dir, dev, isServer, totalPages, target}),
     recordsPath: path.join(outputPath, 'records.json'),
     context: dir,
     // Kept as function to be backwards compatible
     entry: async () => {
+      if (entrypoints) {
+        return entrypoints
+      }
       return {
         ...clientEntries,
-        ...devServerEntries,
         // Only _error and _document when in development. The rest is handled by on-demand-entries
         ...pagesEntries
       }
@@ -292,6 +264,7 @@ export default async function getBaseWebpackConfig (dir, {dev = false, isServer
       ].filter(Boolean)
     },
     plugins: [
+      target === 'serverless' && isServer && new ServerlessPlugin(),
       // Precompile react / react-dom for development, speeding up webpack
       dev && !isServer && new AutoDllPlugin({
         filename: '[name]_[hash].js',
@@ -334,11 +307,11 @@ export default async function getBaseWebpackConfig (dir, {dev = false, isServer
       !isServer && dev && new webpack.DefinePlugin({
         'process.env.__NEXT_DIST_DIR': JSON.stringify(distDir)
       }),
-      isServer && new PagesManifestPlugin(),
+      target !== 'serverless' && isServer && new PagesManifestPlugin(),
       !isServer && new BuildManifestPlugin(),
       !isServer && new PagesPlugin(),
       isServer && new NextJsSsrImportPlugin(),
-      isServer && new NextJsSSRModuleCachePlugin({outputPath}),
+      target !== 'serverless' && isServer && new NextJsSSRModuleCachePlugin({outputPath}),
       !isServer && !dev && new AssetsSizePlugin({buildId, distDir})
     ].filter(Boolean)
   }
diff --git a/packages/next/build/webpack/loaders/next-serverless-loader.ts b/packages/next/build/webpack/loaders/next-serverless-loader.ts
new file mode 100644
index 00000000..045176eb
--- /dev/null
+++ b/packages/next/build/webpack/loaders/next-serverless-loader.ts
@@ -0,0 +1,92 @@
+import {loader} from 'webpack'
+import {join} from 'path'
+import {parse} from 'querystring'
+import { BUILD_MANIFEST, REACT_LOADABLE_MANIFEST } from 'next-server/constants'
+
+export type ServerlessLoaderQuery = {
+  page: string,
+  distDir: string,
+  absolutePagePath: string,
+  absoluteAppPath: string,
+  absoluteDocumentPath: string,
+  absoluteErrorPath: string,
+  buildId: string,
+  assetPrefix: string,
+  generateEtags: string
+}
+
+const nextServerlessLoader: loader.Loader = function () {
+  const {
+    distDir,
+    absolutePagePath,
+    page,
+    buildId,
+    assetPrefix,
+    absoluteAppPath,
+    absoluteDocumentPath,
+    absoluteErrorPath,
+    generateEtags
+  }: ServerlessLoaderQuery = typeof this.query === 'string' ? parse(this.query.substr(1)) : this.query
+  const buildManifest = join(distDir, BUILD_MANIFEST).replace(/\\/g, '/')
+  const reactLoadableManifest = join(distDir, REACT_LOADABLE_MANIFEST).replace(/\\/g, '/')
+  return `
+    import {parse} from 'url'
+    import {renderToHTML} from 'next-server/dist/server/render';
+    import {sendHTML} from 'next-server/dist/server/send-html';
+    import buildManifest from '${buildManifest}';
+    import reactLoadableManifest from '${reactLoadableManifest}';
+    import Document from '${absoluteDocumentPath}';
+    import Error from '${absoluteErrorPath}';
+    import App from '${absoluteAppPath}';
+    import Component from '${absolutePagePath}';
+    async function render(req, res) {
+      const options = {
+        App,
+        Document,
+        buildManifest,
+        reactLoadableManifest,
+        buildId: "${buildId}",
+        assetPrefix: "${assetPrefix}"
+      }
+      const parsedUrl = parse(req.url, true)
+      try {
+        ${page === '/_error' ? `res.statusCode = 404` : ''}
+        const result = await renderToHTML(req, res, "${page}", parsedUrl.query, {
+          ...options,
+          Component
+        })
+        return result
+      } catch (err) {
+        if (err.code === 'ENOENT') {
+          res.statusCode = 404
+          const result = await renderToHTML(req, res, "/_error", parsedUrl.query, {
+            ...options,
+            Component: Error
+          })
+          return result
+        } else {
+          console.error(err)
+          res.statusCode = 500
+          const result = await renderToHTML(req, res, "/_error", parsedUrl.query, {
+            ...options,
+            Component: Error,
+            err
+          })
+          return result
+        }
+      }
+    }
+    export default async (req, res) => {
+      try {
+        const html = await render(req, res)
+        sendHTML(req, res, html, {generateEtags: ${generateEtags}})
+      } catch(err) {
+        console.error(err)
+        res.statusCode = 500
+        res.end('Internal Server Error')
+      }
+    }
+  `
+}
+
+export default nextServerlessLoader
diff --git a/packages/next/build/webpack/plugins/serverless-plugin.ts b/packages/next/build/webpack/plugins/serverless-plugin.ts
new file mode 100644
index 00000000..e170d324
--- /dev/null
+++ b/packages/next/build/webpack/plugins/serverless-plugin.ts
@@ -0,0 +1,31 @@
+import {Compiler} from 'webpack'
+import GraphHelpers from 'webpack/lib/GraphHelpers'
+/**
+ * Makes sure there are no dynamic chunks when the target is serverless
+ * The dynamic chunks are integrated back into their parent chunk
+ * This is to make sure there is a single render bundle instead of that bundle importing dynamic chunks
+ */
+export class ServerlessPlugin {
+  apply (compiler: Compiler) {
+    compiler.hooks.compilation.tap('ServerlessPlugin', compilation => {
+      compilation.hooks.optimizeChunksBasic.tap(
+        'ServerlessPlugin',
+        chunks => {
+          chunks.forEach((chunk) => {
+            // If chunk is not an entry point skip them
+            if (chunk.hasEntryModule()) {
+              const dynamicChunks = chunk.getAllAsyncChunks()
+              if (dynamicChunks.size !== 0) {
+                for (const dynamicChunk of dynamicChunks) {
+                  for (const module of dynamicChunk.modulesIterable) {
+                    GraphHelpers.connectChunkAndModule(chunk, module)
+                  }
+                }
+              }
+            }
+          })
+        }
+      )
+    })
+  }
+}
diff --git a/packages/next/package.json b/packages/next/package.json
index 80f66688..f3690faa 100644
--- a/packages/next/package.json
+++ b/packages/next/package.json
@@ -48,6 +48,8 @@
     "@babel/runtime": "7.1.2",
     "@babel/runtime-corejs2": "7.1.2",
     "@babel/template": "7.1.2",
+    "@types/node-fetch": "2.1.4",
+    "@types/rimraf": "2.0.2",
     "ansi-html": "0.0.7",
     "arg": "3.0.0",
     "async-sema": "^2.1.4",
@@ -108,6 +110,8 @@
     "@types/cross-spawn": "6.0.0",
     "@types/etag": "1.8.0",
     "@types/fresh": "0.5.0",
+    "@types/glob": "7.1.1",
+    "@types/mkdirp": "0.5.2",
     "@types/nanoid": "1.2.0",
     "@types/node-fetch": "2.1.4",
     "@types/webpack": "4.4.22",
diff --git a/packages/next/server/on-demand-entry-handler.js b/packages/next/server/on-demand-entry-handler.js
index d2d178dd..58168d2e 100644
--- a/packages/next/server/on-demand-entry-handler.js
+++ b/packages/next/server/on-demand-entry-handler.js
@@ -4,7 +4,8 @@ import { join } from 'path'
 import fs from 'fs'
 import promisify from '../lib/promisify'
 import globModule from 'glob'
-import {normalizePagePath, pageNotFoundError} from 'next-server/dist/server/require'
+import {pageNotFoundError} from 'next-server/dist/server/require'
+import {normalizePagePath} from 'next-server/dist/server/normalize-page-path'
 import {createEntry} from '../build/webpack/utils'
 import { ROUTE_NAME_REGEX, IS_BUNDLED_PAGE_REGEX } from 'next-server/constants'
 
diff --git a/packages/next/types/index.d.ts b/packages/next/types/index.d.ts
index 1e2bda41..5edcc518 100644
--- a/packages/next/types/index.d.ts
+++ b/packages/next/types/index.d.ts
@@ -1,6 +1,8 @@
 declare module '@babel/plugin-transform-modules-commonjs';
 declare module 'next-server/next-config';
 declare module 'next-server/constants';
+declare module 'webpack/lib/GraphHelpers';
+
 declare module 'arg' {
   function arg<T extends arg.Spec>(spec: T, options?: {argv?: string[], permissive?: boolean}): arg.Result<T>;
 
diff --git a/test/integration/serverless/components/hello.js b/test/integration/serverless/components/hello.js
new file mode 100644
index 00000000..0a350ec1
--- /dev/null
+++ b/test/integration/serverless/components/hello.js
@@ -0,0 +1 @@
+export default () => <h1>Hello!</h1>
diff --git a/test/integration/lambdas/next.config.js b/test/integration/serverless/next.config.js
similarity index 86%
rename from test/integration/lambdas/next.config.js
rename to test/integration/serverless/next.config.js
index a4676bfc..c4b675ed 100644
--- a/test/integration/lambdas/next.config.js
+++ b/test/integration/serverless/next.config.js
@@ -1,4 +1,5 @@
 module.exports = {
+  target: 'serverless',
   onDemandEntries: {
     // Make sure entries are not getting disposed.
     maxInactiveAge: 1000 * 60 * 60
diff --git a/test/integration/serverless/pages/abc.js b/test/integration/serverless/pages/abc.js
new file mode 100644
index 00000000..7d148e90
--- /dev/null
+++ b/test/integration/serverless/pages/abc.js
@@ -0,0 +1 @@
+export default () => <div>test</div>
diff --git a/test/integration/serverless/pages/dynamic-two.js b/test/integration/serverless/pages/dynamic-two.js
new file mode 100644
index 00000000..2750f3cb
--- /dev/null
+++ b/test/integration/serverless/pages/dynamic-two.js
@@ -0,0 +1,7 @@
+import dynamic from 'next/dynamic'
+
+const Hello = dynamic(() => import('../components/hello'))
+
+export default () => <div>
+  <Hello />
+</div>
diff --git a/test/integration/serverless/pages/dynamic.js b/test/integration/serverless/pages/dynamic.js
new file mode 100644
index 00000000..2750f3cb
--- /dev/null
+++ b/test/integration/serverless/pages/dynamic.js
@@ -0,0 +1,7 @@
+import dynamic from 'next/dynamic'
+
+const Hello = dynamic(() => import('../components/hello'))
+
+export default () => <div>
+  <Hello />
+</div>
diff --git a/test/integration/lambdas/pages/fetch.js b/test/integration/serverless/pages/fetch.js
similarity index 100%
rename from test/integration/lambdas/pages/fetch.js
rename to test/integration/serverless/pages/fetch.js
diff --git a/test/integration/lambdas/pages/index.js b/test/integration/serverless/pages/index.js
similarity index 100%
rename from test/integration/lambdas/pages/index.js
rename to test/integration/serverless/pages/index.js
diff --git a/test/integration/serverless/run-server.js b/test/integration/serverless/run-server.js
new file mode 100644
index 00000000..27ae48b5
--- /dev/null
+++ b/test/integration/serverless/run-server.js
@@ -0,0 +1,2 @@
+const start = require('./server')
+start(3000).then(() => console.log('http://localhost:3000'))
diff --git a/test/integration/serverless/server.js b/test/integration/serverless/server.js
new file mode 100644
index 00000000..9e9342d6
--- /dev/null
+++ b/test/integration/serverless/server.js
@@ -0,0 +1,38 @@
+const express = require('express')
+const http = require('http')
+const path = require('path')
+
+module.exports = function start (port = 0) {
+  return new Promise((resolve, reject) => {
+    const app = express()
+    const nextStaticDir = path.join(__dirname, '.next', 'static')
+    app.use('/_next/static', express.static(nextStaticDir))
+    app.get('/', (req, res) => {
+      require('./.next/serverless/pages/index.js').default(req, res)
+    })
+    app.get('/abc', (req, res) => {
+      require('./.next/serverless/pages/abc.js').default(req, res)
+    })
+    app.get('/fetch', (req, res) => {
+      require('./.next/serverless/pages/fetch.js').default(req, res)
+    })
+    app.get('/dynamic', (req, res) => {
+      require('./.next/serverless/pages/dynamic.js').default(req, res)
+    })
+    app.get('/dynamic-two', (req, res) => {
+      require('./.next/serverless/pages/dynamic-two.js').default(req, res)
+    })
+    app.get('/404', (req, res) => {
+      require('./.next/serverless/pages/_error.js').default(req, res)
+    })
+    const server = new http.Server(app)
+
+    server.listen(port, (err) => {
+      if (err) {
+        return reject(err)
+      }
+
+      resolve(server)
+    })
+  })
+}
diff --git a/test/integration/lambdas/test/index.test.js b/test/integration/serverless/test/index.test.js
similarity index 51%
rename from test/integration/lambdas/test/index.test.js
rename to test/integration/serverless/test/index.test.js
index 3fd38d6d..5e4e08ab 100644
--- a/test/integration/lambdas/test/index.test.js
+++ b/test/integration/serverless/test/index.test.js
@@ -2,34 +2,24 @@
 /* global jasmine, test */
 import { join } from 'path'
 import {
-  nextServer,
   nextBuild,
-  startApp,
   stopApp,
   renderViaHTTP
 } from 'next-test-utils'
+import startServer from '../server'
 import webdriver from 'next-webdriver'
 import fetch from 'node-fetch'
 
 const appDir = join(__dirname, '../')
 let appPort
 let server
-let app
 jasmine.DEFAULT_TIMEOUT_INTERVAL = 1000 * 60 * 5
 
-const context = {}
-
-describe('Lambdas', () => {
+describe('Serverless', () => {
   beforeAll(async () => {
     await nextBuild(appDir)
-    app = nextServer({
-      dir: join(__dirname, '../'),
-      dev: false,
-      quiet: true
-    })
-
-    server = await startApp(app)
-    context.appPort = appPort = server.address().port
+    server = await startServer()
+    appPort = server.address().port
   })
   afterAll(() => stopApp(server))
 
@@ -38,6 +28,21 @@ describe('Lambdas', () => {
     expect(html).toMatch(/Hello World/)
   })
 
+  it('should render the page with dynamic import', async () => {
+    const html = await renderViaHTTP(appPort, '/dynamic')
+    expect(html).toMatch(/Hello!/)
+  })
+
+  it('should render the page with same dynamic import', async () => {
+    const html = await renderViaHTTP(appPort, '/dynamic-two')
+    expect(html).toMatch(/Hello!/)
+  })
+
+  it('should render 404', async () => {
+    const html = await renderViaHTTP(appPort, '/404')
+    expect(html).toMatch(/This page could not be found/)
+  })
+
   it('should render correctly when importing isomorphic-unfetch', async () => {
     const url = `http://localhost:${appPort}/fetch`
     const res = await fetch(url)
@@ -59,4 +64,21 @@ describe('Lambdas', () => {
       browser.close()
     }
   })
+
+  describe('With basic usage', () => {
+    it('should allow etag header support', async () => {
+      const url = `http://localhost:${appPort}/`
+      const etag = (await fetch(url)).headers.get('ETag')
+
+      const headers = { 'If-None-Match': etag }
+      const res2 = await fetch(url, { headers })
+      expect(res2.status).toBe(304)
+    })
+
+    it('should set Content-Length header', async () => {
+      const url = `http://localhost:${appPort}`
+      const res = await fetch(url)
+      expect(res.headers.get('Content-Length')).toBeDefined()
+    })
+  })
 })
diff --git a/test/isolated/_resolvedata/invalid-target/next.config.js b/test/isolated/_resolvedata/invalid-target/next.config.js
new file mode 100644
index 00000000..5bc42d6f
--- /dev/null
+++ b/test/isolated/_resolvedata/invalid-target/next.config.js
@@ -0,0 +1,3 @@
+module.exports = {
+  target: 'nonexistent'
+}
diff --git a/test/isolated/_resolvedata/valid-target/next.config.js b/test/isolated/_resolvedata/valid-target/next.config.js
new file mode 100644
index 00000000..0fbd0e53
--- /dev/null
+++ b/test/isolated/_resolvedata/valid-target/next.config.js
@@ -0,0 +1,3 @@
+module.exports = {
+  target: 'serverless'
+}
diff --git a/test/isolated/config.test.js b/test/isolated/config.test.js
index 6d1fb190..9afa4ef2 100644
--- a/test/isolated/config.test.js
+++ b/test/isolated/config.test.js
@@ -32,4 +32,19 @@ describe('config', () => {
     const config = loadConfig(PHASE_DEVELOPMENT_SERVER, null, null)
     expect(config.webpack).toBe(null)
   })
+
+  it('Should throw when an invalid target is provided', () => {
+    try {
+      loadConfig(PHASE_DEVELOPMENT_SERVER, join(__dirname, '_resolvedata', 'invalid-target'))
+      // makes sure we don't just pass if the loadConfig passes while it should fail
+      throw new Error('failed')
+    } catch (err) {
+      expect(err.message).toMatch(/Specified target is invalid/)
+    }
+  })
+
+  it('Should pass when a valid target is provided', () => {
+    const config = loadConfig(PHASE_DEVELOPMENT_SERVER, join(__dirname, '_resolvedata', 'valid-target'))
+    expect(config.target).toBe('serverless')
+  })
 })
diff --git a/test/isolated/require-page.test.js b/test/isolated/require-page.test.js
index 09430639..87c6de75 100644
--- a/test/isolated/require-page.test.js
+++ b/test/isolated/require-page.test.js
@@ -2,7 +2,8 @@
 
 import { join } from 'path'
 import {SERVER_DIRECTORY, CLIENT_STATIC_FILES_PATH} from 'next-server/constants'
-import {requirePage, getPagePath, normalizePagePath, pageNotFoundError} from 'next-server/dist/server/require'
+import {requirePage, getPagePath, pageNotFoundError} from 'next-server/dist/server/require'
+import {normalizePagePath} from 'next-server/dist/server/normalize-page-path'
 
 const sep = '/'
 const distDir = join(__dirname, '_resolvedata')
diff --git a/test/lib/next-test-utils.js b/test/lib/next-test-utils.js
index ce0fff4a..aae2f976 100644
--- a/test/lib/next-test-utils.js
+++ b/test/lib/next-test-utils.js
@@ -126,8 +126,8 @@ export function launchApp (dir, port) {
   return runNextCommandDev([dir, '-p', port])
 }
 
-export function nextBuild (dir) {
-  return runNextCommand(['build', dir])
+export function nextBuild (dir, args = []) {
+  return runNextCommand(['build', dir, ...args])
 }
 
 export function nextExport (dir, {outdir}) {
diff --git a/yarn.lock b/yarn.lock
index 75aa9e44..ea71bccf 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -1392,16 +1392,42 @@
   dependencies:
     "@types/node" "*"
 
+"@types/events@*":
+  version "1.2.0"
+  resolved "https://registry.yarnpkg.com/@types/events/-/events-1.2.0.tgz#81a6731ce4df43619e5c8c945383b3e62a89ea86"
+  integrity sha512-KEIlhXnIutzKwRbQkGWb/I4HFqBuUykAdHgDED6xqwXJfONCjF5VoE0cXEiurh3XauygxzeDzgtXUqvLkxFzzA==
+
 "@types/fresh@0.5.0":
   version "0.5.0"
   resolved "https://registry.yarnpkg.com/@types/fresh/-/fresh-0.5.0.tgz#4d09231027d69c4369cfb01a9af5ef083d0d285f"
   integrity sha512-eGPzuyc6wZM3sSHJdF7NM2jW6B/xsB014Rqg/iDa6xY02mlfy1w/TE2sYhR8vbHxkzJOXiGo6NuIk3xk35vsgQ==
 
+"@types/glob@*", "@types/glob@7.1.1":
+  version "7.1.1"
+  resolved "https://registry.yarnpkg.com/@types/glob/-/glob-7.1.1.tgz#aa59a1c6e3fbc421e07ccd31a944c30eba521575"
+  integrity sha512-1Bh06cbWJUHMC97acuD6UMG29nMt0Aqz1vF3guLfG+kHHJhy3AyohZFFxYk2f7Q1SQIrNwvncxAE0N/9s70F2w==
+  dependencies:
+    "@types/events" "*"
+    "@types/minimatch" "*"
+    "@types/node" "*"
+
 "@types/mime@*":
   version "2.0.0"
   resolved "https://registry.yarnpkg.com/@types/mime/-/mime-2.0.0.tgz#5a7306e367c539b9f6543499de8dd519fac37a8b"
   integrity sha512-A2TAGbTFdBw9azHbpVd+/FkdW2T6msN1uct1O9bH3vTerEHKZhTXJUQXy+hNq1B0RagfU8U+KBdqiZpxjhOUQA==
 
+"@types/minimatch@*":
+  version "3.0.3"
+  resolved "https://registry.yarnpkg.com/@types/minimatch/-/minimatch-3.0.3.tgz#3dca0e3f33b200fc7d1139c0cd96c1268cadfd9d"
+  integrity sha512-tHq6qdbT9U1IRSGf14CL0pUlULksvY9OZ+5eEgl1N7t+OA3tGvNpxJCzuKQlsNgCVwbAs670L1vcVQi8j9HjnA==
+
+"@types/mkdirp@0.5.2":
+  version "0.5.2"
+  resolved "https://registry.yarnpkg.com/@types/mkdirp/-/mkdirp-0.5.2.tgz#503aacfe5cc2703d5484326b1b27efa67a339c1f"
+  integrity sha512-U5icWpv7YnZYGsN4/cmh3WD2onMY0aJIiTE6+51TwJCttdHvtCYmkBNOobHlXwrJRL0nkH9jH4kD+1FAdMN4Tg==
+  dependencies:
+    "@types/node" "*"
+
 "@types/nanoid@1.2.0":
   version "1.2.0"
   resolved "https://registry.yarnpkg.com/@types/nanoid/-/nanoid-1.2.0.tgz#c0141cfec5b4818016355389b0bd539097d872ff"
@@ -1448,6 +1474,14 @@
     "@types/prop-types" "*"
     csstype "^2.2.0"
 
+"@types/rimraf@2.0.2":
+  version "2.0.2"
+  resolved "https://registry.yarnpkg.com/@types/rimraf/-/rimraf-2.0.2.tgz#7f0fc3cf0ff0ad2a99bb723ae1764f30acaf8b6e"
+  integrity sha512-Hm/bnWq0TCy7jmjeN5bKYij9vw5GrDFWME4IuxV08278NtU/VdGbzsBohcCUJ7+QMqmUq5hpRKB39HeQWJjztQ==
+  dependencies:
+    "@types/glob" "*"
+    "@types/node" "*"
+
 "@types/send@0.14.4":
   version "0.14.4"
   resolved "https://registry.yarnpkg.com/@types/send/-/send-0.14.4.tgz#d70458b030305999db619a7b057f7105058bd0ff"