diff --git a/packages/@aws-cdk/aws-lambda-nodejs/README.md b/packages/@aws-cdk/aws-lambda-nodejs/README.md
index 094b206eba5d4..48cfc6407e7a4 100644
--- a/packages/@aws-cdk/aws-lambda-nodejs/README.md
+++ b/packages/@aws-cdk/aws-lambda-nodejs/README.md
@@ -104,21 +104,21 @@ same version will be used for installation. If a lock file is detected (`package
 `yarn.lock`) it will be used along with the right installer (`npm` or `yarn`).
 
 ### Local bundling
-If Parcel v2 is available it will be used to bundle your code in your environment. Otherwise,
+If Parcel v2.0.0-beta.1 is available it will be used to bundle your code in your environment. Otherwise,
 bundling will happen in a [Lambda compatible Docker container](https://hub.docker.com/r/amazon/aws-sam-cli-build-image-nodejs12.x).
 
 For macOS the recommendend approach is to install Parcel as Docker volume performance is really poor.
 
-Parcel v2 can be installed with:
+Parcel v2.0.0-beta.1 can be installed with:
 
 ```bash
-$ npm install --save-dev parcel@next
+$ npm install --save-dev --save-exact parcel@2.0.0-beta.1
 ```
 
 OR
 
 ```bash
-$ yarn add --dev @parcel@next
+$ yarn add --dev --exact parcel@2.0.0-beta.1
 ```
 
 To force bundling in a Docker container, set the `forceDockerBundling` prop to `true`. This
diff --git a/packages/@aws-cdk/aws-lambda-nodejs/lib/bundlers.ts b/packages/@aws-cdk/aws-lambda-nodejs/lib/bundlers.ts
index 60ea23305f527..51319927f70be 100644
--- a/packages/@aws-cdk/aws-lambda-nodejs/lib/bundlers.ts
+++ b/packages/@aws-cdk/aws-lambda-nodejs/lib/bundlers.ts
@@ -5,6 +5,8 @@ import { Runtime } from '@aws-cdk/aws-lambda';
 import * as cdk from '@aws-cdk/core';
 import { exec } from './util';
 
+const PARCEL_VERSION = '2.0.0-beta.1';
+
 interface BundlerProps {
   relativeEntryPath: string;
   cacheDir?: string;
@@ -31,14 +33,18 @@ export class LocalBundler implements cdk.ILocalBundling {
     }
     try {
       const parcel = spawnSync(require.resolve('parcel'), ['--version']);
-      LocalBundler._runsLocally = /^2/.test(parcel.stdout.toString().trim()); // Cache result to avoid unnecessary spawns
+      const version = parcel.stdout.toString().trim();
+      LocalBundler._runsLocally = new RegExp(`^${PARCEL_VERSION}`).test(version); // Cache result to avoid unnecessary spawns
+      if (!LocalBundler._runsLocally) {
+        process.stderr.write(`Incorrect parcel version detected: ${version} <> ${PARCEL_VERSION}. Switching to Docker bundling.\n`);
+      }
       return LocalBundler._runsLocally;
     } catch {
       return false;
     }
   }
 
-  private static _runsLocally?: boolean;
+  public static _runsLocally?: boolean; // public for testing purposes
 
   constructor(private readonly props: LocalBundlerProps) {}
 
@@ -89,7 +95,7 @@ export class DockerBundler {
         buildArgs: {
           ...props.buildArgs ?? {},
           IMAGE: props.runtime.bundlingDockerImage.image,
-          PARCEL_VERSION: props.parcelVersion ?? '2.0.0-beta.1',
+          PARCEL_VERSION: props.parcelVersion ?? PARCEL_VERSION,
         },
       })
       : cdk.BundlingDockerImage.fromRegistry('dummy'); // Do not build if we don't need to
diff --git a/packages/@aws-cdk/aws-lambda-nodejs/test/bundling.test.ts b/packages/@aws-cdk/aws-lambda-nodejs/test/bundling.test.ts
index 0d7755fbed9e9..064834e6204a0 100644
--- a/packages/@aws-cdk/aws-lambda-nodejs/test/bundling.test.ts
+++ b/packages/@aws-cdk/aws-lambda-nodejs/test/bundling.test.ts
@@ -248,3 +248,36 @@ test('Local bundling', () => {
   // Docker image is not built
   expect(fromAssetMock).not.toHaveBeenCalled();
 });
+
+test('LocalBundler.runsLocally checks parcel version and caches results', () => {
+  LocalBundler._runsLocally = undefined;
+
+  const spawnSyncMock = jest.spyOn(child_process, 'spawnSync').mockReturnValue({
+    status: 0,
+    stderr: Buffer.from('stderr'),
+    stdout: Buffer.from('2.0.0-beta.1'),
+    pid: 123,
+    output: ['stdout', 'stderr'],
+    signal: null,
+  });
+
+  expect(LocalBundler.runsLocally).toBe(true);
+  expect(LocalBundler.runsLocally).toBe(true);
+  expect(spawnSyncMock).toHaveBeenCalledTimes(1);
+  expect(spawnSyncMock).toHaveBeenCalledWith(expect.stringContaining('parcel'), ['--version']);
+});
+
+test('LocalBundler.runsLocally with incorrect parcel version', () => {
+  LocalBundler._runsLocally = undefined;
+
+  jest.spyOn(child_process, 'spawnSync').mockReturnValue({
+    status: 0,
+    stderr: Buffer.from('stderr'),
+    stdout: Buffer.from('3.5.1'),
+    pid: 123,
+    output: ['stdout', 'stderr'],
+    signal: null,
+  });
+
+  expect(LocalBundler.runsLocally).toBe(false);
+});