diff --git a/packages/razzle-dev-utils/package.json b/packages/razzle-dev-utils/package.json
index adb029993..0525d74b0 100644
--- a/packages/razzle-dev-utils/package.json
+++ b/packages/razzle-dev-utils/package.json
@@ -20,6 +20,7 @@
     "chalk": "3.0.0",
     "jest-message-util": "^24.9.0",
     "react-dev-utils": "^10.2.0",
+    "resolve": "1.17.0",
     "strip-ansi": "6.0.0"
   }
 }
diff --git a/packages/razzle-dev-utils/resolveRequest.js b/packages/razzle-dev-utils/resolveRequest.js
new file mode 100644
index 000000000..f780cc1cb
--- /dev/null
+++ b/packages/razzle-dev-utils/resolveRequest.js
@@ -0,0 +1,12 @@
+const resolve = require('resolve');
+const path = require('path');
+
+function resolveRequest(req, issuer) {
+  const basedir =
+    issuer.endsWith(path.posix.sep) || issuer.endsWith(path.win32.sep)
+      ? issuer
+      : path.dirname(issuer);
+  return resolve.sync(req, { basedir });
+};
+
+module.exports = resolveRequest;
diff --git a/packages/razzle/config/createConfigAsync.js b/packages/razzle/config/createConfigAsync.js
index 6aaa2a844..8615208e3 100644
--- a/packages/razzle/config/createConfigAsync.js
+++ b/packages/razzle/config/createConfigAsync.js
@@ -19,6 +19,7 @@ const WebpackBar = require('webpackbar');
 const ManifestPlugin = require('webpack-manifest-plugin');
 const modules = require('./modules');
 const postcssLoadConfig = require('postcss-load-config');
+const resolveRequest = require('razzle-dev-utils/resolveRequest');
 const logger = require('razzle-dev-utils/logger');
 const razzlePaths = require('razzle/config/paths');
 const getCacheIdentifier = require('react-dev-utils/getCacheIdentifier');
@@ -138,6 +139,89 @@ module.exports = (
     const additionalAliases = modulesConfig.additionalAliases || {};
     const additionalIncludes = modulesConfig.additionalIncludes || [];
 
+    const nodeExternalsFunc = experimental.newExternals ?
+      (context, request, callback) => {
+
+        if ((experimental.newExternals.notExternalModules || []).indexOf(request) !== -1) {
+          return callback()
+        }
+
+        const isLocal =
+          request.startsWith('.') ||
+          // Always check for unix-style path, as webpack sometimes
+          // normalizes as posix.
+          path.posix.isAbsolute(request) ||
+          // When on Windows, we also want to check for Windows-specific
+          // absolute paths.
+          (process.platform === 'win32' && path.win32.isAbsolute(request))
+
+        // Relative requires don't need custom resolution, because they
+        // are relative to requests we've already resolved here.
+        // Absolute requires (require('/foo')) are extremely uncommon, but
+        // also have no need for customization as they're already resolved.
+        if (isLocal) {
+          return callback()
+        }
+
+        let res;
+        try {
+          res = resolveRequest(request, `${context}/`)
+        } catch (err) {
+          // If the request cannot be resolved, we need to tell webpack to
+          // "bundle" it so that webpack shows an error (that it cannot be
+          // resolved).
+          return callback();
+        }
+        // Same as above, if the request cannot be resolved we need to have
+        // webpack "bundle" it so it surfaces the not found error.
+        if (!res) {
+          return callback()
+        }
+        // This means we need to make sure its request resolves to the same
+         // package that'll be available at runtime. If it's not identical,
+         // we need to bundle the code (even if it _should_ be external).
+         let baseRes = null;
+         try {
+           baseRes = resolveRequest(request, `${paths.appPath}/`)
+         } catch (err) {
+           baseRes = null
+         }
+
+         // Same as above: if the package, when required from the root,
+         // would be different from what the real resolution would use, we
+         // cannot externalize it.
+         if (baseRes !== res) {
+           return callback()
+         }
+         // Anything else that is standard JavaScript within `node_modules`
+         // can be externalized.
+         if (res.match(/node_modules[/\\].*\.js$/)) {
+           const externalRequest =
+           path.posix.join(
+             paths.appPath,
+             path
+             .relative(
+               paths.appPath,
+               res
+             )
+             // Windows path normalization
+             .replace(/\\/g, '/')
+           )
+           return callback(undefined, `commonjs ${externalRequest}`)
+         }
+
+         // Default behavior: bundle the code!
+         return callback()
+      } : nodeExternals({
+        whitelist: [
+          IS_DEV ? 'webpack/hot/poll?300' : null,
+          /\.(eot|woff|woff2|ttf|otf)$/,
+          /\.(svg|png|jpg|jpeg|gif|ico)$/,
+          /\.(mp4|mp3|ogg|swf|webp)$/,
+          /\.(css|scss|sass|sss|less)$/,
+        ].filter(x => x),
+      });
+
     // This is our base webpack config.
     let config = {
       // Set webpack mode:
@@ -296,17 +380,7 @@ module.exports = (
       };
 
       // We need to tell webpack what to bundle into our Node bundle.
-      config.externals = [
-        nodeExternals({
-          whitelist: [
-            IS_DEV ? 'webpack/hot/poll?300' : null,
-            /\.(eot|woff|woff2|ttf|otf)$/,
-            /\.(svg|png|jpg|jpeg|gif|ico)$/,
-            /\.(mp4|mp3|ogg|swf|webp)$/,
-            /\.(css|scss|sass|sss|less)$/,
-          ].filter(x => x),
-        }),
-      ];
+      config.externals = [nodeExternalsFunc];
 
       // Specify webpack Node.js output path and filename
       config.output = {
diff --git a/yarn.lock b/yarn.lock
index f9f6d27a3..94d129bd9 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -14926,7 +14926,7 @@ resolve@1.1.7:
   resolved "https://registry.yarnpkg.com/resolve/-/resolve-1.1.7.tgz#203114d82ad2c5ed9e8e0411b3932875e889e97b"
   integrity sha1-IDEU2CrSxe2ejgQRs5ModeiJ6Xs=
 
-resolve@^1.1.6, resolve@^1.10.0, resolve@^1.12.0, resolve@^1.13.1, resolve@^1.15.1, resolve@^1.17.0, resolve@^1.3.2, resolve@^1.8.1:
+resolve@1.17.0, resolve@^1.1.6, resolve@^1.10.0, resolve@^1.12.0, resolve@^1.13.1, resolve@^1.15.1, resolve@^1.17.0, resolve@^1.3.2, resolve@^1.8.1:
   version "1.17.0"
   resolved "https://registry.yarnpkg.com/resolve/-/resolve-1.17.0.tgz#b25941b54968231cc2d1bb76a79cb7f2c0bf8444"
   integrity sha512-ic+7JYiV8Vi2yzQGFWOkiZD5Z9z7O2Zhm9XMaTxdJExKasieFCr+yXZ/WmXsckHiKl12ar0y6XiXDx3m4RHn1w==