diff --git a/lib/webpacker/dev_server_runner.rb b/lib/webpacker/dev_server_runner.rb
index 4ad313a11..747ea6b76 100644
--- a/lib/webpacker/dev_server_runner.rb
+++ b/lib/webpacker/dev_server_runner.rb
@@ -45,15 +45,22 @@ def detect_port!
 
       def execute_cmd
         env = Webpacker::Compiler.env
-        cmd = [
-          "#{@node_modules_bin_path}/webpack-dev-server",
-          "--config", @webpack_config
-        ]
+
+        cmd = if node_modules_bin_exist?
+          ["#{@node_modules_bin_path}/webpack-dev-server"]
+        else
+          ["yarn", "webpack-dev-server"]
+        end
+        cmd += ["--config", @webpack_config]
         cmd += ["--progress", "--color"] if @pretty
 
         Dir.chdir(@app_path) do
-          exec env, *cmd
+          Kernel.exec env, *cmd
         end
       end
+
+      def node_modules_bin_exist?
+        File.exist?("#{@node_modules_bin_path}/webpack-dev-server")
+      end
   end
 end
diff --git a/lib/webpacker/webpack_runner.rb b/lib/webpacker/webpack_runner.rb
index 40ca1d882..1dd834cd3 100644
--- a/lib/webpacker/webpack_runner.rb
+++ b/lib/webpacker/webpack_runner.rb
@@ -5,11 +5,22 @@ module Webpacker
   class WebpackRunner < Webpacker::Runner
     def run
       env = Webpacker::Compiler.env
-      cmd = [ "#{@node_modules_bin_path}/webpack", "--config", @webpack_config ] + @argv
+
+      cmd = if node_modules_bin_exist?
+        ["#{@node_modules_bin_path}/webpack"]
+      else
+        ["yarn", "webpack"]
+      end
+      cmd += ["--config", @webpack_config] + @argv
 
       Dir.chdir(@app_path) do
-        exec env, *cmd
+        Kernel.exec env, *cmd
       end
     end
+
+    private
+      def node_modules_bin_exist?
+        File.exist?("#{@node_modules_bin_path}/webpack")
+      end
   end
 end
diff --git a/test/compiler_test.rb b/test/compiler_test.rb
index d4262b666..d7c1a0bd9 100644
--- a/test/compiler_test.rb
+++ b/test/compiler_test.rb
@@ -19,6 +19,8 @@ def test_custom_environment_variables
     assert Webpacker.compiler.send(:webpack_env)["FOO"] == nil
     Webpacker.compiler.env["FOO"] = "BAR"
     assert Webpacker.compiler.send(:webpack_env)["FOO"] == "BAR"
+  ensure
+    Webpacker.compiler.env = {}
   end
 
   def test_default_watched_paths
diff --git a/test/dev_server_runner_test.rb b/test/dev_server_runner_test.rb
new file mode 100644
index 000000000..8dece7c36
--- /dev/null
+++ b/test/dev_server_runner_test.rb
@@ -0,0 +1,51 @@
+require "test_helper"
+require "webpacker/dev_server_runner"
+
+class DevServerRunnerTest < Webpacker::Test
+  def setup
+    @original_node_env, ENV["NODE_ENV"] = ENV["NODE_ENV"], "development"
+    @original_rails_env, ENV["RAILS_ENV"] = ENV["RAILS_ENV"], "development"
+  end
+
+  def teardown
+    ENV["NODE_ENV"] = @original_node_env
+    ENV["RAILS_ENV"] = @original_rails_env
+  end
+
+  def test_run_cmd_via_node_modules
+    cmd = ["#{test_app_path}/node_modules/.bin/webpack-dev-server", "--config", "#{test_app_path}/config/webpack/development.js"]
+
+    verify_command(cmd, use_node_modules: true)
+  end
+
+  def test_run_cmd_via_yarn
+    cmd = ["yarn", "webpack-dev-server", "--config", "#{test_app_path}/config/webpack/development.js"]
+
+    verify_command(cmd, use_node_modules: false)
+  end
+
+  private
+    def test_app_path
+      File.expand_path("test_app", __dir__)
+    end
+
+    def verify_command(cmd, use_node_modules: true)
+      cwd = Dir.pwd
+      Dir.chdir(test_app_path)
+
+      klass = Webpacker::DevServerRunner
+      instance = klass.new([])
+      mock = Minitest::Mock.new
+      mock.expect(:call, nil, [{}, *cmd])
+
+      klass.stub(:new, instance) do
+        instance.stub(:node_modules_bin_exist?, use_node_modules) do
+          Kernel.stub(:exec, mock) { klass.run([]) }
+        end
+      end
+
+      mock.verify
+    ensure
+      Dir.chdir(cwd)
+    end
+end
diff --git a/test/test_app/config/webpack/development.js b/test/test_app/config/webpack/development.js
new file mode 100644
index 000000000..e69de29bb
diff --git a/test/webpack_runner_test.rb b/test/webpack_runner_test.rb
new file mode 100644
index 000000000..5e41c07a2
--- /dev/null
+++ b/test/webpack_runner_test.rb
@@ -0,0 +1,51 @@
+require "test_helper"
+require "webpacker/webpack_runner"
+
+class WebpackRunnerTest < Webpacker::Test
+  def setup
+    @original_node_env, ENV["NODE_ENV"] = ENV["NODE_ENV"], "development"
+    @original_rails_env, ENV["RAILS_ENV"] = ENV["RAILS_ENV"], "development"
+  end
+
+  def teardown
+    ENV["NODE_ENV"] = @original_node_env
+    ENV["RAILS_ENV"] = @original_rails_env
+  end
+
+  def test_run_cmd_via_node_modules
+    cmd = ["#{test_app_path}/node_modules/.bin/webpack", "--config", "#{test_app_path}/config/webpack/development.js"]
+
+    verify_command(cmd, use_node_modules: true)
+  end
+
+  def test_run_cmd_via_yarn
+    cmd = ["yarn", "webpack", "--config", "#{test_app_path}/config/webpack/development.js"]
+
+    verify_command(cmd, use_node_modules: false)
+  end
+
+  private
+    def test_app_path
+      File.expand_path("test_app", __dir__)
+    end
+
+    def verify_command(cmd, use_node_modules: true)
+      cwd = Dir.pwd
+      Dir.chdir(test_app_path)
+
+      klass = Webpacker::WebpackRunner
+      instance = klass.new([])
+      mock = Minitest::Mock.new
+      mock.expect(:call, nil, [{}, *cmd])
+
+      klass.stub(:new, instance) do
+        instance.stub(:node_modules_bin_exist?, use_node_modules) do
+          Kernel.stub(:exec, mock) { klass.run([]) }
+        end
+      end
+
+      mock.verify
+    ensure
+      Dir.chdir(cwd)
+    end
+end