diff --git a/.eslintignore b/.eslintignore
new file mode 100644
index 000000000..d3266ca7c
--- /dev/null
+++ b/.eslintignore
@@ -0,0 +1,3 @@
+lib/*
+node_modules/*
+vendor/*
diff --git a/lib/install/config/webpacker.yml b/lib/install/config/webpacker.yml
index e62a7acd1..1d0263e0e 100644
--- a/lib/install/config/webpacker.yml
+++ b/lib/install/config/webpacker.yml
@@ -33,11 +33,18 @@ development:
   <<: *default
   compile: true
 
+  # Reference: https://webpack.js.org/configuration/dev-server/
   dev_server:
+    https: false
     host: localhost
     port: 3035
+    public: localhost:3035
     hmr: false
-    https: false
+    # Inline should be set to true if using HMR
+    inline: true
+    overlay: true
+    disable_host_check: true
+    use_local_ip: false
 
 test:
   <<: *default
diff --git a/lib/webpacker/dev_server.rb b/lib/webpacker/dev_server.rb
index cd47e061b..0492cae53 100644
--- a/lib/webpacker/dev_server.rb
+++ b/lib/webpacker/dev_server.rb
@@ -17,7 +17,12 @@ def running?
   end
 
   def hot_module_replacing?
-    fetch(:hmr)
+    case fetch(:hmr)
+    when true, "true"
+      true
+    else
+      false
+    end
   end
 
   def host
@@ -29,7 +34,12 @@ def port
   end
 
   def https?
-    fetch(:https)
+    case fetch(:https)
+    when true, "true"
+      true
+    else
+      false
+    end
   end
 
   def protocol
@@ -37,12 +47,12 @@ def protocol
   end
 
   def host_with_port
-    "#{host}:#{port}"
+    fetch(:public)
   end
 
   private
     def fetch(key)
-      config.dev_server.fetch(key, defaults[key])
+      ENV["WEBPACKER_DEV_SERVER_#{key.upcase}"] || config.dev_server.fetch(key, defaults[key])
     end
 
     def defaults
diff --git a/lib/webpacker/dev_server_runner.rb b/lib/webpacker/dev_server_runner.rb
index 6792f1b34..e893f578f 100644
--- a/lib/webpacker/dev_server_runner.rb
+++ b/lib/webpacker/dev_server_runner.rb
@@ -12,18 +12,12 @@ def run
     end
 
     private
-
       def load_config
         @config_file = File.join(@app_path, "config/webpacker.yml")
-        @default_listen_host_addr = ENV["NODE_ENV"] == "development" ? "localhost" : "0.0.0.0"
-
         dev_server = YAML.load_file(@config_file)[ENV["RAILS_ENV"]]["dev_server"]
 
-        @hostname          = args("--host") || dev_server["host"]
-        @port              = args("--port") || dev_server["port"]
-        @https             = @argv.include?("--https") || dev_server["https"]
-        @dev_server_addr   = "http#{"s" if @https}://#{@hostname}:#{@port}"
-        @listen_host_addr  = args("--listen-host") || @default_listen_host_addr
+        @hostname          = dev_server["host"]
+        @port              = dev_server["port"]
 
       rescue Errno::ENOENT, NoMethodError
         $stdout.puts "Webpack dev_server configuration not found in #{@config_file}."
@@ -32,7 +26,7 @@ def load_config
       end
 
       def detect_port!
-        server = TCPServer.new(@listen_host_addr, @port)
+        server = TCPServer.new(@hostname, @port)
         server.close
 
       rescue Errno::EADDRINUSE
@@ -41,32 +35,17 @@ def detect_port!
       end
 
       def execute_cmd
-        argv = @argv.dup
-
-        # Delete supplied host, port and listen-host CLI arguments
-        ["--host", "--port", "--listen-host"].each do |arg|
-          argv.delete(args(arg))
-          argv.delete(arg)
-        end
-
         env = { "NODE_PATH" => @node_modules_path.shellescape }
-
         cmd = [
-          "#{@node_modules_path}/.bin/webpack-dev-server", "--progress", "--color",
-          "--config", @webpack_config,
-          "--host", @listen_host_addr,
-          "--public", "#{@hostname}:#{@port}",
-          "--port", @port.to_s
-        ] + argv
+          "#{@node_modules_path}/.bin/webpack-dev-server",
+          "--progress",
+          "--color",
+          "--config", @webpack_config
+        ]
 
         Dir.chdir(@app_path) do
           exec env, *cmd
         end
       end
-
-      def args(key)
-        index = @argv.index(key)
-        index ? @argv[index + 1] : nil
-      end
   end
 end
diff --git a/package/config.js b/package/config.js
index dd9e3de7c..bac05690f 100644
--- a/package/config.js
+++ b/package/config.js
@@ -3,6 +3,23 @@ const { safeLoad } = require('js-yaml')
 const { readFileSync } = require('fs')
 
 const filePath = resolve('config', 'webpacker.yml')
-const config = safeLoad(readFileSync(filePath), 'utf8')
+const config = safeLoad(readFileSync(filePath), 'utf8')[process.env.NODE_ENV]
 
-module.exports = config[process.env.NODE_ENV]
+const isBoolean = str => /^true/.test(str) || /^false/.test(str)
+
+const fetch = key =>
+  (isBoolean(process.env[key]) ? JSON.parse(process.env[key]) : process.env[key])
+
+const devServer = (key) => {
+  const envValue = fetch(`WEBPACKER_DEV_SERVER_${key.toUpperCase().replace(/_/g, '')}`)
+  if (typeof envValue === 'undefined' || envValue === null) return config.dev_server[key]
+  return envValue
+}
+
+if (config.dev_server) {
+  Object.keys(config.dev_server).forEach((key) => {
+    config.dev_server[key] = devServer(key)
+  })
+}
+
+module.exports = config
diff --git a/package/environment.js b/package/environment.js
index 1a0dbe2a5..b8c7ca9be 100644
--- a/package/environment.js
+++ b/package/environment.js
@@ -1,9 +1,6 @@
 /* eslint global-require: 0 */
 /* eslint import/no-dynamic-require: 0 */
 
-const config = require('./config')
-const assetHost = require('./asset_host')
-
 const { basename, dirname, join, relative, resolve } = require('path')
 const { sync } = require('glob')
 const extname = require('path-complete-extname')
@@ -12,6 +9,9 @@ const webpack = require('webpack')
 const ExtractTextPlugin = require('extract-text-webpack-plugin')
 const ManifestPlugin = require('webpack-manifest-plugin')
 
+const config = require('./config')
+const assetHost = require('./asset_host')
+
 function getLoaderMap() {
   const result = new Map()
   const paths = sync(resolve(__dirname, 'loaders', '*.js'))
diff --git a/package/environments/development.js b/package/environments/development.js
index 72b007e41..ee5070a7d 100644
--- a/package/environments/development.js
+++ b/package/environments/development.js
@@ -1,13 +1,13 @@
+const webpack = require('webpack')
 const Environment = require('../environment')
-const { dev_server } = require('../config')
+const { dev_server: devServer } = require('../config')
 const assetHost = require('../asset_host')
-const webpack = require('webpack')
 
 module.exports = class extends Environment {
   constructor() {
     super()
 
-    if (dev_server.hmr) {
+    if (devServer.hmr) {
       this.plugins.set('HotModuleReplacement', new webpack.HotModuleReplacementPlugin())
       this.plugins.set('NamedModules', new webpack.NamedModulesPlugin())
     }
@@ -15,25 +15,29 @@ module.exports = class extends Environment {
 
   toWebpackConfig() {
     const result = super.toWebpackConfig()
-    if (dev_server.hmr) {
+    if (devServer.hmr) {
       result.output.filename = '[name]-[hash].js'
     }
     result.output.pathinfo = true
     result.devtool = 'cheap-eval-source-map'
     result.devServer = {
-      host: dev_server.host,
-      port: dev_server.port,
-      https: dev_server.https,
-      hot: dev_server.hmr,
-      contentBase: assetHost.path,
-      publicPath: assetHost.publicPath,
       clientLogLevel: 'none',
       compress: true,
+      disableHostCheck: devServer.disable_host_check,
+      host: devServer.host,
+      port: devServer.port,
+      https: devServer.https,
+      hot: devServer.hmr,
+      contentBase: assetHost.path,
+      inline: devServer.inline,
+      useLocalIp: devServer.use_local_ip,
+      public: devServer.public,
+      publicPath: assetHost.publicPath,
       historyApiFallback: true,
       headers: {
         'Access-Control-Allow-Origin': '*'
       },
-      overlay: true,
+      overlay: devServer.overlay,
       watchOptions: {
         ignored: /node_modules/
       },
diff --git a/package/environments/production.js b/package/environments/production.js
index 7f81c3a2a..53beda4af 100644
--- a/package/environments/production.js
+++ b/package/environments/production.js
@@ -1,6 +1,6 @@
-const Environment = require('../environment')
 const webpack = require('webpack')
 const CompressionPlugin = require('compression-webpack-plugin')
+const Environment = require('../environment')
 
 module.exports = class extends Environment {
   constructor() {
diff --git a/package/index.js b/package/index.js
index 4e46b24b0..e8b54ff2f 100644
--- a/package/index.js
+++ b/package/index.js
@@ -1,9 +1,9 @@
 /* eslint global-require: 0 */
 /* eslint import/no-dynamic-require: 0 */
 
-const Environment = require('./environment')
 const { resolve } = require('path')
 const { existsSync } = require('fs')
+const Environment = require('./environment')
 
 function createEnvironment() {
   const path = resolve(__dirname, 'environments', `${process.env.NODE_ENV}.js`)
diff --git a/package/loaders/file.js b/package/loaders/file.js
index f369d66c5..be491d640 100644
--- a/package/loaders/file.js
+++ b/package/loaders/file.js
@@ -1,6 +1,6 @@
-const config = require('../config')
-const assetHost = require('../asset_host')
 const { join } = require('path')
+const { source_path } = require('../config')
+const assetHost = require('../asset_host')
 
 module.exports = {
   test: /\.(jpg|jpeg|png|gif|svg|eot|otf|ttf|woff|woff2)$/i,
@@ -8,7 +8,7 @@ module.exports = {
     loader: 'file-loader',
     options: {
       name: '[path][name]-[hash].[ext]',
-      context: join(config.source_path),
+      context: join(source_path),
       publicPath: assetHost.publicPathWithHost
     }
   }]
diff --git a/package/loaders/style.js b/package/loaders/style.js
index 94ff46dd1..0b6abf324 100644
--- a/package/loaders/style.js
+++ b/package/loaders/style.js
@@ -1,10 +1,10 @@
 const ExtractTextPlugin = require('extract-text-webpack-plugin')
 const path = require('path')
-const config = require('../config')
+const { dev_server: devServer } = require('../config')
 
 const postcssConfigPath = path.resolve(process.cwd(), '.postcssrc.yml')
 const isProduction = process.env.NODE_ENV === 'production'
-const extractCSS = !(config.dev_server && config.dev_server.hmr)
+const extractCSS = !(devServer && devServer.hmr)
 
 const extractOptions = {
   fallback: 'style-loader',
diff --git a/package/loaders/vue.js b/package/loaders/vue.js
index aadee25e3..2d5780320 100644
--- a/package/loaders/vue.js
+++ b/package/loaders/vue.js
@@ -1,7 +1,7 @@
-const config = require('../config')
+const { dev_server: devServer } = require('../config')
 
 const isProduction = process.env.NODE_ENV === 'production'
-const extractCSS = !(config.dev_server && config.dev_server.hmr)
+const extractCSS = !(devServer && devServer.hmr)
 
 module.exports = {
   test: /\.vue(\.erb)?$/,