diff --git a/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.hmr.ts b/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.hmr.ts
new file mode 100644
index 000000000000..09d59cef5098
--- /dev/null
+++ b/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.hmr.ts
@@ -0,0 +1,9 @@
+// The file contents for the current environment will overwrite these during build.
+// The build system defaults to the dev environment which uses `environment.ts`, but if you do
+// `ng build --env=prod` then `environment.prod.ts` will be used instead.
+// The list of which env maps to which file can be found in `.angular-cli.json`.
+
+export const environment = {
+  production: false,<% if (hmr) { %>
+  hmr: true,<% } %>
+};
diff --git a/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.prod.ts b/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.prod.ts
index 3612073bc31c..8fc1198310c6 100644
--- a/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.prod.ts
+++ b/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.prod.ts
@@ -1,3 +1,4 @@
 export const environment = {
-  production: true
+  production: true,<% if (hmr) { %>
+  hmr: false,<% } %>
 };
diff --git a/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.ts b/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.ts
index b7f639aecac5..1d6cfc5e69ee 100644
--- a/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.ts
+++ b/packages/@angular/cli/blueprints/ng/files/__path__/environments/environment.ts
@@ -4,5 +4,6 @@
 // The list of which env maps to which file can be found in `.angular-cli.json`.
 
 export const environment = {
-  production: false
+  production: false,<% if (hmr) { %>
+  hmr: false,<% } %>
 };
diff --git a/packages/@angular/cli/blueprints/ng/files/__path__/hmr.ts b/packages/@angular/cli/blueprints/ng/files/__path__/hmr.ts
new file mode 100644
index 000000000000..544da20c17df
--- /dev/null
+++ b/packages/@angular/cli/blueprints/ng/files/__path__/hmr.ts
@@ -0,0 +1,15 @@
+import { NgModuleRef, ApplicationRef } from '@angular/core';
+import { createNewHosts } from '@angularclass/hmr';
+
+export const hmrBootstrap = (module: any, bootstrap: () => Promise<NgModuleRef<any>>) => {
+  let ngModule: NgModuleRef<any>;
+  module.hot.accept();
+  bootstrap().then(mod => ngModule = mod);
+  module.hot.dispose(() => {
+    let appRef: ApplicationRef = ngModule.injector.get(ApplicationRef);
+    let elements = appRef.components.map(c => c.location.nativeElement);
+    let makeVisible = createNewHosts(elements);
+    ngModule.destroy();
+    makeVisible();
+  });
+};
diff --git a/packages/@angular/cli/blueprints/ng/files/__path__/main.ts b/packages/@angular/cli/blueprints/ng/files/__path__/main.ts
index a9ca1caf8cee..8a28d562760c 100644
--- a/packages/@angular/cli/blueprints/ng/files/__path__/main.ts
+++ b/packages/@angular/cli/blueprints/ng/files/__path__/main.ts
@@ -4,8 +4,23 @@ import { platformBrowserDynamic } from '@angular/platform-browser-dynamic';
 import { AppModule } from './app/app.module';
 import { environment } from './environments/environment';
 
-if (environment.production) {
+<% if (hmr) { %>import { hmrBootstrap } from './hmr';
+
+<% } %>if (environment.production) {
   enableProdMode();
 }
 
-platformBrowserDynamic().bootstrapModule(AppModule);
+<% if (!hmr) { %>platformBrowserDynamic().bootstrapModule(AppModule);<% } %><% if (hmr) { %>const bootstrap = () => {
+  return platformBrowserDynamic().bootstrapModule(AppModule);
+};
+
+  if (environment.hmr) {
+    if (module[ 'hot' ]) {
+      hmrBootstrap(module, bootstrap);
+    } else {
+      console.error('HMR is not enabled for webpack-dev-server!');
+      console.log('Are you using the --hmr flag for ng serve?');
+    }
+  } else {
+    bootstrap();
+  }<% } %>
diff --git a/packages/@angular/cli/blueprints/ng/files/angular-cli.json b/packages/@angular/cli/blueprints/ng/files/angular-cli.json
index 93a828e33062..cf76e382aa43 100644
--- a/packages/@angular/cli/blueprints/ng/files/angular-cli.json
+++ b/packages/@angular/cli/blueprints/ng/files/angular-cli.json
@@ -24,7 +24,8 @@
       "scripts": [],
       "environmentSource": "environments/environment.ts",
       "environments": {
-        "dev": "environments/environment.ts",
+        "dev": "environments/environment.ts",<% if (hmr) { %>
+        "hmr": "environments/environment.hmr.ts",<% } %>
         "prod": "environments/environment.prod.ts"
       }
     }
diff --git a/packages/@angular/cli/blueprints/ng/files/package.json b/packages/@angular/cli/blueprints/ng/files/package.json
index fc2f3609964d..522a7d33059d 100644
--- a/packages/@angular/cli/blueprints/ng/files/package.json
+++ b/packages/@angular/cli/blueprints/ng/files/package.json
@@ -4,7 +4,8 @@
   "license": "MIT",
   "scripts": {
     "ng": "ng",
-    "start": "ng serve",
+    "start": "ng serve",<% if (hmr) { %>
+    "hmr": "ng serve --hmr -e=hmr",<% } %>
     "build": "ng build",
     "test": "ng test",
     "lint": "ng lint",
@@ -26,7 +27,8 @@
   },
   "devDependencies": {
     "@angular/cli": "<%= version %>",
-    "@angular/compiler-cli": "<%= ng4 ? '>=4.0.0-beta <5.0.0' : '^2.4.0' %>",
+    "@angular/compiler-cli": "<%= ng4 ? '>=4.0.0-beta <5.0.0' : '^2.4.0' %>",<% if (hmr) { %>
+    "@angularclass/hmr": "^1.2.2",<% } %>
     "@types/jasmine": "2.5.38",
     "@types/node": "~6.0.60",
     "codelyzer": "~2.0.0",
diff --git a/packages/@angular/cli/blueprints/ng/index.ts b/packages/@angular/cli/blueprints/ng/index.ts
index 4de8a42cf01d..f2b76f2c3cec 100644
--- a/packages/@angular/cli/blueprints/ng/index.ts
+++ b/packages/@angular/cli/blueprints/ng/index.ts
@@ -15,7 +15,8 @@ export default Blueprint.extend({
     { name: 'routing', type: Boolean, default: false },
     { name: 'inline-style', type: Boolean, default: false, aliases: ['is'] },
     { name: 'inline-template', type: Boolean, default: false, aliases: ['it'] },
-    { name: 'skip-git', type: Boolean, default: false, aliases: ['sg'] }
+    { name: 'skip-git', type: Boolean, default: false, aliases: ['sg'] },
+    { name: 'hmr', type: Boolean, default: false }
   ],
 
   beforeInstall: function(options: any) {
@@ -54,6 +55,7 @@ export default Blueprint.extend({
       routing: options.routing,
       inlineStyle: options.inlineStyle,
       inlineTemplate: options.inlineTemplate,
+      hmr: options.hmr,
       ng4: options.ng4,
       tests: this.tests
     };
@@ -71,6 +73,10 @@ export default Blueprint.extend({
     if (this.options && this.options.inlineStyle) {
       fileList = fileList.filter(p => p.indexOf('app.component.__styleext__') < 0);
     }
+    if (this.options && !this.options.hmr) {
+      fileList = fileList.filter(p => p.indexOf('environment.hmr.ts') < 0);
+      fileList = fileList.filter(p => p.indexOf('hmr.ts') < 0);
+    }
     if (this.options && this.options.skipGit) {
       fileList = fileList.filter(p => p.indexOf('gitignore') < 0);
     }
diff --git a/packages/@angular/cli/commands/init.ts b/packages/@angular/cli/commands/init.ts
index e8cb2979d996..9dc9fa293f90 100644
--- a/packages/@angular/cli/commands/init.ts
+++ b/packages/@angular/cli/commands/init.ts
@@ -20,7 +20,8 @@ const InitCommand: any = Command.extend({
     { name: 'prefix', type: String, default: 'app', aliases: ['p'] },
     { name: 'routing', type: Boolean, default: false },
     { name: 'inline-style', type: Boolean, default: false, aliases: ['is'] },
-    { name: 'inline-template', type: Boolean, default: false, aliases: ['it'] }
+    { name: 'inline-template', type: Boolean, default: false, aliases: ['it'] },
+    { name: 'hmr', type: Boolean, default: false }
   ],
 
   anonymousOptions: ['<glob-pattern>'],
diff --git a/packages/@angular/cli/commands/new.ts b/packages/@angular/cli/commands/new.ts
index 0fd2945821e8..78f5b4295249 100644
--- a/packages/@angular/cli/commands/new.ts
+++ b/packages/@angular/cli/commands/new.ts
@@ -119,7 +119,13 @@ const NewCommand = Command.extend({
       default: false,
       aliases: ['it'],
       description: 'Should have an inline template.'
-     }
+    },
+    {
+      name: 'hmr',
+      type: Boolean,
+      default: false,
+      description: 'Should enable hot module replacement.'
+    }
   ],
 
   isProject: function (projectPath: string) {
diff --git a/packages/@angular/cli/tasks/init.ts b/packages/@angular/cli/tasks/init.ts
index e2ba1c2c96eb..c9bd8948fce5 100644
--- a/packages/@angular/cli/tasks/init.ts
+++ b/packages/@angular/cli/tasks/init.ts
@@ -74,6 +74,7 @@ export default Task.extend({
       routing: commandOptions.routing,
       inlineStyle: commandOptions.inlineStyle,
       inlineTemplate: commandOptions.inlineTemplate,
+      hmr: commandOptions.hmr,
       ignoredUpdateFiles: ['favicon.ico'],
       ng4: commandOptions.ng4,
       skipGit: commandOptions.skipGit,
diff --git a/packages/@angular/cli/tasks/serve.ts b/packages/@angular/cli/tasks/serve.ts
index a455ef8e2afd..cbe426f1022f 100644
--- a/packages/@angular/cli/tasks/serve.ts
+++ b/packages/@angular/cli/tasks/serve.ts
@@ -64,15 +64,9 @@ export default Task.extend({
         `webpack-dev-server/client?${clientAddress}`
       ];
       if (serveTaskOptions.hmr) {
-        const webpackHmrLink = 'https://webpack.github.io/docs/hot-module-replacement.html';
         ui.writeLine(oneLine`
           ${chalk.yellow('NOTICE')} Hot Module Replacement (HMR) is enabled for the dev server.
         `);
-        ui.writeLine('  The project will still live reload when HMR is enabled,');
-        ui.writeLine('  but to take advantage of HMR additional application code is required');
-        ui.writeLine('  (not included in an Angular CLI project by default).');
-        ui.writeLine(`  See ${chalk.blue(webpackHmrLink)}`);
-        ui.writeLine('  for information on working with HMR for Webpack.');
         entryPoints.push('webpack/hot/dev-server');
         webpackConfig.plugins.push(new webpack.HotModuleReplacementPlugin());
         webpackConfig.plugins.push(new webpack.NamedModulesPlugin());