diff --git a/.eslintignore b/.eslintignore
index cc151edb48..b3d6172497 100644
--- a/.eslintignore
+++ b/.eslintignore
@@ -8,4 +8,5 @@ packages/runtime/lib
 packages/runtime/dist-types
 jestSetup.js
 test/e2e
-test/fixtures/broken_next_config/next.config.js
\ No newline at end of file
+test/fixtures/broken_next_config/next.config.js
+test/integration/fixtures
diff --git a/.eslintrc.js b/.eslintrc.js
index 1510231221..94cbdcf921 100644
--- a/.eslintrc.js
+++ b/.eslintrc.js
@@ -48,6 +48,9 @@ module.exports = {
         'n/no-unsupported-features/es-syntax': 'off',
         '@typescript-eslint/no-extra-semi': 'off',
         'n/no-missing-import': 'off',
+        // https://github.com/typescript-eslint/typescript-eslint/issues/2483
+        'no-shadow': 'off',
+        '@typescript-eslint/no-shadow': 'error',
       },
     },
     {
@@ -74,12 +77,18 @@ module.exports = {
         'unicorn/no-await-expression-member': 0,
         'import/no-anonymous-default-export': 0,
         'no-shadow': 0,
+        '@typescript-eslint/no-shadow': 0,
         '@typescript-eslint/no-var-requires': 0,
         'require-await': 0,
+        'n/no-sync': 0,
+        'promise/prefer-await-to-then': 0,
+        'no-async-promise-executor': 0,
+        'import/no-dynamic-require': 0,
         // esling-plugin-jest specific rules
         'jest/consistent-test-it': ['error', { fn: 'it', withinDescribe: 'it' }],
         'jest/no-disabled-tests': 0,
         'jest/no-conditional-expect': 0,
+        'jest/no-standalone-expect': [2, { additionalTestBlockFunctions: ['beforeAll'] }],
       },
     },
   ],
diff --git a/.github/workflows/test-integration.yml b/.github/workflows/test-integration.yml
new file mode 100644
index 0000000000..9e662d6a67
--- /dev/null
+++ b/.github/workflows/test-integration.yml
@@ -0,0 +1,29 @@
+name: Next Runtime Integration Tests
+
+on:
+  pull_request:
+  push:
+    branches: [main]
+
+concurrency:
+  group: ${{ github.head_ref || github.run_id }}
+  cancel-in-progress: true
+
+jobs:
+  build:
+    name: Integration tests
+    runs-on: ubuntu-latest
+
+    steps:
+      - uses: actions/checkout@v2
+      - name: Installing with LTS Node.js
+        uses: actions/setup-node@v2
+        with:
+          node-version: 18
+          check-latest: true
+      - name: Install netlify-cli and npm
+        run: npm install -g netlify-cli npm
+      - name: NPM Install
+        run: npm install
+      - name: Run integration tests
+        run: npm run test:integration
diff --git a/package-lock.json b/package-lock.json
index 8ec7c12319..39ec7f1086 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -55,6 +55,7 @@
         "jest-junit": "^14.0.1",
         "mock-fs": "^5.2.0",
         "netlify-plugin-cypress": "^2.2.1",
+        "node-fetch": "^2.6.6",
         "npm-run-all": "^4.1.5",
         "outdent": "^0.8.0",
         "pathe": "^1.1.0",
@@ -66,7 +67,8 @@
         "sass": "^1.49.0",
         "sharp": "^0.30.4",
         "tmp-promise": "^3.0.2",
-        "typescript": "^4.3.4"
+        "typescript": "^4.3.4",
+        "wait-on": "^7.0.1"
       },
       "engines": {
         "node": ">=16.0.0"
@@ -2708,6 +2710,21 @@
         "url": "https://github.com/sponsors/sindresorhus"
       }
     },
+    "node_modules/@hapi/hoek": {
+      "version": "9.3.0",
+      "resolved": "https://registry.npmjs.org/@hapi/hoek/-/hoek-9.3.0.tgz",
+      "integrity": "sha512-/c6rf4UJlmHlC9b5BaNvzAcFv7HZ2QHaV0D4/HNlBdvFnvQq8RI4kYdhyPCl7Xj+oWvTWQ8ujhqS53LIgAe6KQ==",
+      "dev": true
+    },
+    "node_modules/@hapi/topo": {
+      "version": "5.1.0",
+      "resolved": "https://registry.npmjs.org/@hapi/topo/-/topo-5.1.0.tgz",
+      "integrity": "sha512-foQZKJig7Ob0BMAYBfcJk8d77QtOe7Wo4ox7ff1lQYoNNAb6jwcY1ncdoy2e9wQZzvNy7ODZCYJkK8kzmcAnAg==",
+      "dev": true,
+      "dependencies": {
+        "@hapi/hoek": "^9.0.0"
+      }
+    },
     "node_modules/@humanwhocodes/config-array": {
       "version": "0.11.7",
       "resolved": "https://registry.npmjs.org/@humanwhocodes/config-array/-/config-array-0.11.7.tgz",
@@ -5662,6 +5679,27 @@
         "node": ">= 8.0.0"
       }
     },
+    "node_modules/@sideway/address": {
+      "version": "4.1.4",
+      "resolved": "https://registry.npmjs.org/@sideway/address/-/address-4.1.4.tgz",
+      "integrity": "sha512-7vwq+rOHVWjyXxVlR76Agnvhy8I9rpzjosTESvmhNeXOXdZZB15Fl+TI9x1SiHZH5Jv2wTGduSxFDIaq0m3DUw==",
+      "dev": true,
+      "dependencies": {
+        "@hapi/hoek": "^9.0.0"
+      }
+    },
+    "node_modules/@sideway/formula": {
+      "version": "3.0.1",
+      "resolved": "https://registry.npmjs.org/@sideway/formula/-/formula-3.0.1.tgz",
+      "integrity": "sha512-/poHZJJVjx3L+zVD6g9KgHfYnb443oi7wLu/XKojDviHy6HOEOA6z1Trk5aR1dGcmPenJEgb2sK2I80LeS3MIg==",
+      "dev": true
+    },
+    "node_modules/@sideway/pinpoint": {
+      "version": "2.0.0",
+      "resolved": "https://registry.npmjs.org/@sideway/pinpoint/-/pinpoint-2.0.0.tgz",
+      "integrity": "sha512-RNiOoTPkptFtSVzQevY/yWtZwf/RxyVnPy/OcA9HBM3MlGDnBEYL5B41H0MTn0Uec8Hi+2qUtTfG2WWZBmMejQ==",
+      "dev": true
+    },
     "node_modules/@sinclair/typebox": {
       "version": "0.25.24",
       "resolved": "https://registry.npmjs.org/@sinclair/typebox/-/typebox-0.25.24.tgz",
@@ -7124,6 +7162,30 @@
         "node": ">=4"
       }
     },
+    "node_modules/axios": {
+      "version": "0.27.2",
+      "resolved": "https://registry.npmjs.org/axios/-/axios-0.27.2.tgz",
+      "integrity": "sha512-t+yRIyySRTp/wua5xEr+z1q60QmLq8ABsS5O9Me1AsE5dfKqgnCFzwiCZZ/cGNd1lq4/7akDWMxdhVlucjmnOQ==",
+      "dev": true,
+      "dependencies": {
+        "follow-redirects": "^1.14.9",
+        "form-data": "^4.0.0"
+      }
+    },
+    "node_modules/axios/node_modules/form-data": {
+      "version": "4.0.0",
+      "resolved": "https://registry.npmjs.org/form-data/-/form-data-4.0.0.tgz",
+      "integrity": "sha512-ETEklSGi5t0QMZuiXoA/Q6vcnxcLQP5vdugSpuAyi6SVGi2clPPp+xgEhuMaHC+zGgn31Kd235W35f7Hykkaww==",
+      "dev": true,
+      "dependencies": {
+        "asynckit": "^0.4.0",
+        "combined-stream": "^1.0.8",
+        "mime-types": "^2.1.12"
+      },
+      "engines": {
+        "node": ">= 6"
+      }
+    },
     "node_modules/axobject-query": {
       "version": "2.2.0",
       "resolved": "https://registry.npmjs.org/axobject-query/-/axobject-query-2.2.0.tgz",
@@ -16194,6 +16256,19 @@
         "url": "https://github.com/chalk/supports-color?sponsor=1"
       }
     },
+    "node_modules/joi": {
+      "version": "17.9.2",
+      "resolved": "https://registry.npmjs.org/joi/-/joi-17.9.2.tgz",
+      "integrity": "sha512-Itk/r+V4Dx0V3c7RLFdRh12IOjySm2/WGPMubBT92cQvRfYZhPM2W0hZlctjj72iES8jsRCwp7S/cRmWBnJ4nw==",
+      "dev": true,
+      "dependencies": {
+        "@hapi/hoek": "^9.0.0",
+        "@hapi/topo": "^5.0.0",
+        "@sideway/address": "^4.1.3",
+        "@sideway/formula": "^3.0.1",
+        "@sideway/pinpoint": "^2.0.0"
+      }
+    },
     "node_modules/jose": {
       "version": "4.13.1",
       "resolved": "https://registry.npmjs.org/jose/-/jose-4.13.1.tgz",
@@ -21375,9 +21450,9 @@
       }
     },
     "node_modules/rxjs": {
-      "version": "7.5.7",
-      "resolved": "https://registry.npmjs.org/rxjs/-/rxjs-7.5.7.tgz",
-      "integrity": "sha512-z9MzKh/UcOqB3i20H6rtrlaE/CgjLOvheWK/9ILrbhROGTweAi1BaFsTT9FbwZi5Trr1qNRs+MXkhmR06awzQA==",
+      "version": "7.8.0",
+      "resolved": "https://registry.npmjs.org/rxjs/-/rxjs-7.8.0.tgz",
+      "integrity": "sha512-F2+gxDshqmIub1KdvZkaEfGDwLNpPvk9Fs6LD/MyQxNgMds/WH9OdDDXOmxUZpME+iSK3rQCctkL0DYyytUqMg==",
       "dev": true,
       "dependencies": {
         "tslib": "^2.1.0"
@@ -23844,6 +23919,25 @@
         "node": ">=10"
       }
     },
+    "node_modules/wait-on": {
+      "version": "7.0.1",
+      "resolved": "https://registry.npmjs.org/wait-on/-/wait-on-7.0.1.tgz",
+      "integrity": "sha512-9AnJE9qTjRQOlTZIldAaf/da2eW0eSRSgcqq85mXQja/DW3MriHxkpODDSUEg+Gri/rKEcXUZHe+cevvYItaog==",
+      "dev": true,
+      "dependencies": {
+        "axios": "^0.27.2",
+        "joi": "^17.7.0",
+        "lodash": "^4.17.21",
+        "minimist": "^1.2.7",
+        "rxjs": "^7.8.0"
+      },
+      "bin": {
+        "wait-on": "bin/wait-on"
+      },
+      "engines": {
+        "node": ">=12.0.0"
+      }
+    },
     "node_modules/walk-back": {
       "version": "4.0.0",
       "resolved": "https://registry.npmjs.org/walk-back/-/walk-back-4.0.0.tgz",
@@ -26229,6 +26323,21 @@
         }
       }
     },
+    "@hapi/hoek": {
+      "version": "9.3.0",
+      "resolved": "https://registry.npmjs.org/@hapi/hoek/-/hoek-9.3.0.tgz",
+      "integrity": "sha512-/c6rf4UJlmHlC9b5BaNvzAcFv7HZ2QHaV0D4/HNlBdvFnvQq8RI4kYdhyPCl7Xj+oWvTWQ8ujhqS53LIgAe6KQ==",
+      "dev": true
+    },
+    "@hapi/topo": {
+      "version": "5.1.0",
+      "resolved": "https://registry.npmjs.org/@hapi/topo/-/topo-5.1.0.tgz",
+      "integrity": "sha512-foQZKJig7Ob0BMAYBfcJk8d77QtOe7Wo4ox7ff1lQYoNNAb6jwcY1ncdoy2e9wQZzvNy7ODZCYJkK8kzmcAnAg==",
+      "dev": true,
+      "requires": {
+        "@hapi/hoek": "^9.0.0"
+      }
+    },
     "@humanwhocodes/config-array": {
       "version": "0.11.7",
       "resolved": "https://registry.npmjs.org/@humanwhocodes/config-array/-/config-array-0.11.7.tgz",
@@ -28282,6 +28391,27 @@
         "string.prototype.codepointat": "^0.2.1"
       }
     },
+    "@sideway/address": {
+      "version": "4.1.4",
+      "resolved": "https://registry.npmjs.org/@sideway/address/-/address-4.1.4.tgz",
+      "integrity": "sha512-7vwq+rOHVWjyXxVlR76Agnvhy8I9rpzjosTESvmhNeXOXdZZB15Fl+TI9x1SiHZH5Jv2wTGduSxFDIaq0m3DUw==",
+      "dev": true,
+      "requires": {
+        "@hapi/hoek": "^9.0.0"
+      }
+    },
+    "@sideway/formula": {
+      "version": "3.0.1",
+      "resolved": "https://registry.npmjs.org/@sideway/formula/-/formula-3.0.1.tgz",
+      "integrity": "sha512-/poHZJJVjx3L+zVD6g9KgHfYnb443oi7wLu/XKojDviHy6HOEOA6z1Trk5aR1dGcmPenJEgb2sK2I80LeS3MIg==",
+      "dev": true
+    },
+    "@sideway/pinpoint": {
+      "version": "2.0.0",
+      "resolved": "https://registry.npmjs.org/@sideway/pinpoint/-/pinpoint-2.0.0.tgz",
+      "integrity": "sha512-RNiOoTPkptFtSVzQevY/yWtZwf/RxyVnPy/OcA9HBM3MlGDnBEYL5B41H0MTn0Uec8Hi+2qUtTfG2WWZBmMejQ==",
+      "dev": true
+    },
     "@sinclair/typebox": {
       "version": "0.25.24",
       "resolved": "https://registry.npmjs.org/@sinclair/typebox/-/typebox-0.25.24.tgz",
@@ -29421,6 +29551,29 @@
       "integrity": "sha512-u2MVsXfew5HBvjsczCv+xlwdNnB1oQR9HlAcsejZttNjKKSkeDNVwB1vMThIUIFI9GoT57Vtk8iQLwqOfAkboA==",
       "dev": true
     },
+    "axios": {
+      "version": "0.27.2",
+      "resolved": "https://registry.npmjs.org/axios/-/axios-0.27.2.tgz",
+      "integrity": "sha512-t+yRIyySRTp/wua5xEr+z1q60QmLq8ABsS5O9Me1AsE5dfKqgnCFzwiCZZ/cGNd1lq4/7akDWMxdhVlucjmnOQ==",
+      "dev": true,
+      "requires": {
+        "follow-redirects": "^1.14.9",
+        "form-data": "^4.0.0"
+      },
+      "dependencies": {
+        "form-data": {
+          "version": "4.0.0",
+          "resolved": "https://registry.npmjs.org/form-data/-/form-data-4.0.0.tgz",
+          "integrity": "sha512-ETEklSGi5t0QMZuiXoA/Q6vcnxcLQP5vdugSpuAyi6SVGi2clPPp+xgEhuMaHC+zGgn31Kd235W35f7Hykkaww==",
+          "dev": true,
+          "requires": {
+            "asynckit": "^0.4.0",
+            "combined-stream": "^1.0.8",
+            "mime-types": "^2.1.12"
+          }
+        }
+      }
+    },
     "axobject-query": {
       "version": "2.2.0",
       "resolved": "https://registry.npmjs.org/axobject-query/-/axobject-query-2.2.0.tgz",
@@ -36263,6 +36416,19 @@
         }
       }
     },
+    "joi": {
+      "version": "17.9.2",
+      "resolved": "https://registry.npmjs.org/joi/-/joi-17.9.2.tgz",
+      "integrity": "sha512-Itk/r+V4Dx0V3c7RLFdRh12IOjySm2/WGPMubBT92cQvRfYZhPM2W0hZlctjj72iES8jsRCwp7S/cRmWBnJ4nw==",
+      "dev": true,
+      "requires": {
+        "@hapi/hoek": "^9.0.0",
+        "@hapi/topo": "^5.0.0",
+        "@sideway/address": "^4.1.3",
+        "@sideway/formula": "^3.0.1",
+        "@sideway/pinpoint": "^2.0.0"
+      }
+    },
     "jose": {
       "version": "4.13.1",
       "resolved": "https://registry.npmjs.org/jose/-/jose-4.13.1.tgz",
@@ -40203,9 +40369,9 @@
       }
     },
     "rxjs": {
-      "version": "7.5.7",
-      "resolved": "https://registry.npmjs.org/rxjs/-/rxjs-7.5.7.tgz",
-      "integrity": "sha512-z9MzKh/UcOqB3i20H6rtrlaE/CgjLOvheWK/9ILrbhROGTweAi1BaFsTT9FbwZi5Trr1qNRs+MXkhmR06awzQA==",
+      "version": "7.8.0",
+      "resolved": "https://registry.npmjs.org/rxjs/-/rxjs-7.8.0.tgz",
+      "integrity": "sha512-F2+gxDshqmIub1KdvZkaEfGDwLNpPvk9Fs6LD/MyQxNgMds/WH9OdDDXOmxUZpME+iSK3rQCctkL0DYyytUqMg==",
       "dev": true,
       "requires": {
         "tslib": "^2.1.0"
@@ -42132,6 +42298,19 @@
         "xml-name-validator": "^3.0.0"
       }
     },
+    "wait-on": {
+      "version": "7.0.1",
+      "resolved": "https://registry.npmjs.org/wait-on/-/wait-on-7.0.1.tgz",
+      "integrity": "sha512-9AnJE9qTjRQOlTZIldAaf/da2eW0eSRSgcqq85mXQja/DW3MriHxkpODDSUEg+Gri/rKEcXUZHe+cevvYItaog==",
+      "dev": true,
+      "requires": {
+        "axios": "^0.27.2",
+        "joi": "^17.7.0",
+        "lodash": "^4.17.21",
+        "minimist": "^1.2.7",
+        "rxjs": "^7.8.0"
+      }
+    },
     "walk-back": {
       "version": "4.0.0",
       "resolved": "https://registry.npmjs.org/walk-back/-/walk-back-4.0.0.tgz",
diff --git a/package.json b/package.json
index 4c897c6b23..9c1720c24e 100644
--- a/package.json
+++ b/package.json
@@ -24,6 +24,7 @@
     "test:next:all": "RUN_SKIPPED_TESTS=1 jest -c test/e2e/jest.config.all.js",
     "test:next:appdir": "jest -c test/e2e/jest.config.appdir.js",
     "test:jest": "jest",
+    "test:integration": "jest -c test/integration/jest.config.js",
     "playwright:install": "playwright install --with-deps chromium",
     "test:jest:update": "jest --updateSnapshot",
     "test:update": "run-s build build:demo test:jest:update"
@@ -79,6 +80,7 @@
     "jest-junit": "^14.0.1",
     "mock-fs": "^5.2.0",
     "netlify-plugin-cypress": "^2.2.1",
+    "node-fetch": "^2.6.6",
     "npm-run-all": "^4.1.5",
     "outdent": "^0.8.0",
     "pathe": "^1.1.0",
@@ -90,7 +92,8 @@
     "sass": "^1.49.0",
     "sharp": "^0.30.4",
     "tmp-promise": "^3.0.2",
-    "typescript": "^4.3.4"
+    "typescript": "^4.3.4",
+    "wait-on": "^7.0.1"
   },
   "dependencies": {
     "next": "^13.3.0"
@@ -106,6 +109,7 @@
       "**/test/**/*.spec.js",
       "**/test/**/*.spec.ts",
       "!**/test/e2e/**",
+      "!**/test/integration/**",
       "!**/test/fixtures/**",
       "!**/test/sample/**",
       "!**/test/templates/edge-shared/**"
diff --git a/packages/runtime/src/helpers/analysis.ts b/packages/runtime/src/helpers/analysis.ts
index 2dd1abad18..71cc417caa 100644
--- a/packages/runtime/src/helpers/analysis.ts
+++ b/packages/runtime/src/helpers/analysis.ts
@@ -2,12 +2,8 @@ import fs, { existsSync } from 'fs'
 
 import { relative } from 'pathe'
 
-// I have no idea what eslint is up to here but it gives an error
-// eslint-disable-next-line no-shadow
-export const enum ApiRouteType {
-  SCHEDULED = 'experimental-scheduled',
-  BACKGROUND = 'experimental-background',
-}
+import { ApiRouteType } from './types'
+import { findModuleFromBase } from './utils'
 
 export interface ApiStandardConfig {
   type?: never
@@ -87,29 +83,37 @@ let hasWarnedAboutNextVersion = false
 /**
  * Uses Next's swc static analysis to extract the config values from a file.
  */
-export const extractConfigFromFile = async (apiFilePath: string): Promise<ApiConfig> => {
+export const extractConfigFromFile = async (apiFilePath: string, appDir: string): Promise<ApiConfig> => {
   if (!apiFilePath || !existsSync(apiFilePath)) {
     return {}
   }
 
-  try {
-    if (!extractConstValue) {
-      extractConstValue = require('next/dist/build/analysis/extract-const-value')
-    }
-    if (!parseModule) {
-      // eslint-disable-next-line prefer-destructuring, @typescript-eslint/no-var-requires
-      parseModule = require('next/dist/build/analysis/parse-module').parseModule
-    }
-  } catch (error) {
-    if (error.code === 'MODULE_NOT_FOUND') {
-      if (!hasWarnedAboutNextVersion) {
-        console.log("This version of Next.js doesn't support advanced API routes. Skipping...")
-        hasWarnedAboutNextVersion = true
-      }
-      // Old Next.js version
-      return {}
+  const extractConstValueModulePath = findModuleFromBase({
+    paths: [appDir],
+    candidates: ['next/dist/build/analysis/extract-const-value'],
+  })
+
+  const parseModulePath = findModuleFromBase({
+    paths: [appDir],
+    candidates: ['next/dist/build/analysis/parse-module'],
+  })
+
+  if (!extractConstValueModulePath || !parseModulePath) {
+    if (!hasWarnedAboutNextVersion) {
+      console.log("This version of Next.js doesn't support advanced API routes. Skipping...")
+      hasWarnedAboutNextVersion = true
     }
-    throw error
+    // Old Next.js version
+    return {}
+  }
+
+  if (!extractConstValue && extractConstValueModulePath) {
+    // eslint-disable-next-line import/no-dynamic-require
+    extractConstValue = require(extractConstValueModulePath)
+  }
+  if (!parseModule && parseModulePath) {
+    // eslint-disable-next-line prefer-destructuring, @typescript-eslint/no-var-requires, import/no-dynamic-require
+    parseModule = require(parseModulePath).parseModule
   }
 
   const { extractExportedConstValue, UnsupportedValueError } = extractConstValue
diff --git a/packages/runtime/src/helpers/files.ts b/packages/runtime/src/helpers/files.ts
index d97d614fb8..a2c7d9d47b 100644
--- a/packages/runtime/src/helpers/files.ts
+++ b/packages/runtime/src/helpers/files.ts
@@ -330,7 +330,7 @@ const patchFile = async ({
  * The file we need has moved around a bit over the past few versions,
  * so we iterate through the options until we find it
  */
-const getServerFile = (root: string, includeBase = true) => {
+export const getServerFile = (root: string, includeBase = true) => {
   const candidates = ['next/dist/server/next-server', 'next/dist/next-server/server/next-server']
 
   if (includeBase) {
diff --git a/packages/runtime/src/helpers/functions.ts b/packages/runtime/src/helpers/functions.ts
index aa2423922e..021d89a645 100644
--- a/packages/runtime/src/helpers/functions.ts
+++ b/packages/runtime/src/helpers/functions.ts
@@ -20,9 +20,10 @@ import { getApiHandler } from '../templates/getApiHandler'
 import { getHandler } from '../templates/getHandler'
 import { getResolverForPages, getResolverForSourceFiles } from '../templates/getPageResolver'
 
-import { ApiConfig, ApiRouteType, extractConfigFromFile, isEdgeConfig } from './analysis'
-import { getSourceFileForPage } from './files'
+import { ApiConfig, extractConfigFromFile, isEdgeConfig } from './analysis'
+import { getServerFile, getSourceFileForPage } from './files'
 import { writeFunctionConfiguration } from './functionsMetaData'
+import { ApiRouteType } from './types'
 import { getFunctionNameForPage } from './utils'
 
 export interface ApiRouteConfig {
@@ -41,6 +42,11 @@ export const generateFunctions = async (
   const functionDir = join(functionsDir, HANDLER_FUNCTION_NAME)
   const publishDir = relative(functionDir, publish)
 
+  const nextServerModuleAbsoluteLocation = getServerFile(appDir, false)
+  const nextServerModuleRelativeLocation = nextServerModuleAbsoluteLocation
+    ? relative(functionDir, nextServerModuleAbsoluteLocation)
+    : undefined
+
   for (const { route, config, compiled } of apiRoutes) {
     // Don't write a lambda if the runtime is edge
     if (isEdgeConfig(config.runtime)) {
@@ -51,6 +57,7 @@ export const generateFunctions = async (
       config,
       publishDir,
       appDir: relative(functionDir, appDir),
+      nextServerModuleRelativeLocation,
     })
     const functionName = getFunctionNameForPage(route, config.type === ApiRouteType.BACKGROUND)
     await ensureDir(join(functionsDir, functionName))
@@ -80,7 +87,12 @@ export const generateFunctions = async (
   }
 
   const writeHandler = async (functionName: string, functionTitle: string, isODB: boolean) => {
-    const handlerSource = await getHandler({ isODB, publishDir, appDir: relative(functionDir, appDir) })
+    const handlerSource = await getHandler({
+      isODB,
+      publishDir,
+      appDir: relative(functionDir, appDir),
+      nextServerModuleRelativeLocation,
+    })
     await ensureDir(join(functionsDir, functionName))
 
     // write main handler file (standard or ODB)
@@ -201,20 +213,20 @@ export const setupImageFunction = async ({
  */
 export const getApiRouteConfigs = async (
   publish: string,
-  baseDir: string,
+  appDir: string,
   pageExtensions: string[],
 ): Promise<Array<ApiRouteConfig>> => {
   const pages = await readJSON(join(publish, 'server', 'pages-manifest.json'))
   const apiRoutes = Object.keys(pages).filter((page) => page.startsWith('/api/'))
   // two possible places
   // Ref: https://nextjs.org/docs/advanced-features/src-directory
-  const pagesDir = join(baseDir, 'pages')
-  const srcPagesDir = join(baseDir, 'src', 'pages')
+  const pagesDir = join(appDir, 'pages')
+  const srcPagesDir = join(appDir, 'src', 'pages')
 
   return await Promise.all(
     apiRoutes.map(async (apiRoute) => {
       const filePath = getSourceFileForPage(apiRoute, [pagesDir, srcPagesDir], pageExtensions)
-      return { route: apiRoute, config: await extractConfigFromFile(filePath), compiled: pages[apiRoute] }
+      return { route: apiRoute, config: await extractConfigFromFile(filePath, appDir), compiled: pages[apiRoute] }
     }),
   )
 }
@@ -224,10 +236,10 @@ export const getApiRouteConfigs = async (
  */
 export const getExtendedApiRouteConfigs = async (
   publish: string,
-  baseDir: string,
+  appDir: string,
   pageExtensions: string[],
 ): Promise<Array<ApiRouteConfig>> => {
-  const settledApiRoutes = await getApiRouteConfigs(publish, baseDir, pageExtensions)
+  const settledApiRoutes = await getApiRouteConfigs(publish, appDir, pageExtensions)
 
   // We only want to return the API routes that are background or scheduled functions
   return settledApiRoutes.filter((apiRoute) => apiRoute.config.type !== undefined)
diff --git a/packages/runtime/src/helpers/types.ts b/packages/runtime/src/helpers/types.ts
index 1819f677b0..92cfadf5cc 100644
--- a/packages/runtime/src/helpers/types.ts
+++ b/packages/runtime/src/helpers/types.ts
@@ -51,3 +51,8 @@ export interface RoutesManifest {
   i18n: I18n
   rewrites: Rewrites
 }
+
+export const enum ApiRouteType {
+  SCHEDULED = 'experimental-scheduled',
+  BACKGROUND = 'experimental-background',
+}
diff --git a/packages/runtime/src/helpers/utils.ts b/packages/runtime/src/helpers/utils.ts
index 2022fc6b00..4a0ead00f1 100644
--- a/packages/runtime/src/helpers/utils.ts
+++ b/packages/runtime/src/helpers/utils.ts
@@ -7,9 +7,8 @@ import { join } from 'pathe'
 
 import { OPTIONAL_CATCH_ALL_REGEX, CATCH_ALL_REGEX, DYNAMIC_PARAMETER_REGEX, HANDLER_FUNCTION_PATH } from '../constants'
 
-import { ApiRouteType } from './analysis'
 import type { ApiRouteConfig } from './functions'
-import { I18n } from './types'
+import { I18n, ApiRouteType } from './types'
 
 const RESERVED_FILENAME = /[^\w_-]/g
 
@@ -268,6 +267,17 @@ export const findModuleFromBase = ({ paths, candidates }): string | null => {
       // Ignore the error
     }
   }
+  // if we couldn't find a module from paths, let's try to resolve from here
+  for (const candidate of candidates) {
+    try {
+      const modulePath = require.resolve(candidate)
+      if (modulePath) {
+        return modulePath
+      }
+    } catch {
+      // Ignore the error
+    }
+  }
   return null
 }
 
diff --git a/packages/runtime/src/templates/getApiHandler.ts b/packages/runtime/src/templates/getApiHandler.ts
index 81d40e0674..d42bf4a7fe 100644
--- a/packages/runtime/src/templates/getApiHandler.ts
+++ b/packages/runtime/src/templates/getApiHandler.ts
@@ -3,8 +3,9 @@ import type { Bridge as NodeBridge } from '@vercel/node-bridge/bridge'
 // Aliasing like this means the editor may be able to syntax-highlight the string
 import { outdent as javascript } from 'outdent'
 
-import { ApiConfig, ApiRouteType } from '../helpers/analysis'
+import { ApiConfig } from '../helpers/analysis'
 import type { NextConfig } from '../helpers/config'
+import { ApiRouteType } from '../helpers/types'
 
 import type { NextServerType } from './handlerUtils'
 
@@ -17,16 +18,23 @@ const { URLSearchParams, URL } = require('url')
 
 const { Bridge } = require('@vercel/node-bridge/bridge')
 
-const { getMultiValueHeaders, getNextServer } = require('./handlerUtils')
+const { getMultiValueHeaders } = require('./handlerUtils')
 /* eslint-enable @typescript-eslint/no-var-requires */
 
 type Mutable<T> = {
   -readonly [K in keyof T]: T[K]
 }
 
-// We return a function and then call `toString()` on it to serialise it as the launcher function
+type MakeApiHandlerParams = {
+  conf: NextConfig
+  app: string
+  pageRoot: string
+  page: string
+  NextServer: NextServerType
+}
 
-const makeHandler = (conf: NextConfig, app, pageRoot, page) => {
+// We return a function and then call `toString()` on it to serialise it as the launcher function
+const makeApiHandler = ({ conf, app, pageRoot, page, NextServer }: MakeApiHandlerParams) => {
   // Change working directory into the site root, unless using Nx, which moves the
   // dist directory and handles this itself
   const dir = path.resolve(__dirname, app)
@@ -64,7 +72,6 @@ const makeHandler = (conf: NextConfig, app, pageRoot, page) => {
     const url = event.rawUrl ? new URL(event.rawUrl) : new URL(path, process.env.URL || 'http://n')
     const port = Number.parseInt(url.port) || 80
 
-    const NextServer: NextServerType = getNextServer()
     const nextServer = new NextServer({
       conf,
       dir,
@@ -118,18 +125,25 @@ export const getApiHandler = ({
   config,
   publishDir = '../../../.next',
   appDir = '../../..',
+  nextServerModuleRelativeLocation,
 }: {
   page: string
   config: ApiConfig
   publishDir?: string
   appDir?: string
+  nextServerModuleRelativeLocation: string | undefined
 }): string =>
   // This is a string, but if you have the right editor plugin it should format as js
   javascript/* javascript */ `
+  if (!${JSON.stringify(nextServerModuleRelativeLocation)}) {
+    throw new Error('Could not find Next.js server')
+  }
+
   const { Server } = require("http");
   // We copy the file here rather than requiring from the node module
   const { Bridge } = require("./bridge");
-  const { getMultiValueHeaders, getNextServer } = require('./handlerUtils')
+  const { getMultiValueHeaders } = require('./handlerUtils')
+  const NextServer = require(${JSON.stringify(nextServerModuleRelativeLocation)}).default
 
   ${config.type === ApiRouteType.SCHEDULED ? `const { schedule } = require("@netlify/functions")` : ''}
 
@@ -138,7 +152,9 @@ export const getApiHandler = ({
   let staticManifest
   const path = require("path");
   const pageRoot = path.resolve(path.join(__dirname, "${publishDir}", "server"));
-  const handler = (${makeHandler.toString()})(config, "${appDir}", pageRoot, ${JSON.stringify(page)})
+  const handler = (${makeApiHandler.toString()})({ conf: config, app: "${appDir}", pageRoot, page:${JSON.stringify(
+    page,
+  )}, NextServer})
   exports.handler = ${
     config.type === ApiRouteType.SCHEDULED ? `schedule(${JSON.stringify(config.schedule)}, handler);` : 'handler'
   }
diff --git a/packages/runtime/src/templates/getHandler.ts b/packages/runtime/src/templates/getHandler.ts
index d8e3bdc7ca..5d7d2b5ecb 100644
--- a/packages/runtime/src/templates/getHandler.ts
+++ b/packages/runtime/src/templates/getHandler.ts
@@ -5,6 +5,9 @@ import { outdent as javascript } from 'outdent'
 
 import type { NextConfig } from '../helpers/config'
 
+import type { NextServerType } from './handlerUtils'
+import type { NetlifyNextServerType } from './server'
+
 /* eslint-disable @typescript-eslint/no-var-requires */
 const { promises } = require('fs')
 const { Server } = require('http')
@@ -21,16 +24,25 @@ const {
   getPrefetchResponse,
   normalizePath,
 } = require('./handlerUtils')
-const { NetlifyNextServer } = require('./server')
+const { getNetlifyNextServer } = require('./server')
 /* eslint-enable @typescript-eslint/no-var-requires */
 
 type Mutable<T> = {
   -readonly [K in keyof T]: T[K]
 }
 
+type MakeHandlerParams = {
+  conf: NextConfig
+  app: string
+  pageRoot: string
+  NextServer: NextServerType
+  staticManifest: Array<[string, string]>
+  mode: 'ssr' | 'odb'
+}
+
 // We return a function and then call `toString()` on it to serialise it as the launcher function
-// eslint-disable-next-line max-params, max-lines-per-function
-const makeHandler = (conf: NextConfig, app, pageRoot, staticManifest: Array<[string, string]> = [], mode = 'ssr') => {
+// eslint-disable-next-line max-lines-per-function
+const makeHandler = ({ conf, app, pageRoot, NextServer, staticManifest = [], mode = 'ssr' }: MakeHandlerParams) => {
   // Change working directory into the site root, unless using Nx, which moves the
   // dist directory and handles this itself
   const dir = path.resolve(__dirname, app)
@@ -44,6 +56,8 @@ const makeHandler = (conf: NextConfig, app, pageRoot, staticManifest: Array<[str
     require.resolve('./pages.js')
   } catch {}
 
+  const NetlifyNextServer: NetlifyNextServerType = getNetlifyNextServer(NextServer)
+
   const ONE_YEAR_IN_SECONDS = 31536000
 
   // React assumes you want development mode if NODE_ENV is unset.
@@ -104,7 +118,7 @@ const makeHandler = (conf: NextConfig, app, pageRoot, staticManifest: Array<[str
   }
 
   return async function handler(event: HandlerEvent, context: HandlerContext) {
-    let requestMode = mode
+    let requestMode: string = mode
     const prefetchResponse = getPrefetchResponse(event, mode)
     if (prefetchResponse) {
       return prefetchResponse
@@ -169,15 +183,25 @@ const makeHandler = (conf: NextConfig, app, pageRoot, staticManifest: Array<[str
   }
 }
 
-export const getHandler = ({ isODB = false, publishDir = '../../../.next', appDir = '../../..' }): string =>
+export const getHandler = ({
+  isODB = false,
+  publishDir = '../../../.next',
+  appDir = '../../..',
+  nextServerModuleRelativeLocation,
+}): string =>
   // This is a string, but if you have the right editor plugin it should format as js
   javascript/* javascript */ `
+  if (!${JSON.stringify(nextServerModuleRelativeLocation)}) {
+    throw new Error('Could not find Next.js server')
+  }
+
   const { Server } = require("http");
   const { promises } = require("fs");
   // We copy the file here rather than requiring from the node module
   const { Bridge } = require("./bridge");
-  const { augmentFsModule, getMaxAge, getMultiValueHeaders, getPrefetchResponse, getNextServer, normalizePath } = require('./handlerUtils')
-  const { NetlifyNextServer } = require('./server')
+  const { augmentFsModule, getMaxAge, getMultiValueHeaders, getPrefetchResponse, normalizePath } = require('./handlerUtils')
+  const { getNetlifyNextServer } = require('./server')
+  const NextServer = require(${JSON.stringify(nextServerModuleRelativeLocation)}).default
 
   ${isODB ? `const { builder } = require("@netlify/functions")` : ''}
   const { config }  = require("${publishDir}/required-server-files.json")
@@ -189,7 +213,7 @@ export const getHandler = ({ isODB = false, publishDir = '../../../.next', appDi
   const pageRoot = path.resolve(path.join(__dirname, "${publishDir}", "server"));
   exports.handler = ${
     isODB
-      ? `builder((${makeHandler.toString()})(config, "${appDir}", pageRoot, staticManifest, 'odb'));`
-      : `(${makeHandler.toString()})(config, "${appDir}", pageRoot, staticManifest, 'ssr');`
+      ? `builder((${makeHandler.toString()})({ conf: config, app: "${appDir}", pageRoot, NextServer, staticManifest, mode: 'odb' }));`
+      : `(${makeHandler.toString()})({ conf: config, app: "${appDir}", pageRoot, NextServer, staticManifest, mode: 'ssr' });`
   }
 `
diff --git a/packages/runtime/src/templates/handlerUtils.ts b/packages/runtime/src/templates/handlerUtils.ts
index cbb26e9d58..0d985c21a3 100644
--- a/packages/runtime/src/templates/handlerUtils.ts
+++ b/packages/runtime/src/templates/handlerUtils.ts
@@ -160,37 +160,6 @@ export const augmentFsModule = ({
   }) as typeof promises.stat
 }
 
-/**
- * Next.js has an annoying habit of needing deep imports, but then moving those in patch releases. This is our abstraction.
- */
-export const getNextServer = (): NextServerType => {
-  let NextServer: NextServerType
-  try {
-    // next >= 11.0.1. Yay breaking changes in patch releases!
-    // eslint-disable-next-line @typescript-eslint/no-var-requires
-    NextServer = require('next/dist/server/next-server').default
-  } catch (error) {
-    if (!error.message.includes("Cannot find module 'next/dist/server/next-server'")) {
-      // A different error, so rethrow it
-      throw error
-    }
-    // Probably an old version of next, so fall through and find it elsewhere.
-  }
-
-  if (!NextServer) {
-    try {
-      // next < 11.0.1
-      // eslint-disable-next-line n/no-missing-require, import/no-unresolved, @typescript-eslint/no-var-requires
-      NextServer = require('next/dist/next-server/server/next-server').default
-    } catch (error) {
-      if (!error.message.includes("Cannot find module 'next/dist/next-server/server/next-server'")) {
-        throw error
-      }
-      throw new Error('Could not find Next.js server')
-    }
-  }
-  return NextServer
-}
 /**
  * Prefetch requests are used to check for middleware redirects, and shouldn't trigger SSR.
  */
diff --git a/packages/runtime/src/templates/server.ts b/packages/runtime/src/templates/server.ts
index ad0908bc3b..7fb61661eb 100644
--- a/packages/runtime/src/templates/server.ts
+++ b/packages/runtime/src/templates/server.ts
@@ -3,7 +3,6 @@ import { NodeRequestHandler, Options } from 'next/dist/server/next-server'
 
 import {
   netlifyApiFetch,
-  getNextServer,
   NextServerType,
   normalizeRoute,
   localizeRoute,
@@ -11,94 +10,98 @@ import {
   unlocalizeRoute,
 } from './handlerUtils'
 
-const NextServer: NextServerType = getNextServer()
-
 interface NetlifyConfig {
   revalidateToken?: string
 }
 
-class NetlifyNextServer extends NextServer {
-  private netlifyConfig: NetlifyConfig
-  private netlifyPrerenderManifest: PrerenderManifest
+const getNetlifyNextServer = (NextServer: NextServerType) => {
+  class NetlifyNextServer extends NextServer {
+    private netlifyConfig: NetlifyConfig
+    private netlifyPrerenderManifest: PrerenderManifest
 
-  public constructor(options: Options, netlifyConfig: NetlifyConfig) {
-    super(options)
-    this.netlifyConfig = netlifyConfig
-    // copy the prerender manifest so it doesn't get mutated by Next.js
-    const manifest = this.getPrerenderManifest()
-    this.netlifyPrerenderManifest = {
-      ...manifest,
-      routes: { ...manifest.routes },
-      dynamicRoutes: { ...manifest.dynamicRoutes },
+    public constructor(options: Options, netlifyConfig: NetlifyConfig) {
+      super(options)
+      this.netlifyConfig = netlifyConfig
+      // copy the prerender manifest so it doesn't get mutated by Next.js
+      const manifest = this.getPrerenderManifest()
+      this.netlifyPrerenderManifest = {
+        ...manifest,
+        routes: { ...manifest.routes },
+        dynamicRoutes: { ...manifest.dynamicRoutes },
+      }
     }
-  }
 
-  public getRequestHandler(): NodeRequestHandler {
-    const handler = super.getRequestHandler()
-    return async (req, res, parsedUrl) => {
-      // preserve the URL before Next.js mutates it for i18n
-      const { url, headers } = req
-      // handle the original res.revalidate() request
-      await handler(req, res, parsedUrl)
-      // handle on-demand revalidation by purging the ODB cache
-      if (res.statusCode === 200 && headers['x-prerender-revalidate'] && this.netlifyConfig.revalidateToken) {
-        await this.netlifyRevalidate(url)
+    public getRequestHandler(): NodeRequestHandler {
+      const handler = super.getRequestHandler()
+      return async (req, res, parsedUrl) => {
+        // preserve the URL before Next.js mutates it for i18n
+        const { url, headers } = req
+        // handle the original res.revalidate() request
+        await handler(req, res, parsedUrl)
+        // handle on-demand revalidation by purging the ODB cache
+        if (res.statusCode === 200 && headers['x-prerender-revalidate'] && this.netlifyConfig.revalidateToken) {
+          await this.netlifyRevalidate(url)
+        }
       }
     }
-  }
 
-  private async netlifyRevalidate(route: string) {
-    try {
-      // call netlify API to revalidate the path
-      const result = await netlifyApiFetch<{ ok: boolean; code: number; message: string }>({
-        endpoint: `sites/${process.env.SITE_ID}/refresh_on_demand_builders`,
-        payload: {
-          paths: this.getNetlifyPathsForRoute(route),
-          domain: this.hostname,
-        },
-        token: this.netlifyConfig.revalidateToken,
-        method: 'POST',
-      })
-      if (!result.ok) {
-        throw new Error(result.message)
+    private async netlifyRevalidate(route: string) {
+      try {
+        // call netlify API to revalidate the path
+        const result = await netlifyApiFetch<{ ok: boolean; code: number; message: string }>({
+          endpoint: `sites/${process.env.SITE_ID}/refresh_on_demand_builders`,
+          payload: {
+            paths: this.getNetlifyPathsForRoute(route),
+            domain: this.hostname,
+          },
+          token: this.netlifyConfig.revalidateToken,
+          method: 'POST',
+        })
+        if (!result.ok) {
+          throw new Error(result.message)
+        }
+      } catch (error) {
+        console.log(`Error revalidating ${route}:`, error.message)
+        throw error
       }
-    } catch (error) {
-      console.log(`Error revalidating ${route}:`, error.message)
-      throw error
     }
-  }
-
-  private getNetlifyPathsForRoute(route: string): string[] {
-    const { i18n } = this.nextConfig
-    const { routes, dynamicRoutes } = this.netlifyPrerenderManifest
 
-    // matches static routes
-    const normalizedRoute = normalizeRoute(i18n ? localizeRoute(route, i18n) : route)
-    if (normalizedRoute in routes) {
-      const { dataRoute } = routes[normalizedRoute]
-      const normalizedDataRoute = i18n ? localizeDataRoute(dataRoute, normalizedRoute) : dataRoute
-      return [route, normalizedDataRoute]
-    }
+    private getNetlifyPathsForRoute(route: string): string[] {
+      const { i18n } = this.nextConfig
+      const { routes, dynamicRoutes } = this.netlifyPrerenderManifest
 
-    // matches dynamic routes
-    const unlocalizedRoute = i18n ? unlocalizeRoute(normalizedRoute, i18n) : normalizedRoute
-    for (const dynamicRoute in dynamicRoutes) {
-      const { dataRoute, routeRegex } = dynamicRoutes[dynamicRoute]
-      const matches = unlocalizedRoute.match(routeRegex)
-      if (matches && matches.length !== 0) {
-        // remove the first match, which is the full route
-        matches.shift()
-        // replace the dynamic segments with the actual values
-        const interpolatedDataRoute = dataRoute.replace(/\[(.*?)]/g, () => matches.shift())
-        const normalizedDataRoute = i18n
-          ? localizeDataRoute(interpolatedDataRoute, normalizedRoute)
-          : interpolatedDataRoute
+      // matches static routes
+      const normalizedRoute = normalizeRoute(i18n ? localizeRoute(route, i18n) : route)
+      if (normalizedRoute in routes) {
+        const { dataRoute } = routes[normalizedRoute]
+        const normalizedDataRoute = i18n ? localizeDataRoute(dataRoute, normalizedRoute) : dataRoute
         return [route, normalizedDataRoute]
       }
-    }
 
-    throw new Error(`not an ISR route`)
+      // matches dynamic routes
+      const unlocalizedRoute = i18n ? unlocalizeRoute(normalizedRoute, i18n) : normalizedRoute
+      for (const dynamicRoute in dynamicRoutes) {
+        const { dataRoute, routeRegex } = dynamicRoutes[dynamicRoute]
+        const matches = unlocalizedRoute.match(routeRegex)
+        if (matches?.length > 0) {
+          // remove the first match, which is the full route
+          matches.shift()
+          // replace the dynamic segments with the actual values
+          const interpolatedDataRoute = dataRoute.replace(/\[(.*?)]/g, () => matches.shift())
+          const normalizedDataRoute = i18n
+            ? localizeDataRoute(interpolatedDataRoute, normalizedRoute)
+            : interpolatedDataRoute
+          return [route, normalizedDataRoute]
+        }
+      }
+
+      throw new Error(`not an ISR route`)
+    }
   }
+
+  return NetlifyNextServer
 }
 
-export { NetlifyNextServer, NetlifyConfig }
+export type NetlifyNextServerType = ReturnType<typeof getNetlifyNextServer>
+
+export { getNetlifyNextServer, NetlifyConfig }
diff --git a/test/helpers/analysis.spec.ts b/test/helpers/analysis.spec.ts
index 0aa0748137..ee96ce02a7 100644
--- a/test/helpers/analysis.spec.ts
+++ b/test/helpers/analysis.spec.ts
@@ -12,29 +12,29 @@ describe('static source analysis', () => {
     ;(console.error as jest.Mock).mockRestore()
   })
   it('should extract config values from a source file', async () => {
-    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background.js'))
+    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background.js'), process.cwd())
     expect(config).toEqual({
       type: 'experimental-background',
     })
   })
   it('should extract config values from a TypeScript source file', async () => {
-    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background.ts'))
+    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background.ts'), process.cwd())
     expect(config).toEqual({
       type: 'experimental-background',
     })
   })
   it('should return an empty config if not defined', async () => {
-    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/missing.ts'))
+    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/missing.ts'), process.cwd())
     expect(config).toEqual({})
   })
 
   it('should return an empty config if config is invalid', async () => {
-    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/invalid.ts'))
+    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/invalid.ts'), process.cwd())
     expect(config).toEqual({})
   })
 
   it('should extract schedule values from a source file', async () => {
-    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/scheduled.ts'))
+    const config = await extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/scheduled.ts'), process.cwd())
     expect(config).toEqual({
       type: 'experimental-scheduled',
       schedule: '@daily',
@@ -42,40 +42,40 @@ describe('static source analysis', () => {
   })
   it('should throw if schedule is provided when type is background', async () => {
     await expect(
-      extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background-schedule.ts')),
+      extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background-schedule.ts'), process.cwd()),
     ).rejects.toThrow('Unsupported config value in test/fixtures/analysis/background-schedule.ts')
     expect(console.error).toHaveBeenCalledWith(
       `Invalid config value in test/fixtures/analysis/background-schedule.ts: schedule is not allowed unless type is "experimental-scheduled"`,
     )
   })
   it('should throw if schedule is provided when type is default', async () => {
-    await expect(extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/default-schedule.ts'))).rejects.toThrow(
-      'Unsupported config value in test/fixtures/analysis/default-schedule.ts',
-    )
+    await expect(
+      extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/default-schedule.ts'), process.cwd()),
+    ).rejects.toThrow('Unsupported config value in test/fixtures/analysis/default-schedule.ts')
     expect(console.error).toHaveBeenCalledWith(
       `Invalid config value in test/fixtures/analysis/default-schedule.ts: schedule is not allowed unless type is "experimental-scheduled"`,
     )
   })
   it('should throw if schedule is not provided when type is scheduled', async () => {
-    await expect(extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/missing-schedule.ts'))).rejects.toThrow(
-      'Unsupported config value in test/fixtures/analysis/missing-schedule.ts',
-    )
+    await expect(
+      extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/missing-schedule.ts'), process.cwd()),
+    ).rejects.toThrow('Unsupported config value in test/fixtures/analysis/missing-schedule.ts')
     expect(console.error).toHaveBeenCalledWith(
       `Invalid config value in test/fixtures/analysis/missing-schedule.ts: schedule is required when type is "experimental-scheduled"`,
     )
   })
   it('should throw if edge runtime is specified for scheduled functions', async () => {
-    await expect(extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/scheduled-edge.ts'))).rejects.toThrow(
-      'Unsupported config value in test/fixtures/analysis/scheduled-edge.ts',
-    )
+    await expect(
+      extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/scheduled-edge.ts'), process.cwd()),
+    ).rejects.toThrow('Unsupported config value in test/fixtures/analysis/scheduled-edge.ts')
     expect(console.error).toHaveBeenCalledWith(
       `Invalid config value in test/fixtures/analysis/scheduled-edge.ts: edge runtime is not supported for scheduled functions`,
     )
   })
   it('should throw if edge runtime is specified for background functions', async () => {
-    await expect(extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background-edge.ts'))).rejects.toThrow(
-      'Unsupported config value in test/fixtures/analysis/background-edge.ts',
-    )
+    await expect(
+      extractConfigFromFile(resolve(__dirname, '../fixtures/analysis/background-edge.ts'), process.cwd()),
+    ).rejects.toThrow('Unsupported config value in test/fixtures/analysis/background-edge.ts')
     expect(console.error).toHaveBeenCalledWith(
       `Invalid config value in test/fixtures/analysis/background-edge.ts: edge runtime is not supported for background functions`,
     )
diff --git a/test/index.spec.ts b/test/index.spec.ts
index 1e9e5279f6..7c10448c7a 100644
--- a/test/index.spec.ts
+++ b/test/index.spec.ts
@@ -550,8 +550,12 @@ describe('onBuild()', () => {
     expect(existsSync(handlerFile)).toBeTruthy()
     expect(existsSync(odbHandlerFile)).toBeTruthy()
 
-    expect(readFileSync(handlerFile, 'utf8')).toMatch(`(config, "../../..", pageRoot, staticManifest, 'ssr')`)
-    expect(readFileSync(odbHandlerFile, 'utf8')).toMatch(`(config, "../../..", pageRoot, staticManifest, 'odb')`)
+    expect(readFileSync(handlerFile, 'utf8')).toMatch(
+      `({ conf: config, app: "../../..", pageRoot, NextServer, staticManifest, mode: 'ssr' })`,
+    )
+    expect(readFileSync(odbHandlerFile, 'utf8')).toMatch(
+      `({ conf: config, app: "../../..", pageRoot, NextServer, staticManifest, mode: 'odb' })`,
+    )
     expect(readFileSync(handlerFile, 'utf8')).toMatch(`require("../../../.next/required-server-files.json")`)
     expect(readFileSync(odbHandlerFile, 'utf8')).toMatch(`require("../../../.next/required-server-files.json")`)
   })
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/index.js b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/index.js
new file mode 100644
index 0000000000..3ac501d059
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/index.js
@@ -0,0 +1,12 @@
+const fs = require(`fs`)
+const path = require(`path`)
+
+module.exports = {
+  onPostBuild: async () => {
+    const movedDir = path.join(process.cwd(), `next-app`, `node_modules2`)
+    try {
+      fs.unlinkSync(movedDir)
+    } catch {}
+    fs.renameSync(path.join(process.cwd(), `next-app`, `node_modules`), movedDir)
+  },
+}
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/manifest.yaml b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/manifest.yaml
new file mode 100644
index 0000000000..1727ced689
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/manifest.yaml
@@ -0,0 +1 @@
+name: clear-node-modules-after-functions-bundling-plugin
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/package.json b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/package.json
new file mode 100644
index 0000000000..593181fd63
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/clear-node-modules-after-functions-bundling-plugin/package.json
@@ -0,0 +1,3 @@
+{
+  "name": "clear-node-modules-after-functions-bundling-plugin"
+}
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/netlify.toml b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/netlify.toml
new file mode 100644
index 0000000000..29f97224b8
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/netlify.toml
@@ -0,0 +1,9 @@
+[build]
+command = "cd next-app; npm install; npm run build"
+publish = "next-app/.next"
+
+[[plugins]]
+package = "@netlify/plugin-nextjs"
+
+[[plugins]]
+package = "/clear-node-modules-after-functions-bundling-plugin"
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/package.json b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/package.json
new file mode 100644
index 0000000000..527ecb61eb
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/package.json
@@ -0,0 +1,16 @@
+{
+  "name": "my-app",
+  "version": "0.1.0",
+  "private": true,
+  "scripts": {
+    "dev": "next dev",
+    "build": "next build",
+    "start": "next start",
+    "lint": "next lint"
+  },
+  "dependencies": {
+    "next": "13.2.4",
+    "react": "18.2.0",
+    "react-dom": "18.2.0"
+  }
+}
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/pages/api/hello.js b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/pages/api/hello.js
new file mode 100644
index 0000000000..bf4cbe226e
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/pages/api/hello.js
@@ -0,0 +1,3 @@
+module.exports = function handler(req, res) {
+  res.status(200).json({ name: 'John Doe' })
+}
diff --git a/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/pages/index.js b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/pages/index.js
new file mode 100644
index 0000000000..f33154f21e
--- /dev/null
+++ b/test/integration/fixtures/next-package-not-resolvable-in-base-dir/next-app/pages/index.js
@@ -0,0 +1,24 @@
+import Head from 'next/head'
+
+export default function Home() {
+  return (
+    <>
+      <Head>
+        <title>Create Next App</title>
+        <meta name="description" content="Generated by create next app" />
+        <meta name="viewport" content="width=device-width, initial-scale=1" />
+      </Head>
+      <main>
+        <div>Hello world</div>
+      </main>
+    </>
+  )
+}
+
+export const getServerSideProps = async ({ params }) => {
+  return {
+    props: {
+      ssr: true,
+    },
+  }
+}
diff --git a/test/integration/jest.config.js b/test/integration/jest.config.js
new file mode 100644
index 0000000000..e5d5909f84
--- /dev/null
+++ b/test/integration/jest.config.js
@@ -0,0 +1,8 @@
+module.exports = {
+  transform: {
+    '\\.[jt]sx?$': 'babel-jest',
+  },
+  verbose: true,
+  testTimeout: 60000,
+  maxWorkers: 1,
+}
diff --git a/test/integration/next-package-not-resolvable-in-base-dir.spec.ts b/test/integration/next-package-not-resolvable-in-base-dir.spec.ts
new file mode 100644
index 0000000000..1c84d113ea
--- /dev/null
+++ b/test/integration/next-package-not-resolvable-in-base-dir.spec.ts
@@ -0,0 +1,93 @@
+import { tmpdir } from 'os'
+import { join } from 'path'
+
+import execa from 'execa'
+import { mkdtempSync, copySync } from 'fs-extra'
+import fetch from 'node-fetch'
+import waitOn from 'wait-on'
+
+let destroy = () => {}
+
+beforeAll(async () => {
+  const tmpDir = mkdtempSync(join(tmpdir(), `isolated-test-`))
+
+  // copy fixture to isolated tmp directory
+  const siteSrcDir = join(__dirname, 'fixtures', 'next-package-not-resolvable-in-base-dir')
+  const siteDestDir = join(tmpDir, 'next-package-not-resolvable-in-base-dir')
+
+  console.log(`copying fixture site "${siteSrcDir}" to "${siteDestDir}"`)
+  copySync(siteSrcDir, siteDestDir)
+
+  // bump version so no npm cache tries to use what's in npm registry
+  const runtimeSrcDir = join(__dirname, '..', '..', 'packages', 'runtime')
+  await execa(`npm`, [`version`, `prerelease`, `--no-git-tag-version`], { cwd: runtimeSrcDir, stdio: `inherit` })
+
+  // create package tarball
+  const o = await execa(`npm`, [`pack`, `--json`], { cwd: runtimeSrcDir })
+  const tgzName = JSON.parse(o.stdout)[0].filename
+  const tgzPath = join(runtimeSrcDir, tgzName)
+
+  // install runtime from tarball
+  await execa(`npm`, [`install`, tgzPath], { cwd: siteDestDir, stdio: `inherit` })
+
+  return new Promise<void>(async (resolve, reject) => {
+    try {
+      // run
+      let isServeRunning = true
+      const serveProcess = execa('netlify', ['serve', `-p`, `8888`], { cwd: siteDestDir, stdio: `inherit` })
+
+      let shouldRejectOnNonZeroProcessExit = true
+      serveProcess.catch((error) => {
+        isServeRunning = false
+        if (shouldRejectOnNonZeroProcessExit) {
+          reject(error)
+        }
+        return null
+      })
+
+      await waitOn({
+        resources: [`http://localhost:8888/`],
+        timeout: 3 * 60 * 1000,
+      })
+
+      if (!isServeRunning) {
+        return reject(new Error(`serve process exited`))
+      }
+
+      destroy = () => {
+        shouldRejectOnNonZeroProcessExit = false
+        serveProcess.kill()
+      }
+
+      // ensure we can't resolve "next" from either base dir or app dir
+      // this is done to ensure that functions packaging worked correctly and doesn't rely on
+      // leftover node_modules that wouldn't be available when functions are deployed to lambdas
+      expect(() => require.resolve(`next`, { paths: [siteDestDir] })).toThrow()
+      expect(() => require.resolve(`next`, { paths: [join(siteDestDir, `next-app`)] })).toThrow()
+
+      return resolve()
+    } catch (error) {
+      reject(error)
+    }
+  })
+}, 3 * 60 * 1000)
+
+afterAll(() => destroy())
+
+it(`page route executes correctly`, async () => {
+  const htmlResponse = await fetch(`http://localhost:8888/`)
+  // ensure we got a 200
+  expect(htmlResponse.ok).toBe(true)
+  // ensure we use ssr handler
+  expect(htmlResponse.headers.get(`x-nf-render-mode`)).toEqual(`ssr`)
+  const t = expect(await htmlResponse.text()).toMatch(/Hello world/)
+})
+
+it(`api route executes correctly`, async () => {
+  const apiResponse = await fetch(`http://localhost:8888/api/hello`)
+  // ensure we got a 200
+  expect(apiResponse.ok).toBe(true)
+  // ensure we use ssr handler
+  expect(apiResponse.headers.get(`x-nf-render-mode`)).toEqual(`ssr`)
+  expect(await apiResponse.json()).toEqual({ name: 'John Doe' })
+})
diff --git a/test/templates/server.spec.ts b/test/templates/server.spec.ts
index 0ee660df8e..2f0155e106 100644
--- a/test/templates/server.spec.ts
+++ b/test/templates/server.spec.ts
@@ -1,8 +1,9 @@
 import { createRequestResponseMocks } from 'next/dist/server/lib/mock-request'
 import { Options } from 'next/dist/server/next-server'
 
-import { getNextServer, NextServerType, netlifyApiFetch } from '../../packages/runtime/src/templates/handlerUtils'
-import { NetlifyNextServer, NetlifyConfig } from '../../packages/runtime/src/templates/server'
+import { getServerFile } from '../../packages/runtime/src/helpers/files'
+import { NextServerType, netlifyApiFetch } from '../../packages/runtime/src/templates/handlerUtils'
+import { getNetlifyNextServer, NetlifyNextServerType, NetlifyConfig } from '../../packages/runtime/src/templates/server'
 
 jest.mock('../../packages/runtime/src/templates/handlerUtils', () => {
   const originalModule = jest.requireActual('../../packages/runtime/src/templates/handlerUtils')
@@ -53,9 +54,11 @@ jest.mock(
   { virtual: true },
 )
 
+let NetlifyNextServer: NetlifyNextServerType
 beforeAll(() => {
-  const NextServer: NextServerType = getNextServer()
+  const NextServer: NextServerType = require(getServerFile(__dirname, false)).default
   jest.spyOn(NextServer.prototype, 'getRequestHandler').mockImplementation(() => () => Promise.resolve())
+  NetlifyNextServer = getNetlifyNextServer(NextServer)
 
   const MockNetlifyNextServerConstructor = function (nextOptions: Options, netlifyConfig: NetlifyConfig) {
     this.distDir = '.'