diff --git a/packages/cli/src/commands/start/startFrontend.ts b/packages/cli/src/commands/start/startFrontend.ts
index 00f7818b41..536b313dfe 100644
--- a/packages/cli/src/commands/start/startFrontend.ts
+++ b/packages/cli/src/commands/start/startFrontend.ts
@@ -91,11 +91,16 @@ export async function startFrontend(options: StartAppOptions) {
 
   checkReactVersion();
 
+  const configChannel = new MessageChannel();
+
   const { name } = await fs.readJson(paths.resolveTarget('package.json'));
   const config = await loadCliConfig({
     args: options.configPaths,
     fromPackage: name,
     withFilteredKeys: true,
+    watch(appConfigs) {
+      configChannel.port1.postMessage(appConfigs);
+    },
   });
 
   const appBaseUrl = config.frontendConfig.getString('app.baseUrl');
@@ -119,6 +124,7 @@ export async function startFrontend(options: StartAppOptions) {
   const waitForExit = await serveBundle({
     entry: options.entry,
     checksEnabled: options.checksEnabled,
+    configChannel,
     ...config,
   });
 
diff --git a/packages/cli/src/lib/bundler/config.ts b/packages/cli/src/lib/bundler/config.ts
index 94b2a1c561..2f09a66e18 100644
--- a/packages/cli/src/lib/bundler/config.ts
+++ b/packages/cli/src/lib/bundler/config.ts
@@ -117,12 +117,6 @@ export async function createConfig(
     }),
   );
 
-  plugins.push(
-    new webpack.EnvironmentPlugin({
-      APP_CONFIG: options.frontendAppConfigs,
-    }),
-  );
-
   plugins.push(
     new HtmlWebpackPlugin({
       template: paths.targetHtml,
@@ -137,6 +131,10 @@ export async function createConfig(
   plugins.push(
     new webpack.DefinePlugin({
       'process.env.BUILD_INFO': JSON.stringify(buildInfo),
+      'process.env.APP_CONFIG': webpack.DefinePlugin.runtimeValue(
+        () => JSON.stringify(options.getFrontendAppConfigs()),
+        true,
+      ),
     }),
   );
 
diff --git a/packages/cli/src/lib/bundler/server.ts b/packages/cli/src/lib/bundler/server.ts
index cef55d3265..bef1a6fd7a 100644
--- a/packages/cli/src/lib/bundler/server.ts
+++ b/packages/cli/src/lib/bundler/server.ts
@@ -21,6 +21,7 @@ import openBrowser from 'react-dev-utils/openBrowser';
 import { createConfig, resolveBaseUrl } from './config';
 import { ServeOptions } from './types';
 import { resolveBundlingPaths } from './paths';
+import { AppConfig } from '@backstage/config';
 
 export async function serveBundle(options: ServeOptions) {
   const url = resolveBaseUrl(options.frontendConfig);
@@ -32,6 +33,8 @@ export async function serveBundle(options: ServeOptions) {
     Number(url.port) ||
     (url.protocol === 'https:' ? 443 : 80);
 
+  let latestFrontendAppConfigs = options.frontendAppConfigs;
+
   const paths = resolveBundlingPaths(options);
   const pkgPath = paths.targetPackageJson;
   const pkg = await fs.readJson(pkgPath);
@@ -39,6 +42,9 @@ export async function serveBundle(options: ServeOptions) {
     ...options,
     isDev: true,
     baseUrl: url,
+    getFrontendAppConfigs: () => {
+      return latestFrontendAppConfigs;
+    },
   });
 
   const compiler = webpack(config);
@@ -95,6 +101,13 @@ export async function serveBundle(options: ServeOptions) {
     });
   });
 
+  options.configChannel.port2.onmessage = ({
+    data,
+  }: MessageEvent<AppConfig[]>) => {
+    latestFrontendAppConfigs = data;
+    server.invalidate();
+  };
+
   const waitForExit = async () => {
     for (const signal of ['SIGINT', 'SIGTERM'] as const) {
       process.on(signal, () => {
diff --git a/packages/cli/src/lib/bundler/types.ts b/packages/cli/src/lib/bundler/types.ts
index 64916e349c..90fff4f3c1 100644
--- a/packages/cli/src/lib/bundler/types.ts
+++ b/packages/cli/src/lib/bundler/types.ts
@@ -22,7 +22,7 @@ export type BundlingOptions = {
   checksEnabled: boolean;
   isDev: boolean;
   frontendConfig: Config;
-  frontendAppConfigs: AppConfig[];
+  getFrontendAppConfigs(): AppConfig[];
   baseUrl: URL;
   parallelism?: number;
 };
@@ -32,6 +32,7 @@ export type ServeOptions = BundlingPathsOptions & {
   frontendConfig: Config;
   frontendAppConfigs: AppConfig[];
   fullConfig: Config;
+  configChannel: MessageChannel;
 };
 
 export type BuildOptions = BundlingPathsOptions & {
diff --git a/packages/cli/src/lib/config.ts b/packages/cli/src/lib/config.ts
index aaf3fcfcb9..b0efa8163a 100644
--- a/packages/cli/src/lib/config.ts
+++ b/packages/cli/src/lib/config.ts
@@ -19,7 +19,7 @@ import {
   loadConfig,
   loadConfigSchema,
 } from '@backstage/config-loader';
-import { ConfigReader } from '@backstage/config';
+import { AppConfig, ConfigReader } from '@backstage/config';
 import { paths } from './paths';
 import { isValidUrl } from './urls';
 import { getPackages } from '@manypkg/get-packages';
@@ -33,6 +33,7 @@ type Options = {
   withDeprecatedKeys?: boolean;
   fullVisibility?: boolean;
   strict?: boolean;
+  watch?: (newFrontendAppConfigs: AppConfig[]) => void;
 };
 
 export async function loadCliConfig(options: Options) {
@@ -80,6 +81,19 @@ export async function loadCliConfig(options: Options) {
       : undefined,
     configRoot: paths.targetRoot,
     configTargets: configTargets,
+    watch: options.watch && {
+      onChange(newAppConfigs) {
+        const newFrontendAppConfigs = schema.process(newAppConfigs, {
+          visibility: options.fullVisibility
+            ? ['frontend', 'backend', 'secret']
+            : ['frontend'],
+          withFilteredKeys: options.withFilteredKeys,
+          withDeprecatedKeys: options.withDeprecatedKeys,
+          ignoreSchemaErrors: !options.strict,
+        });
+        options.watch!(newFrontendAppConfigs);
+      },
+    },
   });
 
   // printing to stderr to not clobber stdout in case the cli command