diff --git a/packages/backend/package.json b/packages/backend/package.json
index f9bf855371..d944ac6535 100644
--- a/packages/backend/package.json
+++ b/packages/backend/package.json
@@ -10,7 +10,7 @@
   },
   "scripts": {
     "build": "backstage-cli backend:build",
-    "build-image": "backstage-cli backend:build-image --tag example-backend",
+    "build-image": "backstage-cli backend:build-image --build --tag example-backend",
     "start": "backstage-cli backend:dev",
     "lint": "backstage-cli lint",
     "test": "backstage-cli test",
diff --git a/packages/cli/src/commands/backend/buildImage.ts b/packages/cli/src/commands/backend/buildImage.ts
index 14b62d2894..2be04dfa76 100644
--- a/packages/cli/src/commands/backend/buildImage.ts
+++ b/packages/cli/src/commands/backend/buildImage.ts
@@ -32,6 +32,7 @@ export default async (cmd: Command) => {
   const pkgPath = paths.resolveTarget(PKG_PATH);
   const pkg = await fs.readJson(pkgPath);
   const tempDistWorkspace = await createDistWorkspace([pkg.name], {
+    buildDependencies: Boolean(cmd.build),
     files: [
       'package.json',
       'yarn.lock',
diff --git a/packages/cli/src/commands/index.ts b/packages/cli/src/commands/index.ts
index e8b7fccfee..4e031cdbc1 100644
--- a/packages/cli/src/commands/index.ts
+++ b/packages/cli/src/commands/index.ts
@@ -41,7 +41,7 @@ export function registerCommands(program: CommanderStatic) {
     .helpOption(', --backstage-cli-help') // Let docker handle --help
     .option('--build', 'Build packages before packing them into the image')
     .description(
-      'Build a docker , all extra options are forwarded to docker build',
+      'Bundles the package into a docker image. All extra args are forwarded to docker image build',
     )
     .action(lazy(() => import('./backend/buildImage').then(m => m.default)));
 
diff --git a/packages/cli/src/lib/packager/index.ts b/packages/cli/src/lib/packager/index.ts
index fda85dd68a..5584e1fc21 100644
--- a/packages/cli/src/lib/packager/index.ts
+++ b/packages/cli/src/lib/packager/index.ts
@@ -48,6 +48,11 @@ type Options = {
    * Defaults to ['yarn.lock', 'package.json'].
    */
   files?: FileEntry[];
+
+  /**
+   * If set to true, the target packages are built before they are packaged into the workspace.
+   */
+  buildDependencies?: boolean;
 };
 
 /**
@@ -68,6 +73,13 @@ export async function createDistWorkspace(
 
   const targets = await findTargetPackages(packageNames);
 
+  if (options.buildDependencies) {
+    const scopeArgs = targets.flatMap(target => ['--scope', target.name]);
+    await run('yarn', ['lerna', 'run', ...scopeArgs, 'build'], {
+      cwd: paths.targetRoot,
+    });
+  }
+
   await moveToDistWorkspace(targetDir, targets);
 
   const files: FileEntry[] = options.files ?? ['yarn.lock', 'package.json'];
diff --git a/packages/create-app/templates/default-app/packages/backend/package.json.hbs b/packages/create-app/templates/default-app/packages/backend/package.json.hbs
index 8fc1e3bbe1..044ee1560a 100644
--- a/packages/create-app/templates/default-app/packages/backend/package.json.hbs
+++ b/packages/create-app/templates/default-app/packages/backend/package.json.hbs
@@ -9,7 +9,7 @@
   },
   "scripts": {
     "build": "backstage-cli backend:build",
-    "build-image": "backstage-cli backend:build-image --tag example-backend",
+    "build-image": "backstage-cli backend:build-image --build --tag example-backend",
     "start": "backstage-cli backend:dev",
     "lint": "backstage-cli lint",
     "test": "backstage-cli test",