diff --git a/packages/react-devtools-core/src/standalone.js b/packages/react-devtools-core/src/standalone.js
index a5371154efa86..8a20d75aa0164 100644
--- a/packages/react-devtools-core/src/standalone.js
+++ b/packages/react-devtools-core/src/standalone.js
@@ -12,7 +12,7 @@ import Store from 'src/devtools/store';
 import { getSavedComponentFilters, getAppendComponentStack } from 'src/utils';
 import { Server } from 'ws';
 import { join } from 'path';
-import { existsSync, readFileSync } from 'fs';
+import { readFileSync } from 'fs';
 import { installHook } from 'src/hook';
 import DevTools from 'src/devtools/views/DevTools';
 import { doesFilePathExist, launchEditor } from './editor';
@@ -257,15 +257,8 @@ function startServer(port?: number = 8097) {
   });
 
   httpServer.on('request', (request, response) => {
-    // NPM installs should read from node_modules,
-    // But local dev mode needs to use a relative path.
-    let basePath = join(__dirname, 'node_modules/react-devtools-core');
-    if (!existsSync(basePath)) {
-      basePath = '../react-devtools-core';
-    }
-
     // Serve a file that immediately sets up the connection.
-    const backendFile = readFileSync(`${basePath}/dist/backend.js`);
+    const backendFile = readFileSync(join(__dirname, 'backend.js'));
 
     // The renderer interface doesn't read saved component filters directly,
     // because they are generally stored in localStorage within the context of the extension.
diff --git a/packages/react-devtools-core/webpack.standalone.js b/packages/react-devtools-core/webpack.standalone.js
index 034d281a5775a..03019861a2301 100644
--- a/packages/react-devtools-core/webpack.standalone.js
+++ b/packages/react-devtools-core/webpack.standalone.js
@@ -31,6 +31,12 @@ module.exports = {
       src: resolve(__dirname, '../../src'),
     },
   },
+  node: {
+    // Don't replace __dirname!
+    // This would break the standalone DevTools ability to load the backend.
+    // see https://github.com/facebook/react-devtools/issues/1269
+    __dirname: false,
+  },
   plugins: [
     new DefinePlugin({
       __DEV__: false,