diff --git a/packages/gatsby-dev-cli/src/__tests__/watch.js b/packages/gatsby-dev-cli/src/__tests__/watch.js
new file mode 100644
index 0000000000000..0af1b6c425228
--- /dev/null
+++ b/packages/gatsby-dev-cli/src/__tests__/watch.js
@@ -0,0 +1,140 @@
+jest.mock(`chokidar`, () => {
+  return {
+    watch: jest.fn(),
+  }
+})
+jest.mock(`fs-extra`, () => {
+  return {
+    copy: jest.fn(),
+    existsSync: jest.fn(),
+  }
+})
+const chokidar = require(`chokidar`)
+const fs = require(`fs-extra`)
+const path = require(`path`)
+const watch = require(`../watch`)
+
+let on
+beforeEach(() => {
+  fs.copy.mockReset()
+  fs.existsSync.mockImplementation(() => true)
+  chokidar.watch.mockImplementation(() => {
+    const mock = {
+      on: jest.fn().mockImplementation(() => mock),
+    }
+    on = mock.on
+    return mock
+  })
+})
+
+describe(`watching`, () => {
+  const callEventCallback = (...args) =>
+    on.mock.calls[0].slice(-1).pop()(...args)
+  const callReadyCallback = (...args) =>
+    on.mock.calls[1].slice(-1).pop()(...args)
+
+  const args = [process.cwd(), [`gatsby`], {}]
+
+  it(`watches files`, () => {
+    watch(...args)
+    expect(chokidar.watch).toHaveBeenCalledTimes(1)
+    expect(chokidar.watch).toHaveBeenCalledWith(expect.any(Array), {
+      ignored: [expect.any(Function)],
+    })
+  })
+
+  it(`registers on handlers`, () => {
+    watch(...args)
+
+    expect(on).toHaveBeenCalledTimes(2)
+    expect(on).toHaveBeenLastCalledWith(`ready`, expect.any(Function))
+  })
+
+  describe(`copying files`, () => {
+    it(`does not copy files on non-watch event`, () => {
+      watch(...args)
+
+      callEventCallback(`test`)
+
+      expect(fs.copy).not.toHaveBeenCalled()
+    })
+
+    it(`copies files on watch event`, () => {
+      const filePath = path.join(process.cwd(), `packages/gatsby/dist/index.js`)
+      watch(...args)
+      callEventCallback(`add`, filePath)
+
+      expect(fs.copy).toHaveBeenCalledTimes(1)
+      expect(fs.copy).toHaveBeenCalledWith(
+        filePath,
+        `node_modules/gatsby/dist/index.js`,
+        expect.any(Function)
+      )
+    })
+
+    it(`copies cache-dir files`, () => {
+      watch(...args)
+
+      const filePath = path.join(
+        process.cwd(),
+        `packages/gatsby/cache-dir/register-service-worker.js`
+      )
+      callEventCallback(`add`, filePath)
+
+      expect(fs.copy).toHaveBeenCalledTimes(2)
+      expect(fs.copy).toHaveBeenLastCalledWith(
+        filePath,
+        `.cache/register-service-worker.js`,
+        expect.any(Function)
+      )
+    })
+
+    it(`filters non-existant files/directories`, () => {
+      fs.existsSync.mockReset().mockImplementation(file => false)
+
+      watch(...args)
+
+      expect(chokidar.watch).toHaveBeenCalledWith([], expect.any(Object))
+    })
+
+    it(`filters duplicate directories`, () => {
+      watch(process.cwd(), [`gatsby`, `gatsby`], {})
+
+      expect(chokidar.watch).toHaveBeenCalledWith(
+        [expect.stringContaining(`gatsby`)],
+        expect.any(Object)
+      )
+    })
+  })
+
+  describe(`exiting`, () => {
+    let realProcess
+    beforeAll(() => {
+      realProcess = global.process
+
+      global.process = {
+        ...realProcess,
+        exit: jest.fn(),
+      }
+    })
+
+    afterAll(() => {
+      global.process = realProcess
+    })
+
+    it(`does not exit if scanOnce is not defined`, () => {
+      watch(...args)
+      callReadyCallback()
+
+      expect(process.exit).not.toHaveBeenCalled()
+    })
+
+    it(`exits if scanOnce is defined`, async () => {
+      watch(process.cwd(), [`gatsby`], { scanOnce: true })
+
+      await callReadyCallback()
+
+      expect(process.exit).toHaveBeenCalledTimes(1)
+    })
+  })
+})
diff --git a/packages/gatsby-dev-cli/src/watch.js b/packages/gatsby-dev-cli/src/watch.js
index a4d940d38a398..1c256175ff3ef 100644
--- a/packages/gatsby-dev-cli/src/watch.js
+++ b/packages/gatsby-dev-cli/src/watch.js
@@ -26,24 +26,33 @@ const copyPath = (oldPath, newPath, quiet) =>
     })
   })
 
+/*
+ * non-existant packages break on('ready')
+ * See: https://github.com/paulmillr/chokidar/issues/449
+ */
 function watch(root, packages, { scanOnce, quiet }) {
-  const ignored = [
-    /[/\\]node_modules[/\\]/i,
-    /\.git/i,
-    /\.DS_Store/,
-  ].concat(
+  const ignored = [/[/\\]node_modules[/\\]/i, /\.git/i, /\.DS_Store/].concat(
     packages.map(p => new RegExp(`${p}[\\/\\\\]src[\\/\\\\]`, `i`))
   )
-  const watchers = packages.map(p => path.join(root, `/packages/`, p))
+  const watchers = _.uniq(
+    packages
+      .map(p => path.join(root, `/packages/`, p))
+      .filter(p => fs.existsSync(p))
+  )
 
   let allCopies = []
 
-  chokidar.watch(watchers, {
-    ignored: [filePath => _.some(ignored, reg => reg.test(filePath))],
-  })
+  chokidar
+    .watch(watchers, {
+      ignored: [filePath => _.some(ignored, reg => reg.test(filePath))],
+    })
     .on(`all`, (event, filePath) => {
-      if (event === `change` || event === `add`) {
-        const packageName = path.basename(path.dirname(filePath.split(`packages/`).pop()))
+      const watchEvents = [`change`, `add`]
+      if (_.includes(watchEvents, event)) {
+        const [packageName] = filePath
+          .split(`packages/`)
+          .pop()
+          .split(`/`)
         const prefix = path.join(root, `/packages/`, packageName)
 
         // Copy it over local version.
@@ -71,14 +80,14 @@ function watch(root, packages, { scanOnce, quiet }) {
         allCopies = allCopies.concat(localCopies)
       }
     })
-    .on(`ready`, () => {
+    .on(`ready`, () =>
       // all files watched, quit once all files are copied if necessary
       Promise.all(allCopies).then(() => {
         if (scanOnce) {
           quit()
         }
       })
-    })
+    )
 }
 
 module.exports = watch
diff --git a/scripts/publish-site.sh b/scripts/publish-site.sh
index b134ffd4c8b48..79915c15a01b7 100755
--- a/scripts/publish-site.sh
+++ b/scripts/publish-site.sh
@@ -12,7 +12,7 @@ cd "$1" || exit
 yarn
 
 echo "=== Copying built Gatsby to website."
-gatsby-dev --scan-once --quiet
+gatsby-dev --scan-once
 
 # copy file if target dir exists
 FRAGMENTSDIR="node_modules/gatsby-transformer-sharp/src"