diff --git a/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/package.json b/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/package.json
index 010d226..47b3381 100644
--- a/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/package.json
+++ b/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/package.json
@@ -1,6 +1,6 @@
 {
   "name": "aspnet-webpack",
-  "version": "1.0.29",
+  "version": "2.0.0",
   "description": "Helpers for using Webpack in ASP.NET Core projects. Works in conjunction with the Microsoft.AspNetCore.SpaServices NuGet package.",
   "main": "index.js",
   "scripts": {
diff --git a/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/src/WebpackDevMiddleware.ts b/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/src/WebpackDevMiddleware.ts
index bf31d82..7fba9de 100644
--- a/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/src/WebpackDevMiddleware.ts
+++ b/src/Microsoft.AspNetCore.SpaServices/npm/aspnet-webpack/src/WebpackDevMiddleware.ts
@@ -108,7 +108,7 @@ function attachWebpackDevMiddleware(app: any, webpackConfig: webpack.Configurati
     const compiler = webpack(webpackConfig);
     app.use(require('webpack-dev-middleware')(compiler, {
         noInfo: true,
-        publicPath: webpackConfig.output.publicPath,
+        publicPath: ensureLeadingSlash(webpackConfig.output.publicPath),
         watchOptions: webpackConfig.watchOptions
     }));
 
@@ -195,6 +195,14 @@ function copyRecursiveToRealFsSync(from: typeof fs, rootDir: string, exclude: Re
     });
 }
 
+function ensureLeadingSlash(value: string) {
+    if (value !== null && value.substring(0, 1) !== '/') {
+        value = '/' + value;
+    }
+
+    return value;
+}
+
 function pathJoinSafe(rootPath: string, filePath: string) {
     // On Windows, MemoryFileSystem's readdirSync output produces directory entries like 'C:'
     // which then trigger errors if you call statSync for them. Avoid this by detecting drive
@@ -257,22 +265,32 @@ export function createWebpackDevServer(callback: CreateDevServerCallback, option
                     if (!publicPath) {
                         throw new Error('To use the Webpack dev server, you must specify a value for \'publicPath\' on the \'output\' section of your webpack config (for any configuration that targets browsers)');
                     }
-                    normalizedPublicPaths.push(removeTrailingSlash(publicPath));
+                    const publicPathNoTrailingSlash = removeTrailingSlash(publicPath);
+                    normalizedPublicPaths.push(publicPathNoTrailingSlash);
 
-                    // Newer versions of Microsoft.AspNetCore.SpaServices will explicitly pass an HMR endpoint URL
-                    // (because it's relative to the app's URL space root, which the client doesn't otherwise know).
-                    // For back-compatibility, fall back on connecting directly to the underlying HMR server (though
-                    // that won't work if the app is hosted on HTTPS because of the mixed-content rule, and we can't
-                    // run the HMR server itself on HTTPS because in general it has no valid cert).
-                    const hmrClientEndpoint = options.hotModuleReplacementEndpointUrl   // The URL that we'll proxy (e.g., /__asp_webpack_hmr)
-                        || `http://localhost:${listener.address().port}/__webpack_hmr`; // Fall back on absolute URL to bypass proxying
-                    const hmrServerEndpoint = options.hotModuleReplacementEndpointUrl
-                        || '/__webpack_hmr';                                            // URL is relative to webpack dev server root
+                    // This is the URL the client will connect to, except that since it's a relative URL
+                    // (no leading slash), Webpack will resolve it against the runtime <base href> URL
+                    // plus it also adds the publicPath
+                    const hmrClientEndpoint = removeLeadingSlash(options.hotModuleReplacementEndpointUrl);
+
+                    // This is the URL inside the Webpack middleware Node server that we'll proxy to.
+                    // We have to prefix with the public path because Webpack will add the publicPath
+                    // when it resolves hmrClientEndpoint as a relative URL.
+                    const hmrServerEndpoint = ensureLeadingSlash(publicPathNoTrailingSlash + options.hotModuleReplacementEndpointUrl);
 
                     // We always overwrite the 'path' option as it needs to match what the .NET side is expecting
                     const hmrClientOptions = options.suppliedOptions.HotModuleReplacementClientOptions || <StringMap<string>>{};
                     hmrClientOptions['path'] = hmrClientEndpoint;
 
+                    const dynamicPublicPathKey = 'dynamicPublicPath';
+                    if (!(dynamicPublicPathKey in hmrClientOptions)) {
+                        // dynamicPublicPath default to true, so we can work with nonempty pathbases (virtual directories)
+                        hmrClientOptions[dynamicPublicPathKey] = true;
+                    } else {
+                        // ... but you can set it to any other value explicitly if you want (e.g., false)
+                        hmrClientOptions[dynamicPublicPathKey] = JSON.parse(hmrClientOptions[dynamicPublicPathKey]);
+                    }
+
                     attachWebpackDevMiddleware(app, webpackConfig, enableHotModuleReplacement, enableReactHotModuleReplacement, hmrClientOptions, hmrServerEndpoint);
                 }
             });
@@ -292,6 +310,14 @@ export function createWebpackDevServer(callback: CreateDevServerCallback, option
     });
 }
 
+function removeLeadingSlash(str: string) {
+    if (str.indexOf('/') === 0) {
+        str = str.substring(1);
+    }
+
+    return str;
+}
+
 function removeTrailingSlash(str: string) {
     if (str.lastIndexOf('/') === str.length - 1) {
         str = str.substring(0, str.length - 1);