diff --git a/packages/webpack/src/executors/dev-server/dev-server.impl.ts b/packages/webpack/src/executors/dev-server/dev-server.impl.ts
index cad8347740bcc..0b2722e62456a 100644
--- a/packages/webpack/src/executors/dev-server/dev-server.impl.ts
+++ b/packages/webpack/src/executors/dev-server/dev-server.impl.ts
@@ -24,6 +24,9 @@ export async function* devServerExecutor(
   serveOptions: WebDevServerOptions,
   context: ExecutorContext
 ) {
+  // Default to dev mode so builds are faster and HMR mode works better.
+  process.env.NODE_ENV ??= 'development';
+
   const { root: projectRoot, sourceRoot } =
     context.projectsConfigurations.projects[context.projectName];
   const buildOptions = normalizeOptions(