diff --git a/cli/run/watch.ts b/cli/run/watch.ts
index 6d59fdb9133..8562f218a81 100644
--- a/cli/run/watch.ts
+++ b/cli/run/watch.ts
@@ -32,50 +32,46 @@ export default async function watch(command: any) {
 	}
 
 	if (configFile) {
-		if (configFile.startsWith('node:')) {
-			({ options: configs, warnings } = await loadAndParseConfigFile(configFile, command));
-		} else {
-			let reloadingConfig = false;
-			let aborted = false;
-			let configFileData: string | null = null;
-
-			configWatcher = fs.watch(configFile, (event: string) => {
-				if (event === 'change') reloadConfigFile();
-			});
-
-			await reloadConfigFile();
-
-			async function reloadConfigFile() {
-				try {
-					const newConfigFileData = fs.readFileSync(configFile!, 'utf-8');
-					if (newConfigFileData === configFileData) {
-						return;
-					}
-					if (reloadingConfig) {
-						aborted = true;
-						return;
-					}
-					if (configFileData) {
-						stderr(`\nReloading updated config...`);
-					}
-					configFileData = newConfigFileData;
-					reloadingConfig = true;
-					({ options: configs, warnings } = await loadAndParseConfigFile(configFile!, command));
-					reloadingConfig = false;
-					if (aborted) {
-						aborted = false;
-						reloadConfigFile();
-					} else {
-						if (watcher) {
-							watcher.close();
-						}
-						start(configs);
+		let reloadingConfig = false;
+		let aborted = false;
+		let configFileData: string | null = null;
+
+		configWatcher = fs.watch(configFile, (event: string) => {
+			if (event === 'change') reloadConfigFile();
+		});
+
+		await reloadConfigFile();
+
+		async function reloadConfigFile() {
+			try {
+				const newConfigFileData = fs.readFileSync(configFile!, 'utf-8');
+				if (newConfigFileData === configFileData) {
+					return;
+				}
+				if (reloadingConfig) {
+					aborted = true;
+					return;
+				}
+				if (configFileData) {
+					stderr(`\nReloading updated config...`);
+				}
+				configFileData = newConfigFileData;
+				reloadingConfig = true;
+				({ options: configs, warnings } = await loadAndParseConfigFile(configFile!, command));
+				reloadingConfig = false;
+				if (aborted) {
+					aborted = false;
+					reloadConfigFile();
+				} else {
+					if (watcher) {
+						watcher.close();
 					}
-				} catch (err) {
-					configs = [];
-					reloadingConfig = false;
-					handleError(err, true);
+					start(configs);
 				}
+			} catch (err) {
+				configs = [];
+				reloadingConfig = false;
+				handleError(err, true);
 			}
 		}
 	} else {
diff --git a/test/cli/samples/watch/bundle-error/_config.js b/test/cli/samples/watch/bundle-error/_config.js
new file mode 100644
index 00000000000..18b65f1bfd0
--- /dev/null
+++ b/test/cli/samples/watch/bundle-error/_config.js
@@ -0,0 +1,22 @@
+const fs = require('fs');
+const path = require('path');
+
+let mainFile;
+
+module.exports = {
+	description: 'recovers from errors during bundling',
+	command: 'rollup -cw',
+	before() {
+		mainFile = path.resolve(__dirname, 'main.js');
+		fs.writeFileSync(mainFile, '<=>');
+	},
+	abortOnStderr(data) {
+		if (data.includes('Error: Unexpected token')) {
+			setTimeout(() => fs.writeFileSync(mainFile, 'export default 42;'), 50);
+			return false;
+		}
+		if (data.includes('created _actual')) {
+			return true;
+		}
+	},
+};
diff --git a/test/cli/samples/watch/bundle-error/_expected/main.js b/test/cli/samples/watch/bundle-error/_expected/main.js
new file mode 100644
index 00000000000..d862de816a3
--- /dev/null
+++ b/test/cli/samples/watch/bundle-error/_expected/main.js
@@ -0,0 +1,3 @@
+var main = 42;
+
+export default main;
diff --git a/test/cli/samples/watch/bundle-error/main.js b/test/cli/samples/watch/bundle-error/main.js
new file mode 100644
index 00000000000..a4012bff06c
--- /dev/null
+++ b/test/cli/samples/watch/bundle-error/main.js
@@ -0,0 +1 @@
+export default 42;
\ No newline at end of file
diff --git a/test/cli/samples/watch/bundle-error/rollup.config.js b/test/cli/samples/watch/bundle-error/rollup.config.js
new file mode 100644
index 00000000000..0c8c1cb886e
--- /dev/null
+++ b/test/cli/samples/watch/bundle-error/rollup.config.js
@@ -0,0 +1,7 @@
+export default {
+	input: 'main.js',
+	output: {
+		dir: "_actual",
+		format: "es"
+	}
+};
diff --git a/test/cli/samples/watch/no-config-file/_config.js b/test/cli/samples/watch/no-config-file/_config.js
new file mode 100644
index 00000000000..f3f030d4806
--- /dev/null
+++ b/test/cli/samples/watch/no-config-file/_config.js
@@ -0,0 +1,9 @@
+module.exports = {
+	description: 'watches without a config file',
+	command: 'rollup main.js --watch --format es --file _actual/main.js',
+	abortOnStderr(data) {
+		if (data.includes('created _actual/main.js')) {
+			return true;
+		}
+	},
+};
diff --git a/test/cli/samples/watch/watch-config/_expected/output3.js b/test/cli/samples/watch/no-config-file/_expected/main.js
similarity index 51%
rename from test/cli/samples/watch/watch-config/_expected/output3.js
rename to test/cli/samples/watch/no-config-file/_expected/main.js
index 51a1fc49261..b72a22eac84 100644
--- a/test/cli/samples/watch/watch-config/_expected/output3.js
+++ b/test/cli/samples/watch/no-config-file/_expected/main.js
@@ -1,3 +1,3 @@
-const foo = 47;
+const foo = 42;
 
 export { foo };
diff --git a/test/cli/samples/watch/no-config-file/main.js b/test/cli/samples/watch/no-config-file/main.js
new file mode 100644
index 00000000000..9d7381d29f6
--- /dev/null
+++ b/test/cli/samples/watch/no-config-file/main.js
@@ -0,0 +1 @@
+export const foo = 42;
diff --git a/test/cli/samples/watch/node-config-file/_config.js b/test/cli/samples/watch/node-config-file/_config.js
new file mode 100644
index 00000000000..76205f3ea1b
--- /dev/null
+++ b/test/cli/samples/watch/node-config-file/_config.js
@@ -0,0 +1,9 @@
+module.exports = {
+	description: 'watches using a node_modules config files',
+	command: 'rollup --watch --config node:custom',
+	abortOnStderr(data) {
+		if (data.includes('created _actual/main.js')) {
+			return true;
+		}
+	},
+};
diff --git a/test/cli/samples/watch/node-config-file/_expected/main.js b/test/cli/samples/watch/node-config-file/_expected/main.js
new file mode 100644
index 00000000000..b72a22eac84
--- /dev/null
+++ b/test/cli/samples/watch/node-config-file/_expected/main.js
@@ -0,0 +1,3 @@
+const foo = 42;
+
+export { foo };
diff --git a/test/cli/samples/watch/node-config-file/main.js b/test/cli/samples/watch/node-config-file/main.js
new file mode 100644
index 00000000000..9d7381d29f6
--- /dev/null
+++ b/test/cli/samples/watch/node-config-file/main.js
@@ -0,0 +1 @@
+export const foo = 42;
diff --git a/test/cli/samples/watch/node-config-file/node_modules/rollup-config-custom/index.js b/test/cli/samples/watch/node-config-file/node_modules/rollup-config-custom/index.js
new file mode 100644
index 00000000000..acb52c3147d
--- /dev/null
+++ b/test/cli/samples/watch/node-config-file/node_modules/rollup-config-custom/index.js
@@ -0,0 +1,7 @@
+module.exports = {
+	input: 'main.js',
+	output: {
+		file: '_actual/main.js',
+		format: 'es',
+	},
+};
diff --git a/test/cli/samples/watch/node-config-file/node_modules/rollup-config-custom/package.json b/test/cli/samples/watch/node-config-file/node_modules/rollup-config-custom/package.json
new file mode 100644
index 00000000000..6b2fdf69cc5
--- /dev/null
+++ b/test/cli/samples/watch/node-config-file/node_modules/rollup-config-custom/package.json
@@ -0,0 +1,5 @@
+{
+  "name": "rollup-config-custom",
+  "version": "1.0.0",
+  "main": "index.js"
+}
diff --git a/test/cli/samples/watch/watch-config-early-update/_config.js b/test/cli/samples/watch/watch-config-early-update/_config.js
new file mode 100644
index 00000000000..badd5165a8e
--- /dev/null
+++ b/test/cli/samples/watch/watch-config-early-update/_config.js
@@ -0,0 +1,73 @@
+const fs = require('fs');
+const path = require('path');
+
+let configFile;
+let messageFile;
+let reloadTriggered = false;
+
+module.exports = {
+	description: 'immediately reloads the config file if a change happens while it is parsed',
+	command: 'rollup -cw',
+	before() {
+		configFile = path.resolve(__dirname, 'rollup.config.js');
+		messageFile = path.resolve(__dirname, '_actual', 'message.txt');
+		fs.mkdirSync(path.resolve(__dirname, '_actual'));
+		fs.writeFileSync(messageFile, 'initial');
+		fs.writeFileSync(
+			configFile,
+			`
+			import path from 'path';
+		  import fs from 'fs';
+		  const messageFile = path.resolve(__dirname, '_actual', 'message.txt');
+		  export default new Promise(resolve => {
+		    fs.writeFileSync(messageFile, 'loading');
+		    const watcher = fs.watch(messageFile, event => {
+		      if (event === 'change') {
+		        const content = fs.readFileSync(messageFile, 'utf8');
+		        if (content === 'loaded') {
+		          watcher.close();
+		          fs.writeFileSync(messageFile, 'resolved');
+		          resolve({
+		            input: {output1: "main.js"},
+		            output: {
+		              dir: "_actual",
+		              format: "es"
+		            }
+		          });
+		        }
+		      }
+		    });
+		  });
+		`
+		);
+		const watcher = fs.watch(messageFile, (event) => {
+			if (event === 'change') {
+				const content = fs.readFileSync(messageFile, 'utf8');
+				if (content === 'loading') {
+					watcher.close();
+					fs.writeFileSync(
+						configFile,
+						`
+		          export default {
+		            input: {output2: "main.js"},
+		            output: {
+		              dir: "_actual",
+		              format: "es"
+		            }
+		          };
+		        `
+					);
+					fs.writeFileSync(messageFile, 'loaded');
+				}
+			}
+		});
+	},
+	abortOnStderr(data) {
+		if (reloadTriggered && data.includes('created _actual')) {
+			return true;
+		} else if (data.includes('Reloading updated config')) {
+			reloadTriggered = true;
+			return false;
+		}
+	},
+};
diff --git a/test/cli/samples/watch/watch-config-early-update/_expected/message.txt b/test/cli/samples/watch/watch-config-early-update/_expected/message.txt
new file mode 100644
index 00000000000..5dd54033a94
--- /dev/null
+++ b/test/cli/samples/watch/watch-config-early-update/_expected/message.txt
@@ -0,0 +1 @@
+resolved
\ No newline at end of file
diff --git a/test/cli/samples/watch/watch-config-early-update/_expected/output2.js b/test/cli/samples/watch/watch-config-early-update/_expected/output2.js
new file mode 100644
index 00000000000..b72a22eac84
--- /dev/null
+++ b/test/cli/samples/watch/watch-config-early-update/_expected/output2.js
@@ -0,0 +1,3 @@
+const foo = 42;
+
+export { foo };
diff --git a/test/cli/samples/watch/watch-config-early-update/main.js b/test/cli/samples/watch/watch-config-early-update/main.js
new file mode 100644
index 00000000000..9d7381d29f6
--- /dev/null
+++ b/test/cli/samples/watch/watch-config-early-update/main.js
@@ -0,0 +1 @@
+export const foo = 42;
diff --git a/test/cli/samples/watch/watch-config-early-update/rollup.config.js b/test/cli/samples/watch/watch-config-early-update/rollup.config.js
new file mode 100644
index 00000000000..ec6ec213bce
--- /dev/null
+++ b/test/cli/samples/watch/watch-config-early-update/rollup.config.js
@@ -0,0 +1,9 @@
+
+		          export default {
+		            input: {output2: "main.js"},
+		            output: {
+		              dir: "_actual",
+		              format: "es"
+		            }
+		          };
+		        
\ No newline at end of file
diff --git a/test/cli/samples/watch/watch-config/_config.js b/test/cli/samples/watch/watch-config/_config.js
index ad10cccd7b3..199e01e8e73 100644
--- a/test/cli/samples/watch/watch-config/_config.js
+++ b/test/cli/samples/watch/watch-config/_config.js
@@ -4,6 +4,9 @@ const path = require('path');
 let configFile;
 let currentlyBundling;
 
+const updateConfigDelayed = (content) =>
+	setTimeout(() => fs.writeFileSync(configFile, content), 50);
+
 module.exports = {
 	description: 'watches the config file',
 	command: 'rollup -cw',
@@ -17,8 +20,7 @@ module.exports = {
 			return false;
 		}
 		if (data.includes('Config contains initial errors')) {
-			fs.writeFileSync(
-				configFile,
+			updateConfigDelayed(
 				'export default {\n' +
 					'\tinput: "main1.js",\n' +
 					'\toutput: {\n' +
@@ -30,8 +32,7 @@ module.exports = {
 			return false;
 		}
 		if (data.includes('Config contains further errors')) {
-			fs.writeFileSync(
-				configFile,
+			updateConfigDelayed(
 				'export default {\n' +
 					'\tinput: ["main2.js", "main3.js"],\n' +
 					'\toutput: {\n' +
@@ -45,13 +46,12 @@ module.exports = {
 		if (data.includes('created _actual')) {
 			switch (currentlyBundling) {
 				case 'main1.js':
-					fs.writeFileSync(configFile, 'throw new Error("Config contains further errors");');
+					updateConfigDelayed('throw new Error("Config contains further errors");');
 					return false;
 				case 'main2.js, main3.js':
-					fs.writeFileSync(
-						configFile,
+					updateConfigDelayed(
 						'export default {\n' +
-							'\tinput: {output1: "main4.js"},\n' +
+							'\tinput: {output: "main4.js"},\n' +
 							'\toutput: {\n' +
 							'\t\tdir: "_actual",\n' +
 							'\t\tformat: "es"\n' +
@@ -60,43 +60,8 @@ module.exports = {
 					);
 					return false;
 				case 'main4.js':
-					currentlyBundling = 'preparing main5.js';
-					fs.writeFileSync(
-						configFile,
-						'export default {\n' +
-							'\tinput: {output2: "main5.js"},\n' +
-							'\toutput: {\n' +
-							'\t\tdir: "_actual",\n' +
-							'\t\tformat: "es"\n' +
-							'\t}\n' +
-							'};'
-					);
-					return false;
-				case 'main6.js':
-					fs.writeFileSync(
-						configFile,
-						'export default {\n' +
-							'\tinput: {output3: "main6.js"},\n' +
-							'\toutput: {\n' +
-							'\t\tdir: "_actual",\n' +
-							'\t\tformat: "es"\n' +
-							'\t}\n' +
-							'};'
-					);
 					return true;
 			}
 		}
-		if (data.includes('Reloading updated config') && currentlyBundling === 'preparing main5.js') {
-			fs.writeFileSync(
-				configFile,
-				'export default {\n' +
-					'\tinput: {output3: "main6.js"},\n' +
-					'\toutput: {\n' +
-					'\t\tdir: "_actual",\n' +
-					'\t\tformat: "es"\n' +
-					'\t}\n' +
-					'};'
-			);
-		}
 	},
 };
diff --git a/test/cli/samples/watch/watch-config/_expected/output1.js b/test/cli/samples/watch/watch-config/_expected/output.js
similarity index 100%
rename from test/cli/samples/watch/watch-config/_expected/output1.js
rename to test/cli/samples/watch/watch-config/_expected/output.js
diff --git a/test/cli/samples/watch/watch-config/main5.js b/test/cli/samples/watch/watch-config/main5.js
deleted file mode 100644
index f3ae9b95c72..00000000000
--- a/test/cli/samples/watch/watch-config/main5.js
+++ /dev/null
@@ -1 +0,0 @@
-export const foo = 46;
diff --git a/test/cli/samples/watch/watch-config/main6.js b/test/cli/samples/watch/watch-config/main6.js
deleted file mode 100644
index 927270a3a6b..00000000000
--- a/test/cli/samples/watch/watch-config/main6.js
+++ /dev/null
@@ -1 +0,0 @@
-export const foo = 47;
diff --git a/test/cli/samples/watch/watch-config/rollup.config.js b/test/cli/samples/watch/watch-config/rollup.config.js
index dfda9d9c97f..2f5615a36b2 100644
--- a/test/cli/samples/watch/watch-config/rollup.config.js
+++ b/test/cli/samples/watch/watch-config/rollup.config.js
@@ -1,5 +1,5 @@
 export default {
-	input: {output3: "main6.js"},
+	input: {output: "main4.js"},
 	output: {
 		dir: "_actual",
 		format: "es"