diff --git a/packages/@angular/cli/commands/serve.ts b/packages/@angular/cli/commands/serve.ts
index cd5b12358d3a..1550ff0d644e 100644
--- a/packages/@angular/cli/commands/serve.ts
+++ b/packages/@angular/cli/commands/serve.ts
@@ -135,6 +135,12 @@ const ServeCommand = Command.extend({
       commandOptions.vendorChunk = !commandOptions.buildOptimizer;
     }
 
+    // Default evalSourcemaps to true when sourcemaps are true.
+    // This makes rebuilds faster.
+    if (commandOptions.sourcemaps === true) {
+      commandOptions.evalSourcemaps = true;
+    }
+
     return checkPort(commandOptions.port, commandOptions.host, defaultPort)
       .then(port => {
         commandOptions.port = port;
diff --git a/packages/@angular/cli/models/build-options.ts b/packages/@angular/cli/models/build-options.ts
index 28cce0341396..98ed49d9cdd4 100644
--- a/packages/@angular/cli/models/build-options.ts
+++ b/packages/@angular/cli/models/build-options.ts
@@ -4,6 +4,7 @@ export interface BuildOptions {
   outputPath?: string;
   aot?: boolean;
   sourcemaps?: boolean;
+  evalSourcemaps?: boolean;
   vendorChunk?: boolean;
   commonChunk?: boolean;
   baseHref?: string;
diff --git a/packages/@angular/cli/models/webpack-configs/browser.ts b/packages/@angular/cli/models/webpack-configs/browser.ts
index bea9cfb97407..9a4aec0a677d 100644
--- a/packages/@angular/cli/models/webpack-configs/browser.ts
+++ b/packages/@angular/cli/models/webpack-configs/browser.ts
@@ -44,12 +44,22 @@ export function getBrowserConfig(wco: WebpackConfigOptions) {
   }
 
   if (buildOptions.sourcemaps) {
-    extraPlugins.push(new webpack.SourceMapDevToolPlugin({
-      filename: '[file].map[query]',
-      moduleFilenameTemplate: '[resource-path]',
-      fallbackModuleFilenameTemplate: '[resource-path]?[hash]',
-      sourceRoot: 'webpack:///'
-    }));
+    // See https://webpack.js.org/configuration/devtool/ for sourcemap types.
+    if (buildOptions.evalSourcemaps && buildOptions.target === 'development') {
+      // Produce eval sourcemaps for development with serve, which are faster.
+      extraPlugins.push(new webpack.EvalSourceMapDevToolPlugin({
+        moduleFilenameTemplate: '[resource-path]',
+        sourceRoot: 'webpack:///'
+      }));
+    } else {
+      // Produce full separate sourcemaps for production.
+      extraPlugins.push(new webpack.SourceMapDevToolPlugin({
+        filename: '[file].map[query]',
+        moduleFilenameTemplate: '[resource-path]',
+        fallbackModuleFilenameTemplate: '[resource-path]?[hash]',
+        sourceRoot: 'webpack:///'
+      }));
+    }
   }
 
   if (buildOptions.commonChunk) {
diff --git a/packages/@angular/cli/models/webpack-configs/common.ts b/packages/@angular/cli/models/webpack-configs/common.ts
index 732427a97deb..1395f2b350bd 100644
--- a/packages/@angular/cli/models/webpack-configs/common.ts
+++ b/packages/@angular/cli/models/webpack-configs/common.ts
@@ -188,9 +188,6 @@ export function getCommonConfig(wco: WebpackConfigOptions) {
     },
     module: {
       rules: [
-        { enforce: 'pre', test: /\.js$/, loader: 'source-map-loader', exclude: [
-          nodeModules, /\.ngfactory\.js$/, /\.ngstyle\.js$/
-        ] },
         { test: /\.html$/, loader: 'raw-loader' },
         { test: /\.(eot|svg|cur)$/, loader: `file-loader?name=[name]${hashFormat.file}.[ext]` },
         {
diff --git a/packages/@ngtools/webpack/src/angular_compiler_plugin.ts b/packages/@ngtools/webpack/src/angular_compiler_plugin.ts
index 811138ba4b0b..22eaa993a781 100644
--- a/packages/@ngtools/webpack/src/angular_compiler_plugin.ts
+++ b/packages/@ngtools/webpack/src/angular_compiler_plugin.ts
@@ -212,13 +212,17 @@ export class AngularCompilerPlugin implements Tapable {
       this._compilerOptions.sourceMap = true;
       this._compilerOptions.inlineSources = true;
       this._compilerOptions.inlineSourceMap = false;
-      this._compilerOptions.sourceRoot = basePath;
+      this._compilerOptions.mapRoot = undefined;
+      // We will set the source to the full path of the file in the loader, so we don't
+      // need sourceRoot here.
+      this._compilerOptions.sourceRoot = undefined;
     } else {
       this._compilerOptions.sourceMap = false;
       this._compilerOptions.sourceRoot = undefined;
       this._compilerOptions.inlineSources = undefined;
       this._compilerOptions.inlineSourceMap = undefined;
       this._compilerOptions.mapRoot = undefined;
+      this._compilerOptions.sourceRoot = undefined;
     }
 
     // Compose Angular Compiler Options.
diff --git a/packages/@ngtools/webpack/src/loader.ts b/packages/@ngtools/webpack/src/loader.ts
index e02a4609fea9..1d5074e74c38 100644
--- a/packages/@ngtools/webpack/src/loader.ts
+++ b/packages/@ngtools/webpack/src/loader.ts
@@ -14,6 +14,8 @@ interface Platform {
 const loaderUtils = require('loader-utils');
 const NormalModule = require('webpack/lib/NormalModule');
 
+const sourceMappingUrlRe = /^\/\/# sourceMappingURL=[^\r\n]*/gm;
+
 // This is a map of changes which need to be made
 const changeMap: {[key: string]: Platform} = {
   platformBrowserDynamic: {
@@ -544,6 +546,17 @@ export function ngcLoader(this: LoaderContext & { _compilation: any }, source: s
         .then(() => {
           timeEnd(timeLabel + '.ngcLoader.AngularCompilerPlugin');
           const result = plugin.getFile(sourceFileName);
+
+          if (result.sourceMap) {
+            // Process sourcemaps for Webpack.
+            // Remove the sourceMappingURL.
+            result.outputText = result.outputText.replace(sourceMappingUrlRe, '');
+            // Set the map source to use the full path of the file.
+            const sourceMap = JSON.parse(result.sourceMap);
+            sourceMap.sources[0] = sourceFileName;
+            result.sourceMap = JSON.stringify(sourceMap);
+          }
+
           if (plugin.failedCompilation) {
             // Return an empty string if there is no result to prevent extra loader errors.
             // Plugin errors were already pushed to the compilation errors.
@@ -551,12 +564,12 @@ export function ngcLoader(this: LoaderContext & { _compilation: any }, source: s
             cb(null, result.outputText || '', result.sourceMap);
           } else {
             timeEnd(timeLabel);
-          cb(null, result.outputText, result.sourceMap);
-        }
-      })
-      .catch(err => {
-        timeEnd(timeLabel + '.ngcLoader.AngularCompilerPlugin');
-        cb(err);
+            cb(null, result.outputText, result.sourceMap);
+          }
+        })
+        .catch(err => {
+          timeEnd(timeLabel + '.ngcLoader.AngularCompilerPlugin');
+          cb(err);
         });
     } else if (plugin instanceof AotPlugin) {
       time(timeLabel + '.ngcLoader.AotPlugin');
@@ -686,7 +699,7 @@ export function ngcLoader(this: LoaderContext & { _compilation: any }, source: s
 
     const result = refactor.transpile(compilerOptions);
     // Webpack is going to take care of this.
-    result.outputText = result.outputText.replace(/^\/\/# sourceMappingURL=[^\r\n]*/gm, '');
+    result.outputText = result.outputText.replace(sourceMappingUrlRe, '');
     timeEnd(timeLabel);
     cb(null, result.outputText, result.sourceMap);
   }