diff --git a/addon/ng2/commands/serve.ts b/addon/ng2/commands/serve.ts
index 7834298335ff..c23ae850ad85 100644
--- a/addon/ng2/commands/serve.ts
+++ b/addon/ng2/commands/serve.ts
@@ -14,8 +14,7 @@ const defaultPort = process.env.PORT || 4200;
 export interface ServeTaskOptions {
   port?: number;
   host?: string;
-  proxy?: string;
-  insecureProxy?: boolean;
+  proxyConfig?: string;
   watcher?: string;
   liveReload?: boolean;
   liveReloadHost?: string;
@@ -37,9 +36,8 @@ module.exports = Command.extend({
 
   availableOptions: [
     { name: 'port',                 type: Number,  default: defaultPort,   aliases: ['p'] },
-    { name: 'host',                 type: String,  default: 'localhost',   aliases: ['H'],     description: 'Listens on localhost by default' },
-    { name: 'proxy',                type: String,                          aliases: ['pr', 'pxy'] },
-    { name: 'insecure-proxy',       type: Boolean, default: false,         aliases: ['inspr'], description: 'Set false to proxy self-signed SSL certificates' },
+    { name: 'host',                 type: String,  default: 'localhost',   aliases: ['H'],     description: 'Listens on all interfaces by default' },
+    { name: 'proxy-config',         type: 'Path',                          aliases: ['pc'] },
     { name: 'watcher',              type: String,  default: 'events',      aliases: ['w'] },
     { name: 'live-reload',          type: Boolean, default: true,          aliases: ['lr'] },
     { name: 'live-reload-host',     type: String,                          aliases: ['lrh'],   description: 'Defaults to host' },
diff --git a/addon/ng2/tasks/serve-webpack.ts b/addon/ng2/tasks/serve-webpack.ts
index f8e74662d785..1eb7de193478 100644
--- a/addon/ng2/tasks/serve-webpack.ts
+++ b/addon/ng2/tasks/serve-webpack.ts
@@ -1,5 +1,7 @@
+import * as fs from 'fs';
 import * as path from 'path';
 import * as chalk from 'chalk';
+import * as SilentError from 'silent-error';
 import * as Task from 'ember-cli/lib/models/task';
 import * as webpack from 'webpack';
 import * as WebpackDevServer from 'webpack-dev-server';
@@ -27,11 +29,23 @@ module.exports = Task.extend({
       colors: true
     }));
 
+    let proxyConfig = {};
+    if (commandOptions.proxyConfig) {
+      const proxyPath = path.resolve(this.project.root, commandOptions.proxyConfig);
+      if (fs.existsSync(proxyPath)) {
+        proxyConfig = require(proxyPath);
+      } else {
+         var message = 'Proxy config file ' + proxyPath + ' does not exist.';
+         return Promise.reject(new SilentError(message));
+      }
+    }
+
     const webpackDevServerConfiguration: IWebpackDevServerConfigurationOptions = {
       contentBase: config.output.path,
       historyApiFallback: true,
       stats: webpackDevServerOutputOptions,
-      inline: true
+      inline: true,
+      proxy: proxyConfig
     };
 
     const serveMessage:string = chalk.green(`\n*\n*\n NG Live Development Server is running on http://${commandOptions.host}:${commandOptions.port}.\n*\n*`);
diff --git a/tests/e2e/e2e_workflow.spec.js b/tests/e2e/e2e_workflow.spec.js
index 0ec50afe5d0f..cf00746044d1 100644
--- a/tests/e2e/e2e_workflow.spec.js
+++ b/tests/e2e/e2e_workflow.spec.js
@@ -11,6 +11,9 @@ var treeKill = require('tree-kill');
 var child_process = require('child_process');
 var ng = require('../helpers/ng');
 var root = path.join(process.cwd(), 'tmp');
+var express = require('express');
+var http = require('http');
+var request = require('request');
 
 function existsSync(path) {
   try {
@@ -564,6 +567,81 @@ describe('Basic end-to-end Workflow', function () {
         throw new Error(msg);
       });
   });
+
+  it('Serve with proxy config', function () {
+    this.timeout(240000);
+    var ngServePid;
+    var server;
+
+    function executor(resolve, reject) {
+      var startedProtractor = false;
+      var app = express();
+      server = http.createServer(app);
+      server.listen();
+      app.set('port', server.address().port);
+
+      app.get('/api/test', function (req, res) {
+        res.send('TEST_API_RETURN');
+      });
+      var backendHost = 'localhost';
+      var backendPort = server.address().port
+
+      var proxyServerUrl = `http://${backendHost}:${backendPort}`;
+      const proxyConfigFile = path.join(process.cwd(), 'proxy.config.json');
+      const proxyConfig = {
+        '/api/*': {
+          target: proxyServerUrl
+        }
+      };
+      fs.writeFileSync(proxyConfigFile, JSON.stringify(proxyConfig, null, 2), 'utf8');
+      var serveProcess = child_process.exec(`${ngBin} serve --proxy-config proxy.config.json`, { maxBuffer: 500 * 1024 });
+      ngServePid = serveProcess.pid;
+
+      serveProcess.stdout.on('data', (data) => {
+        if (/webpack: bundle is now VALID/.test(data.toString('utf-8')) && !startedProtractor) {
+
+          // How to get the url with out hardcoding here?
+          request( 'http://localhost:4200/api/test', function(err, response, body) {
+            expect(response.statusCode).to.be.equal(200);
+            expect(body).to.be.equal('TEST_API_RETURN');
+            resolve();
+          });
+        }
+      });
+
+      serveProcess.stderr.on('data', (data) => {
+        reject(data);
+      });
+      serveProcess.on('close', (code) => {
+        code === 0 ? resolve() : reject('ng serve command closed with error')
+      });
+    }
+
+    // Need a way to close the express server
+    return new Promise(executor)
+      .then(() => {
+        if (ngServePid) treeKill(ngServePid);
+        if(server){
+          server.close();
+        }
+      })
+      .catch((msg) => {
+        if (ngServePid) treeKill(ngServePid);
+        if(server){
+          server.close();
+        }
+        throw new Error(msg);
+      });
+  });
+
+  it('Serve fails on invalid proxy config file', function (done) {
+    this.timeout(420000);
+    sh.exec(`${ngBin} serve --proxy-config proxy.config.does_not_exist.json`, (code) => {
+      expect(code).to.not.equal(0);
+      done();
+    });
+  });
+
 });
 
 function isMobileTest() {