diff --git a/packages/react-dev-utils/package.json b/packages/react-dev-utils/package.json
index db7114a261a..59cf72bc98b 100644
--- a/packages/react-dev-utils/package.json
+++ b/packages/react-dev-utils/package.json
@@ -53,5 +53,11 @@
     "sockjs-client": "1.1.4",
     "strip-ansi": "3.0.1",
     "text-table": "0.2.0"
+  },
+  "devDependencies": {
+    "jest": "20.0.4"
+  },
+  "scripts": {
+    "test": "jest"
   }
 }
diff --git a/packages/react-dev-utils/src/__tests__/ignoredFiles.test.js b/packages/react-dev-utils/src/__tests__/ignoredFiles.test.js
new file mode 100644
index 00000000000..6feed979797
--- /dev/null
+++ b/packages/react-dev-utils/src/__tests__/ignoredFiles.test.js
@@ -0,0 +1,55 @@
+/**
+ * Copyright (c) 2015-present, Facebook, Inc.
+ *
+ * This source code is licensed under the MIT license found in the
+ * LICENSE file in the root directory of this source tree.
+ */
+
+'use strict';
+
+const ignoredFiles = require('../ignoredFiles');
+
+describe('ignore watch files regex', () => {
+  it('normal file', () => {
+    const appSrc = '/root/src/';
+    const isIgnored = ignoredFiles(appSrc).test('/foo');
+    const isIgnoredInSrc = ignoredFiles(appSrc).test('/root/src/foo');
+
+    expect(isIgnored).toBe(false);
+    expect(isIgnoredInSrc).toBe(false);
+  });
+
+  it('node modules', () => {
+    const appSrc = '/root/src/';
+    const isIgnored = ignoredFiles(appSrc).test('/root/node_modules/foo');
+
+    expect(isIgnored).toBe(true);
+  });
+
+  it('node modules inside source directory', () => {
+    const appSrc = '/root/src/';
+    const isIgnored = ignoredFiles(appSrc).test('/root/src/node_modules/foo');
+    const isIgnoredMoreThanOneLevel = ignoredFiles(appSrc).test(
+      '/root/src/bar/node_modules/foo'
+    );
+
+    expect(isIgnored).toBe(false);
+    expect(isIgnoredMoreThanOneLevel).toBe(false);
+  });
+
+  it('path contains source directory', () => {
+    const appSrc = '/root/src/';
+    const isIgnored = ignoredFiles(appSrc).test(
+      '/bar/root/src/node_modules/foo'
+    );
+
+    expect(isIgnored).toBe(true);
+  });
+
+  it('path starts with source directory', () => {
+    const appSrc = '/root/src/';
+    const isIgnored = ignoredFiles(appSrc).test('/root/src2/node_modules/foo');
+
+    expect(isIgnored).toBe(true);
+  });
+});
diff --git a/packages/react-dev-utils/ignoredFiles.js b/packages/react-dev-utils/src/ignoredFiles.js
similarity index 100%
rename from packages/react-dev-utils/ignoredFiles.js
rename to packages/react-dev-utils/src/ignoredFiles.js
diff --git a/packages/react-scripts/config/webpackDevServer.config.js b/packages/react-scripts/config/webpackDevServer.config.js
index 80684538f9a..6e929a84f6f 100644
--- a/packages/react-scripts/config/webpackDevServer.config.js
+++ b/packages/react-scripts/config/webpackDevServer.config.js
@@ -10,7 +10,7 @@
 
 const errorOverlayMiddleware = require('react-dev-utils/errorOverlayMiddleware');
 const noopServiceWorkerMiddleware = require('react-dev-utils/noopServiceWorkerMiddleware');
-const ignoredFiles = require('react-dev-utils/ignoredFiles');
+const ignoredFiles = require('react-dev-utils/src/ignoredFiles');
 const config = require('./webpack.config.dev');
 const paths = require('./paths');