diff --git a/packages/core/parcel/src/Bundler.js b/packages/core/parcel/src/Bundler.js
index c9e4f900bd58..4750921e1816 100644
--- a/packages/core/parcel/src/Bundler.js
+++ b/packages/core/parcel/src/Bundler.js
@@ -64,10 +64,7 @@ class Bundler extends EventEmitter {
   normalizeOptions(options) {
     const isProduction =
       options.production || process.env.NODE_ENV === 'production';
-    const publicURL =
-      options.publicUrl ||
-      options.publicURL ||
-      '/' + Path.basename(options.outDir || 'dist');
+    const publicURL = options.publicUrl || options.publicURL || '/';
     const watch =
       typeof options.watch === 'boolean' ? options.watch : !isProduction;
     const target = options.target || 'browser';
diff --git a/packages/core/parcel/test/contentHashing.js b/packages/core/parcel/test/contentHashing.js
index 1f2800c902a7..19d67e6a476e 100644
--- a/packages/core/parcel/test/contentHashing.js
+++ b/packages/core/parcel/test/contentHashing.js
@@ -19,7 +19,7 @@ describe('content hashing', function() {
 
     let html = fs.readFileSync(__dirname + '/dist/index.html', 'utf8');
     let filename = html.match(
-      /<link rel="stylesheet" href="[/\\]{1}dist[/\\]{1}(input\.[a-f0-9]+\.css)">/
+      /<link rel="stylesheet" href="[/\\]{1}(input\.[a-f0-9]+\.css)">/
     )[1];
     assert(fs.existsSync(__dirname + '/dist/' + filename));
 
@@ -34,7 +34,7 @@ describe('content hashing', function() {
 
     html = fs.readFileSync(__dirname + '/dist/index.html', 'utf8');
     let newFilename = html.match(
-      /<link rel="stylesheet" href="[/\\]{1}dist[/\\]{1}(input\.[a-f0-9]+\.css)">/
+      /<link rel="stylesheet" href="[/\\]{1}(input\.[a-f0-9]+\.css)">/
     )[1];
     assert(fs.existsSync(__dirname + '/dist/' + newFilename));
 
@@ -49,7 +49,7 @@ describe('content hashing', function() {
     });
 
     let js = fs.readFileSync(__dirname + '/dist/index.js', 'utf8');
-    let filename = js.match(/\/dist\/(test\.[0-9a-f]+\.txt)/)[1];
+    let filename = js.match(/\/(test\.[0-9a-f]+\.txt)/)[1];
     assert(fs.existsSync(__dirname + '/dist/' + filename));
 
     fs.writeFileSync(__dirname + '/input/test.txt', 'hello world');
@@ -59,7 +59,7 @@ describe('content hashing', function() {
     });
 
     js = fs.readFileSync(__dirname + '/dist/index.js', 'utf8');
-    let newFilename = js.match(/\/dist\/(test\.[0-9a-f]+\.txt)/)[1];
+    let newFilename = js.match(/\/(test\.[0-9a-f]+\.txt)/)[1];
     assert(fs.existsSync(__dirname + '/dist/' + newFilename));
 
     assert.notEqual(filename, newFilename);
diff --git a/packages/core/parcel/test/html.js b/packages/core/parcel/test/html.js
index 954f6b653fe3..e5216670afae 100644
--- a/packages/core/parcel/test/html.js
+++ b/packages/core/parcel/test/html.js
@@ -142,7 +142,7 @@ describe('html', function() {
 
     let html = fs.readFileSync(__dirname + '/dist/index.html');
     assert(
-      /<link rel="stylesheet" href="[/\\]{1}dist[/\\]{1}html-css\.[a-f0-9]+\.css">/.test(
+      /<link rel="stylesheet" href="[/\\]{1}html-css\.[a-f0-9]+\.css">/.test(
         html
       )
     );
@@ -174,7 +174,7 @@ describe('html', function() {
 
     let html = fs.readFileSync(__dirname + '/dist/index.html');
     assert(
-      /<html>\s*<link rel="stylesheet" href="[/\\]{1}dist[/\\]{1}html-css-head\.[a-f0-9]+\.css">\s*<body>/.test(
+      /<html>\s*<link rel="stylesheet" href="[/\\]{1}html-css-head\.[a-f0-9]+\.css">\s*<body>/.test(
         html
       )
     );
@@ -212,9 +212,7 @@ describe('html', function() {
     });
 
     let html = fs.readFileSync(__dirname + '/dist/index.html');
-    assert(
-      /<script src="[/\\]{1}dist[/\\]{1}html-css-js\.[a-f0-9]+\.js">/.test(html)
-    );
+    assert(/<script src="[/\\]{1}html-css-js\.[a-f0-9]+\.js">/.test(html));
   });
 
   it('should insert sibling bundles at correct location in tree when optional elements are absent', async function() {
@@ -249,7 +247,7 @@ describe('html', function() {
 
     let html = fs.readFileSync(__dirname + '/dist/index.html');
     assert(
-      /<\/script>\s*<link rel="stylesheet" href="[/\\]{1}dist[/\\]{1}html-css-optional-elements\.[a-f0-9]+\.css"><h1>Hello/.test(
+      /<\/script>\s*<link rel="stylesheet" href="[/\\]{1}html-css-optional-elements\.[a-f0-9]+\.css"><h1>Hello/.test(
         html
       )
     );
diff --git a/packages/core/parcel/test/javascript.js b/packages/core/parcel/test/javascript.js
index 9704a5d11b49..20ab7533ffd2 100644
--- a/packages/core/parcel/test/javascript.js
+++ b/packages/core/parcel/test/javascript.js
@@ -307,8 +307,8 @@ describe('javascript', function() {
 
     let output = run(b);
     assert.equal(typeof output, 'function');
-    assert(/^\/dist\/test\.[0-9a-f]+\.txt$/.test(output()));
-    assert(fs.existsSync(__dirname + output()));
+    assert(/^\/test\.[0-9a-f]+\.txt$/.test(output()));
+    assert(fs.existsSync(__dirname + '/dist/' + output()));
   });
 
   it('should minify JS in production mode', async function() {
diff --git a/packages/core/parcel/test/server.js b/packages/core/parcel/test/server.js
index f085414ccb43..8bb5ce60de98 100644
--- a/packages/core/parcel/test/server.js
+++ b/packages/core/parcel/test/server.js
@@ -42,7 +42,7 @@ describe('server', function() {
     let b = bundler(__dirname + '/integration/commonjs/index.js');
     server = await b.serve(0);
 
-    let data = await get('/dist/index.js');
+    let data = await get('/index.js');
     assert.equal(data, fs.readFileSync(__dirname + '/dist/index.js', 'utf8'));
   });
 
@@ -63,7 +63,7 @@ describe('server', function() {
 
     let threw = false;
     try {
-      await get('/dist/fake.js');
+      await get('/fake.js');
     } catch (err) {
       threw = true;
     }
@@ -92,7 +92,7 @@ describe('server', function() {
     let b = bundler(__dirname + '/integration/commonjs/index.js');
     server = await b.serve(0, true);
 
-    let data = await get('/dist/index.js', https);
+    let data = await get('/index.js', https);
     assert.equal(data, fs.readFileSync(__dirname + '/dist/index.js', 'utf8'));
   });
 
@@ -103,7 +103,17 @@ describe('server', function() {
       cert: __dirname + '/integration/https/primary.crt'
     });
 
-    let data = await get('/dist/index.js', https);
+    let data = await get('/index.js', https);
+    assert.equal(data, fs.readFileSync(__dirname + '/dist/index.js', 'utf8'));
+  });
+
+  it('should support setting a public url', async function() {
+    let b = bundler(__dirname + '/integration/commonjs/index.js', {
+      publicUrl: '/dist'
+    });
+    server = await b.serve(0);
+
+    let data = await get('/dist/index.js');
     assert.equal(data, fs.readFileSync(__dirname + '/dist/index.js', 'utf8'));
   });
 
diff --git a/packages/core/parcel/test/typescript.js b/packages/core/parcel/test/typescript.js
index 654a429806bc..228698630722 100644
--- a/packages/core/parcel/test/typescript.js
+++ b/packages/core/parcel/test/typescript.js
@@ -69,8 +69,8 @@ describe('typescript', function() {
 
     let output = run(b);
     assert.equal(typeof output.getRaw, 'function');
-    assert(/^\/dist\/test\.[0-9a-f]+\.txt$/.test(output.getRaw()));
-    assert(fs.existsSync(__dirname + output.getRaw()));
+    assert(/^\/test\.[0-9a-f]+\.txt$/.test(output.getRaw()));
+    assert(fs.existsSync(__dirname + '/dist/' + output.getRaw()));
   });
 
   it('should minify in production mode', async function() {
