diff --git a/.changeset/lazy-forks-raise.md b/.changeset/lazy-forks-raise.md
new file mode 100644
index 00000000..8973c58a
--- /dev/null
+++ b/.changeset/lazy-forks-raise.md
@@ -0,0 +1,5 @@
+---
+"create-anywidget": patch
+---
+
+Set `ANYWIDGET_HMR=1` in demo notebook
diff --git a/packages/create-anywidget/create.js b/packages/create-anywidget/create.js
index 57d25264..5c8c1742 100644
--- a/packages/create-anywidget/create.js
+++ b/packages/create-anywidget/create.js
@@ -160,6 +160,13 @@ pip install ${name}
 let notebook = (name) =>
 	json_dumps({
 		"cells": [
+			{
+				"cell_type": "code",
+				"execution_count": null,
+				"metadata": {},
+				"outputs": [],
+				"source": ["%env ANYWIDGET_HMR=1"],
+			},
 			{
 				"cell_type": "code",
 				"execution_count": null,