diff --git a/examples/with-sentry/next.config.js b/examples/with-sentry/next.config.js
index 272fef9c62884..7d5c90f380c5a 100644
--- a/examples/with-sentry/next.config.js
+++ b/examples/with-sentry/next.config.js
@@ -21,6 +21,7 @@ const COMMIT_SHA =
   VERCEL_BITBUCKET_COMMIT_SHA
 
 process.env.SENTRY_DSN = SENTRY_DSN
+const basePath = ''
 
 module.exports = withSourceMaps({
   serverRuntimeConfig: {
@@ -63,12 +64,12 @@ module.exports = withSourceMaps({
           include: '.next',
           ignore: ['node_modules'],
           stripPrefix: ['webpack://_N_E/'],
-          urlPrefix: '~/_next',
+          urlPrefix: `~${basePath}/_next`,
           release: COMMIT_SHA,
         })
       )
     }
-
     return config
   },
+  basePath,
 })
diff --git a/packages/next/build/webpack-config.ts b/packages/next/build/webpack-config.ts
index acfece465c8b5..18df99e10f9af 100644
--- a/packages/next/build/webpack-config.ts
+++ b/packages/next/build/webpack-config.ts
@@ -1121,10 +1121,68 @@ export default async function getBaseWebpackConfig(
 
     // Enable webpack 5 caching
     if (config.experimental.unstable_webpack5cache) {
-      webpackConfig.cache = {
+      const nextPublicVariables = Object.keys(process.env).reduce(
+        (prev: string, key: string) => {
+          if (key.startsWith('NEXT_PUBLIC_')) {
+            return `${prev}|${key}=${process.env[key]}`
+          }
+          return prev
+        },
+        ''
+      )
+      const nextEnvVariables = Object.keys(config.env).reduce(
+        (prev: string, key: string) => {
+          return `${prev}|${key}=${config.env[key]}`
+        },
+        ''
+      )
+
+      const configVars = JSON.stringify({
+        crossOrigin: config.crossOrigin,
+        pageExtensions: config.pageExtensions,
+        trailingSlash: config.trailingSlash,
+        modern: config.experimental.modern,
+        buildActivity: config.devIndicators.buildActivity,
+        autoPrerender: config.devIndicators.autoPrerender,
+        plugins: config.experimental.plugins,
+        reactStrictMode: config.reactStrictMode,
+        reactMode: config.experimental.reactMode,
+        optimizeFonts: config.experimental.optimizeFonts,
+        optimizeImages: config.experimental.optimizeImages,
+        scrollRestoration: config.experimental.scrollRestoration,
+        basePath: config.basePath,
+        pageEnv: config.experimental.pageEnv,
+        excludeDefaultMomentLocales: config.future.excludeDefaultMomentLocales,
+        assetPrefix: config.assetPrefix,
+        target,
+        reactProductionProfiling,
+      })
+
+      const cache: any = {
         type: 'filesystem',
+        // Includes:
+        //  - Next.js version
+        //  - NEXT_PUBLIC_ variable values (they affect caching) TODO: make this module usage only
+        //  - next.config.js `env` key
+        //  - next.config.js keys that affect compilation
+        version: `${process.env.__NEXT_VERSION}|${nextPublicVariables}|${nextEnvVariables}|${configVars}`,
+        buildDependencies: {
+          config: [],
+        },
         cacheDirectory: path.join(dir, '.next', 'cache', 'webpack'),
       }
+
+      // Adds `next.config.js` as a buildDependency when custom webpack config is provided
+      if (config.webpack && config.configFile) {
+        cache.buildDependencies = {
+          config: [config.configFile],
+        }
+      }
+
+      webpackConfig.cache = cache
+
+      // @ts-ignore TODO: remove ignore when webpack 5 is stable
+      webpackConfig.optimization.realContentHash = false
     }
   }
 
diff --git a/packages/next/next-server/server/config.ts b/packages/next/next-server/server/config.ts
index c9eefdca419a6..ac652280fb9f2 100644
--- a/packages/next/next-server/server/config.ts
+++ b/packages/next/next-server/server/config.ts
@@ -277,7 +277,11 @@ export default function loadConfig(
       )
     }
 
-    return assignDefaults({ configOrigin: CONFIG_FILE, ...userConfig })
+    return assignDefaults({
+      configOrigin: CONFIG_FILE,
+      configFile: path,
+      ...userConfig,
+    })
   } else {
     const configBaseName = basename(CONFIG_FILE, extname(CONFIG_FILE))
     const nonJsPath = findUp.sync(