diff --git a/packages/next/src/client/app-index.tsx b/packages/next/src/client/app-index.tsx
index 9a8a45e8dea5c..005bc657faa3b 100644
--- a/packages/next/src/client/app-index.tsx
+++ b/packages/next/src/client/app-index.tsx
@@ -66,6 +66,16 @@ const getCacheKey = () => {
   return pathname + search
 }
 
+async function sha1(message: string) {
+  const arrayBuffer = await crypto.subtle.digest(
+    'SHA-1',
+    new TextEncoder().encode(message)
+  )
+  const data = Array.from(new Uint8Array(arrayBuffer))
+  const hex = data.map((b) => b.toString(16).padStart(2, '0')).join('')
+  return hex
+}
+
 const encoder = new TextEncoder()
 
 let initialServerDataBuffer: string[] | undefined = undefined
@@ -150,7 +160,32 @@ function useInitialServerResponse(cacheKey: string): Promise<JSX.Element> {
     },
   })
 
-  const newResponse = createFromReadableStream(readable)
+  const newResponse = createFromReadableStream(readable, {
+    async callServer(
+      metadata: {
+        id: string
+        name: string
+      },
+      args: any[]
+    ) {
+      const actionId = await sha1(metadata.id + ':' + metadata.name)
+
+      // Fetching the current url with the action header.
+      // TODO: Refactor this to look up from a manifest.
+      const res = await fetch('', {
+        method: 'POST',
+        headers: {
+          'Content-Type': 'application/json',
+          'Next-Action': actionId,
+        },
+        body: JSON.stringify({
+          bound: args,
+        }),
+      })
+
+      return res.json()
+    },
+  })
 
   rscCache.set(cacheKey, newResponse)
   return newResponse
diff --git a/packages/next/src/client/components/app-router-headers.ts b/packages/next/src/client/components/app-router-headers.ts
index 26886848a0ab8..8fc8a64c3b6f0 100644
--- a/packages/next/src/client/components/app-router-headers.ts
+++ b/packages/next/src/client/components/app-router-headers.ts
@@ -1,5 +1,5 @@
 export const RSC = 'RSC' as const
-export const ACTION = 'Action' as const
+export const ACTION = 'Next-Action' as const
 
 export const NEXT_ROUTER_STATE_TREE = 'Next-Router-State-Tree' as const
 export const NEXT_ROUTER_PREFETCH = 'Next-Router-Prefetch' as const
diff --git a/packages/next/src/server/app-render.tsx b/packages/next/src/server/app-render.tsx
index b619ccbe428d2..ba8930abe4db5 100644
--- a/packages/next/src/server/app-render.tsx
+++ b/packages/next/src/server/app-render.tsx
@@ -1703,20 +1703,33 @@ export async function renderToHTMLOrFlight(
     }
 
     // For action requests, we handle them differently with a sepcial render result.
-    if (isAction && process.env.NEXT_RUNTIME !== 'edge') {
-      const workerName = 'app' + renderOpts.pathname
-      const actionModId = serverActionsManifest[actionId].workers[workerName]
+    if (isAction) {
+      if (process.env.NEXT_RUNTIME !== 'edge') {
+        const workerName = 'app' + renderOpts.pathname
+        const actionModId = serverActionsManifest[actionId].workers[workerName]
 
-      const { parseBody } =
-        require('./api-utils/node') as typeof import('./api-utils/node')
-      const actionData = (await parseBody(req, '1mb')) || {}
+        const { parseBody } =
+          require('./api-utils/node') as typeof import('./api-utils/node')
+        const actionData = (await parseBody(req, '1mb')) || {}
 
-      const actionHandler =
-        ComponentMod.__next_app_webpack_require__(actionModId).default
+        const actionHandler =
+          ComponentMod.__next_app_webpack_require__(actionModId).default
 
-      return new ActionRenderResult(
-        JSON.stringify(await actionHandler(actionId, actionData.bound || []))
-      )
+        try {
+          return new ActionRenderResult(
+            JSON.stringify(
+              await actionHandler(actionId, actionData.bound || [])
+            )
+          )
+        } catch (err) {
+          if (isRedirectError(err)) {
+            throw new Error('Invariant: not implemented.')
+          }
+          throw err
+        }
+      } else {
+        throw new Error('Not implemented in Edge Runtime.')
+      }
     }
 
     // Below this line is handling for rendering to HTML.
diff --git a/test/e2e/app-dir/actions/app-action.test.ts b/test/e2e/app-dir/actions/app-action.test.ts
new file mode 100644
index 0000000000000..a4a7e173e5bae
--- /dev/null
+++ b/test/e2e/app-dir/actions/app-action.test.ts
@@ -0,0 +1,38 @@
+import { createNextDescribe } from 'e2e-utils'
+import { check } from 'next-test-utils'
+
+createNextDescribe(
+  'app-dir action handling',
+  {
+    files: __dirname,
+    skipDeployment: true,
+  },
+  ({ next, isNextDev }) => {
+    if (!isNextDev) {
+      it('should create the server reference manifest', async () => {
+        const content = await next.readFile(
+          '.next/server/server-reference-manifest.json'
+        )
+        // Make sure it's valid JSON
+        JSON.parse(content)
+        expect(content.length > 0).toBeTrue()
+      })
+    }
+
+    // TODO: Ensure this works in production.
+    if (isNextDev) {
+      it('should handle basic actions correctly', async () => {
+        const browser = await next.browser('/server')
+
+        const cnt = await browser.elementByCss('h1').text()
+        expect(cnt).toBe('0')
+
+        await browser.elementByCss('#inc').click()
+        await check(() => browser.elementByCss('h1').text(), '1')
+
+        await browser.elementByCss('#dec').click()
+        await check(() => browser.elementByCss('h1').text(), '0')
+      })
+    }
+  }
+)
diff --git a/test/e2e/app-dir/actions/app/layout.js b/test/e2e/app-dir/actions/app/layout.js
new file mode 100644
index 0000000000000..6d7e1ed585862
--- /dev/null
+++ b/test/e2e/app-dir/actions/app/layout.js
@@ -0,0 +1,8 @@
+export default function RootLayout({ children }) {
+  return (
+    <html>
+      <head />
+      <body>{children}</body>
+    </html>
+  )
+}
diff --git a/test/e2e/app-dir/actions/app/server/actions.js b/test/e2e/app-dir/actions/app/server/actions.js
new file mode 100644
index 0000000000000..fdd9f22f3a658
--- /dev/null
+++ b/test/e2e/app-dir/actions/app/server/actions.js
@@ -0,0 +1,9 @@
+'use server'
+
+export async function inc(value) {
+  return value + 1
+}
+
+export async function dec(value) {
+  return value - 1
+}
diff --git a/test/e2e/app-dir/actions/app/server/counter.js b/test/e2e/app-dir/actions/app/server/counter.js
new file mode 100644
index 0000000000000..b685677ac72ab
--- /dev/null
+++ b/test/e2e/app-dir/actions/app/server/counter.js
@@ -0,0 +1,31 @@
+'use client'
+
+import { useState } from 'react'
+
+export default function Counter({ inc, dec }) {
+  const [count, setCount] = useState(0)
+
+  return (
+    <div>
+      <h1>{count}</h1>
+      <button
+        id="inc"
+        onClick={async () => {
+          const newCount = await inc(count)
+          setCount(newCount)
+        }}
+      >
+        +1
+      </button>
+      <button
+        id="dec"
+        onClick={async () => {
+          const newCount = await dec(count)
+          setCount(newCount)
+        }}
+      >
+        -1
+      </button>
+    </div>
+  )
+}
diff --git a/test/e2e/app-dir/actions/app/server/page.js b/test/e2e/app-dir/actions/app/server/page.js
new file mode 100644
index 0000000000000..7e6f7f73233d9
--- /dev/null
+++ b/test/e2e/app-dir/actions/app/server/page.js
@@ -0,0 +1,7 @@
+import Counter from './counter'
+
+import { inc, dec } from './actions'
+
+export default function Page() {
+  return <Counter inc={inc} dec={dec} />
+}
diff --git a/test/e2e/app-dir/actions/next.config.js b/test/e2e/app-dir/actions/next.config.js
new file mode 100644
index 0000000000000..cfa3ac3d7aa94
--- /dev/null
+++ b/test/e2e/app-dir/actions/next.config.js
@@ -0,0 +1,5 @@
+module.exports = {
+  experimental: {
+    appDir: true,
+  },
+}