diff --git a/lib/utils/compose_ts.ts b/lib/utils/compose_ts.ts
index 91289f51..cd4552a5 100644
--- a/lib/utils/compose_ts.ts
+++ b/lib/utils/compose_ts.ts
@@ -552,7 +552,7 @@ async function loadBuildMetatada(
  * @param sourceDir Project source directory (project root)
  * @param composition Optional previously parsed composition object
  */
-async function getServiceDirsFromComposition(
+export async function getServiceDirsFromComposition(
 	sourceDir: string,
 	composition?: Composition,
 ): Promise<Dictionary<string>> {
diff --git a/lib/utils/device/live.ts b/lib/utils/device/live.ts
index bf77747f..ca106f0b 100644
--- a/lib/utils/device/live.ts
+++ b/lib/utils/device/live.ts
@@ -20,6 +20,8 @@ import {
 import { BuildError } from './errors';
 import { getServiceColourFn } from './logs';
 import { delay } from '../helpers';
+import { getServiceDirsFromComposition } from '../compose_ts';
+import { getDockerignoreByDir } from '../ignore';
 
 // How often do we want to check the device state
 // engine has settled (delay in ms)
@@ -162,11 +164,31 @@ export class LivepushManager {
 					eventQueue.push(changedPath);
 					this.getDebouncedEventHandler(serviceName)();
 				};
+
+				// Prepare dockerignore data for file watcher
+				const serviceDirsByService = this.deployOpts.multiDockerignore
+					? await getServiceDirsFromComposition(
+							this.deployOpts.source,
+							this.composition,
+					  )
+					: {};
+				const { ignoreByDir, serviceDirs } = await getDockerignoreByDir(
+					this.deployOpts.source,
+					serviceDirsByService,
+				);
+
 				// TODO: Memoize this for containers which share a context
 				const monitor = chokidar.watch('.', {
 					cwd: context,
 					ignoreInitial: true,
-					ignored: '.git',
+					ignored: (filePath: string) => {
+						for (const dir of serviceDirs) {
+							if (filePath.startsWith(dir)) {
+								return ignoreByDir[dir].ignores(filePath.substring(dir.length));
+							}
+						}
+						return ignoreByDir['.'].ignores(filePath);
+					},
 				});
 				monitor.on('add', (changedPath: string) =>
 					addEvent(this.updateEventsWaiting[serviceName], changedPath),
diff --git a/lib/utils/ignore.ts b/lib/utils/ignore.ts
index 8a1c5883..cdd5995a 100644
--- a/lib/utils/ignore.ts
+++ b/lib/utils/ignore.ts
@@ -21,6 +21,7 @@ import * as MultiBuild from 'resin-multibuild';
 
 import dockerIgnore = require('@zeit/dockerignore');
 import ignore from 'ignore';
+import { Ignore } from '@balena/dockerignore';
 
 import { ExpectedError } from '../errors';
 
@@ -254,7 +255,7 @@ async function readDockerIgnoreFile(projectDir: string): Promise<string> {
  * a set of default/hardcoded patterns.
  * @param directory Directory where to look for a .dockerignore file
  */
-async function getDockerIgnoreInstance(
+export async function getDockerIgnoreInstance(
 	directory: string,
 ): Promise<import('@balena/dockerignore').Ignore> {
 	const dockerIgnoreStr = await readDockerIgnoreFile(directory);
@@ -295,25 +296,10 @@ export async function filterFilesWithDockerignore(
 	projectDir: string,
 	serviceDirsByService?: ServiceDirs,
 ): Promise<{ filteredFileList: FileStats[]; dockerignoreFiles: FileStats[] }> {
-	// path.resolve() also converts forward slashes to backslashes on Windows
-	projectDir = path.resolve(projectDir);
-	// ignoreByDir stores an instance of the dockerignore filter for each service dir
-	const ignoreByDir: {
-		[serviceDir: string]: import('@balena/dockerignore').Ignore;
-	} = {
-		'.': await getDockerIgnoreInstance(projectDir),
-	};
-	const serviceDirs: string[] = Object.values(serviceDirsByService || {})
-		// filter out the project source/root dir
-		.filter((dir) => dir && dir !== '.')
-		// add a trailing '/' (or '\' on Windows) to the path
-		.map((dir) => (dir.endsWith(path.sep) ? dir : dir + path.sep));
-
-	for (const serviceDir of serviceDirs) {
-		ignoreByDir[serviceDir] = await getDockerIgnoreInstance(
-			path.join(projectDir, serviceDir),
-		);
-	}
+	const { ignoreByDir, serviceDirs } = await getDockerignoreByDir(
+		projectDir,
+		serviceDirsByService,
+	);
 	const files = await listFiles(projectDir);
 	const dockerignoreFiles: FileStats[] = [];
 	const filteredFileList = files.filter((file: FileStats) => {
@@ -329,3 +315,38 @@ export async function filterFilesWithDockerignore(
 	});
 	return { filteredFileList, dockerignoreFiles };
 }
+
+/**
+ * Get dockerignore instances for root and all service directories in the project.
+ * Also return the list of service directories found.
+ * @param projectDir Source directory to
+ * @param serviceDirsByService Map of service names to their subdirectories.
+ */
+export async function getDockerignoreByDir(
+	projectDir: string,
+	serviceDirsByService?: ServiceDirs,
+): Promise<{
+	ignoreByDir: { [serviceDir: string]: Ignore };
+	serviceDirs: string[];
+}> {
+	// path.resolve() also converts forward slashes to backslashes on Windows
+	projectDir = path.resolve(projectDir);
+	// ignoreByDir stores an instance of the dockerignore filter for each service dir
+	const ignoreByDir: {
+		[serviceDir: string]: Ignore;
+	} = {
+		'.': await getDockerIgnoreInstance(projectDir),
+	};
+	const serviceDirs: string[] = Object.values(serviceDirsByService || {})
+		// filter out the project source/root dir
+		.filter((dir) => dir && dir !== '.')
+		// add a trailing '/' (or '\' on Windows) to the path
+		.map((dir) => (dir.endsWith(path.sep) ? dir : dir + path.sep));
+
+	for (const serviceDir of serviceDirs) {
+		ignoreByDir[serviceDir] = await getDockerIgnoreInstance(
+			path.join(projectDir, serviceDir),
+		);
+	}
+	return { serviceDirs, ignoreByDir };
+}