diff --git a/packages/next/build/webpack-config.ts b/packages/next/build/webpack-config.ts
index 4fc297eb7b..f588b478ad 100644
--- a/packages/next/build/webpack-config.ts
+++ b/packages/next/build/webpack-config.ts
@@ -1032,6 +1032,9 @@ export default async function getBaseWebpackConfig(
                 loader: 'next-image-loader',
                 issuer: { not: regexLikeCss },
                 dependency: { not: ['url'] },
+                options: {
+                  isServer,
+                },
               },
             ]
           : []),
diff --git a/packages/next/build/webpack/loaders/next-image-loader.js b/packages/next/build/webpack/loaders/next-image-loader.js
index 49497f88ca..67538cc2ff 100644
--- a/packages/next/build/webpack/loaders/next-image-loader.js
+++ b/packages/next/build/webpack/loaders/next-image-loader.js
@@ -7,6 +7,7 @@ const BLUR_QUALITY = 70
 const VALID_BLUR_EXT = ['jpeg', 'png', 'webp']
 
 async function nextImageLoader(content) {
+  const isServer = loaderUtils.getOptions(this).isServer
   const context = this.rootContext
   const opts = { context, content }
   const interpolatedName = loaderUtils.interpolateName(
@@ -46,7 +47,9 @@ async function nextImageLoader(content) {
     blurDataURL,
   })
 
-  this.emitFile(interpolatedName, content, null)
+  if (!isServer) {
+    this.emitFile(interpolatedName, content, null)
+  }
 
   return `${'export default '} ${stringifiedData};`
 }
diff --git a/test/integration/image-component/default/pages/static.js b/test/integration/image-component/default/pages/static-img.js
similarity index 100%
rename from test/integration/image-component/default/pages/static.js
rename to test/integration/image-component/default/pages/static-img.js
diff --git a/test/integration/image-component/default/test/index.test.js b/test/integration/image-component/default/test/index.test.js
index 540383a260..b7d2bb98f8 100644
--- a/test/integration/image-component/default/test/index.test.js
+++ b/test/integration/image-component/default/test/index.test.js
@@ -15,6 +15,7 @@ import {
 } from 'next-test-utils'
 import webdriver from 'next-webdriver'
 import { join } from 'path'
+import { existsSync } from 'fs'
 
 jest.setTimeout(1000 * 80)
 
@@ -555,6 +556,13 @@ function runTests(mode) {
         /Image with src (.*)jpg(.*) is smaller than 40x40. Consider removing(.*)/gm
       )
     })
+  } else {
+    //server-only tests
+    it('should not create an image folder in server/chunks', async () => {
+      expect(
+        existsSync(join(appDir, '.next/server/chunks/static/image'))
+      ).toBeFalsy()
+    })
   }
 
   it('should correctly ignore prose styles', async () => {
diff --git a/test/integration/image-component/default/test/static.test.js b/test/integration/image-component/default/test/static.test.js
index 4649c0f9c1..abda89d835 100644
--- a/test/integration/image-component/default/test/static.test.js
+++ b/test/integration/image-component/default/test/static.test.js
@@ -18,7 +18,7 @@ let app
 let browser
 let html
 
-const indexPage = new File(join(appDir, 'pages/static.js'))
+const indexPage = new File(join(appDir, 'pages/static-img.js'))
 
 const runTests = () => {
   it('Should allow an image with a static src to omit height and width', async () => {
@@ -97,8 +97,8 @@ describe('Static Image Component Tests', () => {
     await nextBuild(appDir)
     appPort = await findPort()
     app = await nextStart(appDir, appPort)
-    html = await renderViaHTTP(appPort, '/static')
-    browser = await webdriver(appPort, '/static')
+    html = await renderViaHTTP(appPort, '/static-img')
+    browser = await webdriver(appPort, '/static-img')
   })
   afterAll(() => {
     killApp(app)