diff --git a/packages/abi-gen/CHANGELOG.json b/packages/abi-gen/CHANGELOG.json
index f0a4d200e8..8ed7e92309 100644
--- a/packages/abi-gen/CHANGELOG.json
+++ b/packages/abi-gen/CHANGELOG.json
@@ -1,4 +1,13 @@
 [
+    {
+        "version": "2.0.11",
+        "changes": [
+            {
+                "note": "Watch template files for changes",
+                "pr": 1875
+            }
+        ]
+    },
     {
         "timestamp": 1557507213,
         "version": "2.0.10",
diff --git a/packages/abi-gen/src/index.ts b/packages/abi-gen/src/index.ts
index 854dda4e0a..347ed6bd75 100644
--- a/packages/abi-gen/src/index.ts
+++ b/packages/abi-gen/src/index.ts
@@ -58,8 +58,12 @@ const args = yargs
         'Full usage example',
     ).argv;
 
-function registerPartials(partialsGlob: string): void {
-    const partialTemplateFileNames = globSync(partialsGlob);
+const mainTemplate = utils.getNamedContent(args.template);
+const template = Handlebars.compile<ContextData>(mainTemplate.content);
+const abiFileNames = globSync(args.abis);
+const partialTemplateFileNames = globSync(args.partials);
+
+function registerPartials(): void {
     logUtils.log(`Found ${chalk.green(`${partialTemplateFileNames.length}`)} ${chalk.bold('partial')} templates`);
     for (const partialTemplateFileName of partialTemplateFileNames) {
         const namedContent = utils.getNamedContent(partialTemplateFileName);
@@ -70,12 +74,7 @@ function registerPartials(partialsGlob: string): void {
 Handlebars.registerHelper('parameterType', utils.solTypeToTsType.bind(utils, ParamKind.Input, args.backend));
 Handlebars.registerHelper('assertionType', utils.solTypeToAssertion.bind(utils));
 Handlebars.registerHelper('returnType', utils.solTypeToTsType.bind(utils, ParamKind.Output, args.backend));
-if (args.partials) {
-    registerPartials(args.partials);
-}
-const mainTemplate = utils.getNamedContent(args.template);
-const template = Handlebars.compile<ContextData>(mainTemplate.content);
-const abiFileNames = globSync(args.abis);
+registerPartials();
 
 if (_.isEmpty(abiFileNames)) {
     logUtils.log(`${chalk.red(`No ABI files found.`)}`);
@@ -109,7 +108,7 @@ for (const abiFileName of abiFileNames) {
     const outFileName = utils.makeOutputFileName(namedContent.name);
     const outFilePath = `${args.output}/${outFileName}.ts`;
 
-    if (utils.isOutputFileUpToDate(abiFileName, outFilePath)) {
+    if (utils.isOutputFileUpToDate(outFilePath, [abiFileName, args.template, ...partialTemplateFileNames])) {
         logUtils.log(`Already up to date: ${chalk.bold(outFilePath)}`);
         continue;
     }
diff --git a/packages/abi-gen/src/utils.ts b/packages/abi-gen/src/utils.ts
index 5ac860d3d3..b2f642f5bd 100644
--- a/packages/abi-gen/src/utils.ts
+++ b/packages/abi-gen/src/utils.ts
@@ -138,11 +138,11 @@ export const utils = {
     writeOutputFile(filePath: string, renderedTsCode: string): void {
         fs.writeFileSync(filePath, renderedTsCode);
     },
-    isOutputFileUpToDate(abiFile: string, outputFile: string): boolean {
-        const abiFileModTimeMs = fs.statSync(abiFile).mtimeMs;
+    isOutputFileUpToDate(outputFile: string, sourceFiles: string[]): boolean {
+        const sourceFileModTimeMs = sourceFiles.map(file => fs.statSync(file).mtimeMs);
         try {
             const outFileModTimeMs = fs.statSync(outputFile).mtimeMs;
-            return outFileModTimeMs > abiFileModTimeMs;
+            return sourceFileModTimeMs.find(sourceMs => sourceMs > outFileModTimeMs) === undefined;
         } catch (err) {
             if (err.code === 'ENOENT') {
                 return false;
diff --git a/packages/abi-gen/test/utils_test.ts b/packages/abi-gen/test/utils_test.ts
index 820c0c675c..f13d2ab227 100644
--- a/packages/abi-gen/test/utils_test.ts
+++ b/packages/abi-gen/test/utils_test.ts
@@ -42,7 +42,7 @@ describe('writeOutputFile()', () => {
 
 describe('isOutputFileUpToDate()', () => {
     it('should throw ENOENT when there is no abi file', () => {
-        expect(utils.isOutputFileUpToDate.bind('nonexistant1', 'nonexistant2')).to.throw('ENOENT');
+        expect(utils.isOutputFileUpToDate.bind('', 'nonexistant1', ['nonexistant2'])).to.throw('ENOENT');
     });
 
     describe('when the abi input file exists', () => {
@@ -55,7 +55,7 @@ describe('isOutputFileUpToDate()', () => {
 
         describe('without an existing output file', () => {
             it('should return false', () => {
-                expect(utils.isOutputFileUpToDate(abiFile, 'nonexistant_file')).to.be.false();
+                expect(utils.isOutputFileUpToDate('nonexistant_file', [abiFile])).to.be.false();
             });
         });
 
@@ -71,7 +71,7 @@ describe('isOutputFileUpToDate()', () => {
             });
 
             it('should return true when output file is newer than abi file', async () => {
-                expect(utils.isOutputFileUpToDate(abiFile, outputFile)).to.be.true();
+                expect(utils.isOutputFileUpToDate(outputFile, [abiFile])).to.be.true();
             });
 
             it('should return false when output file exists but is older than abi file', () => {
@@ -79,7 +79,19 @@ describe('isOutputFileUpToDate()', () => {
                 const abiFileModTimeMs = outFileModTimeMs + 1;
                 fs.utimesSync(abiFile, abiFileModTimeMs, abiFileModTimeMs);
 
-                expect(utils.isOutputFileUpToDate(abiFile, outputFile)).to.be.false();
+                expect(utils.isOutputFileUpToDate(outputFile, [abiFile])).to.be.false();
+            });
+            it('should return false when any source file is newer than output file', () => {
+                const templateFile = tmp.fileSync(
+                    { discardDescriptor: true }, // close file (set timestamp)
+                ).name;
+
+                const templateFileModTimeMs = fs.statSync(outputFile).mtimeMs + 1;
+                const abiFileModTimeMs = fs.statSync(outputFile).mtimeMs;
+                fs.utimesSync(templateFile, templateFileModTimeMs, templateFileModTimeMs);
+                fs.utimesSync(abiFile, abiFileModTimeMs, abiFileModTimeMs);
+
+                expect(utils.isOutputFileUpToDate(outputFile, [abiFile, templateFile])).to.be.false();
             });
         });
     });