diff --git a/cli/start.js b/cli/start.js
index a7baa15e..0b3c8560 100644
--- a/cli/start.js
+++ b/cli/start.js
@@ -57,7 +57,10 @@ function getHtmlHandler (htmlSettings, entryFile, id) {
         _appendHtml: [
           '<script>',
           'var application = require(\'' + entryFile + '\')',
-          'var tree = application().start(\'[data-bankai="' + id + '"]\')',
+          'var app = application(window.__BANKAI_GLOBAL_STATE_HOOK__, {',
+          '  onStateChange: function(data, state) { window.__BANKAI_GLOBAL_STATE_HOOK__ = state }',
+          '})',
+          'var tree = app.start(\'[data-bankai="' + id + '"]\')',
           'if (tree) {',
           '  document.body.appendChild(tree)',
           '}',
@@ -89,7 +92,7 @@ function start (options, cb) {
   if (settings.html) {
     const id = ['bankai'].concat(projectNameGenerator().raw).join('-')
     const html = getHtmlHandler(settings.html, entryFile, id)
-    router.on('/', html)
+    router.on('/:path', html)
   }
 
   if (settings.css) {
diff --git a/client-hmr.js b/client-hmr.js
new file mode 100644
index 00000000..a6d550c6
--- /dev/null
+++ b/client-hmr.js
@@ -0,0 +1,70 @@
+// var request = require('request')
+var nanoajax = require('nanoajax')
+// var yo = require('yo-yo')
+
+// script injected in development mode
+function updateStream (target, callback) {
+  var es = new window.EventSource(target)
+
+  es.addEventListener('message', function (e) {
+    nanoajax.ajax({url: target}, function (code, text) {
+      callback(null, text)
+    })
+  })
+}
+
+function toArray (list) {
+  return Array.prototype.slice.call(list)
+}
+
+function main () {
+  var scripts = toArray(document.querySelectorAll('script[data-bankai-hmr]'))
+  var styles = toArray(document.querySelectorAll('link[data-bankai-hmr]'))
+
+  scripts.forEach(function (script) {
+    updateStream(script.src, function (error, data) {
+      if (error) {
+        console.error(error)
+      }
+      var el = document.createElement('script')
+      var prev = document.querySelector('[data-bankai-hmr-copy="' + script.src + '"]')
+      el.text = data
+      el.setAttribute('data-bankai-hmr-copy', script.src)
+
+      if (prev) {
+        prev.parentNode.replaceChild(el, prev)
+      } else {
+        script.parentNode.insertBefore(el, script.nextSibling)
+      }
+
+      var id = script.dataset.bankaiHmr
+      var application = require(id)
+      var app = application(window.__BANKAI_GLOBAL_STATE_HOOK__, {
+        onStateChange: function (data, state) { window.__BANKAI_GLOBAL_STATE_HOOK__ = state }
+      })
+      var tree = app.start()
+      document.body.replaceChild(tree, document.body.firstChild)
+      // yo.update(old, tree)
+    })
+  })
+
+  styles.forEach(function (style) {
+    updateStream(style.href, function (error, data) {
+      if (error) {
+        console.error(error)
+      }
+      var el = document.createElement('style')
+      var prev = document.querySelector('[data-bankai-hmr-copy="' + style.href + '"]')
+      el.setAttribute('data-bankai-hmr-copy', style.href)
+      el.appendChild(document.createTextNode(data))
+
+      if (prev) {
+        prev.parentNode.replaceChild(el, prev)
+      } else {
+        style.parentNode.insertBefore(el, style.nextSibling)
+      }
+    })
+  })
+}
+
+main()
diff --git a/example/basic/index.css b/example/basic/index.css
index ccf22a05..adc68fa6 100644
--- a/example/basic/index.css
+++ b/example/basic/index.css
@@ -1,3 +1,3 @@
 h1 {
-  color: blue;
+  color: red;
 }
diff --git a/example/basic/index.js b/example/basic/index.js
index ebb64d8c..e34cdb45 100644
--- a/example/basic/index.js
+++ b/example/basic/index.js
@@ -1,15 +1,20 @@
 const choo = require('choo')
 const html = require('choo/html')
 const sheetify = require('sheetify')
+const xtend = require('xtend')
 
 sheetify('normalize.css')
 const sheet = sheetify('./index.css')
 
-function createApplication () {
+function createApplication (state, use) {
+  const initial = state || {}
+  const middleware = use || {}
   const application = choo()
 
+  application.use(middleware)
+
   application.model({
-    state: { title: 'Not quite set yet!' },
+    state: xtend({}, {title: 'Not quite set yet!'}, initial),
     reducers: {
       update: (data, state) => ({ title: data })
     }
@@ -20,6 +25,7 @@ function createApplication () {
       <h1>Title: ${state.title}</h1>
       <input
         type="text"
+        value=${state.title}
         oninput=${(e) => send('update', e.target.value)}/>
       <button>Hello!</button>
     </main>
@@ -30,8 +36,8 @@ function createApplication () {
       <h1>Test: ${state.title}</h1>
       <input
         type="text"
+        value="${state.title}"
         oninput=${(e) => send('update', e.target.value)}/>
-      <button>Hello!</button>
     </main>
   `
 
diff --git a/example/basic/package.json b/example/basic/package.json
index 54bc1f3d..0e2aa6b9 100644
--- a/example/basic/package.json
+++ b/example/basic/package.json
@@ -9,9 +9,11 @@
   "license": "MIT",
   "dependencies": {
     "choo": "^3.2.0",
+    "nanoajax": "^0.4.3",
     "normalize.css": "^4.2.0",
     "resolve": "^1.1.7",
     "sheetify": "^5.0.5",
-    "sheetify-cssnext": "^1.0.7"
+    "sheetify-cssnext": "^1.0.7",
+    "yo": "^1.8.4"
   }
 }
diff --git a/handler-css.js b/handler-css.js
index af135c38..36a68477 100644
--- a/handler-css.js
+++ b/handler-css.js
@@ -1,5 +1,6 @@
-const stream = require('readable-stream')
 const assert = require('assert')
+const sse = require('sse-stream')
+const stream = require('readable-stream')
 
 module.exports = css
 
@@ -18,9 +19,23 @@ function css (state) {
 
     return function (req, res) {
       res.setHeader('Content-Type', 'text/css')
+
       if (!state.cssBuf) {
         throw new Error('no css found, did you register bankai.js?')
       }
+
+      if (!state.cssSse) {
+        state.cssSse = sse('/' + state.htmlOpts.css)
+        state.cssSse.install(req.connection.server)
+        const eventStream = new stream.PassThrough()
+        state.on('css:ready', function () {
+          eventStream.push(JSON.stringify({update: ['css']}))
+        })
+        state.cssSse.on('connection', function (client) {
+          eventStream.pipe(client)
+        })
+      }
+
       // either css hasn't been updated, and is ready to serve
       // or attach a listener to when css will be updated
       // and send when ready
diff --git a/handler-html.js b/handler-html.js
index 2c6c557e..006608fb 100644
--- a/handler-html.js
+++ b/handler-html.js
@@ -1,8 +1,22 @@
-const lrScript = require('inject-lr-script-stream')
+const path = require('path')
+const bl = require('bl')
+const browserify = require('browserify')
 const htmlIndex = require('simple-html-index')
 const hyperstream = require('hyperstream')
+const resolve = require('resolve')
+const stream = require('stream')
 const xtend = require('xtend')
-const bl = require('bl')
+
+const cwd = process.cwd()
+
+// resolve a path according to require.resolve algorithm
+// string -> string
+function resolveEntryFile (relativePath) {
+  const entry = relativePath[0] === '.' || relativePath[0] === '/'
+    ? relativePath
+    : './' + relativePath
+  return resolve.sync(entry, {basedir: cwd})
+}
 
 module.exports = html
 
@@ -12,15 +26,23 @@ function html (state) {
   return function (opts) {
     opts = opts || {}
     const defaultOpts = {
+      src: '.',
       entry: 'bundle.js',
       css: 'bundle.css',
       favicon: true
     }
     const htmlOpts = xtend(defaultOpts, opts)
+    state.htmlOpts = htmlOpts
     const html = htmlIndex(htmlOpts).pipe(createMetaTag())
+    const scriptSelector = 'script[src="' + htmlOpts.entry + '"]'
+    const styleSelector = 'link[href="' + htmlOpts.css + '"]'
 
     const htmlBuf = state.env === 'development'
-      ? html.pipe(lrScript()).pipe(bl())
+      ? html
+          .pipe(markHotReplaceable(scriptSelector, htmlOpts.src))
+          .pipe(markHotReplaceable(styleSelector, true))
+          .pipe(hmrScript())
+          .pipe(bl())
       : html.pipe(bl())
 
     return function (req, res) {
@@ -38,3 +60,37 @@ function createMetaTag () {
     head: { _appendHtml: metaTag }
   })
 }
+
+function markHotReplaceable (selector, src) {
+  const query = {}
+  const value = typeof src === 'string'
+    ? resolveEntryFile(src)
+    : src
+
+  query[selector] = {
+    'data-bankai-hmr': value
+  }
+
+  return hyperstream(query)
+}
+
+function hmrScript () {
+  const b = browserify(path.resolve(__dirname, 'client-hmr.js'))
+  const script$ = new stream.PassThrough()
+  script$.push('<script>')
+
+  b.on('bundle', function (bundle$) {
+    bundle$.pipe(script$)
+  })
+
+  b.bundle(function (error) {
+    if (error) {
+      console.error(error)
+    }
+    script$.end('</script>')
+  })
+
+  return hyperstream({
+    body: { _appendHtml: script$ }
+  })
+}
diff --git a/handler-js.js b/handler-js.js
index f67764e3..953aaa70 100644
--- a/handler-js.js
+++ b/handler-js.js
@@ -1,12 +1,13 @@
-const sheetify = require('sheetify/transform')
+const assert = require('assert')
+const bl = require('bl')
 const cssExtract = require('css-extract')
-const stream = require('readable-stream')
+const Emitter = require('events')
 const errorify = require('errorify')
+const sheetify = require('sheetify/transform')
+const stream = require('readable-stream')
+const sse = require('sse-stream')
 const watchify = require('watchify')
-const Emitter = require('events')
-const assert = require('assert')
 const xtend = require('xtend')
-const bl = require('bl')
 
 module.exports = js
 
@@ -22,14 +23,20 @@ function js (state) {
 
     // signal to CSS that browserify is registered
     state.jsRegistered = true
+    state.jsOpts = {
+      src: src,
+      opts: opts
+    }
 
     const baseBrowserifyOpts = {
       cache: {},
+      require: [],
       packageCache: {},
       entries: [ require.resolve(src) ],
       fullPaths: true
     }
-    var b = browserify(xtend(baseBrowserifyOpts, opts))
+    const browserifyOpts = xtend(baseBrowserifyOpts, opts)
+    var b = browserify(browserifyOpts)
 
     // enable css if registered
     if (state.cssOpts) {
@@ -63,6 +70,19 @@ function js (state) {
           b.close()
         })
       }
+      if (state.env === 'development' && !b.sse) {
+        b.sse = sse('/' + state.htmlOpts.entry)
+        b.sse.install(req.connection.server)
+
+        const eventStream = new stream.PassThrough()
+        b.on('update', function (ids) {
+          eventStream.push(JSON.stringify({update: ids}))
+        })
+
+        b.sse.on('connection', function (client) {
+          eventStream.pipe(client)
+        })
+      }
       handler(req, res, function (err, js) {
         if (err) return ts.emit('error', err)
         state.cssBuf.end()
diff --git a/index.js b/index.js
index a59624fd..7fc44991 100644
--- a/index.js
+++ b/index.js
@@ -6,9 +6,12 @@ const state = new Emitter()
 state.env = process.env.NODE_ENV === 'production' ? 'production' : 'development'
 state.cssStream = new stream.PassThrough()
 state.jsRegistered = false
+state.htmlOpts = null
+state.jsOpts = null
 state.cssReady = false
 state.cssOpts = null
 state.cssBuf = null
+state.cssSse = null
 
 exports.html = require('./handler-html')(state)
 exports.css = require('./handler-css')(state)
diff --git a/package.json b/package.json
index ed4ee0ac..7e7e2d20 100644
--- a/package.json
+++ b/package.json
@@ -29,19 +29,26 @@
     "bl": "^1.1.2",
     "css-extract": "^1.1.1",
     "errorify": "^0.3.1",
+    "es6-promise": "^3.2.1",
     "hyperstream": "^1.2.2",
     "inject-lr-script-stream": "^1.1.1",
     "meow": "^3.7.0",
+    "nanoajax": "^0.4.3",
     "opn": "^4.0.2",
     "project-name-generator": "^2.1.2",
     "readable-stream": "^2.1.4",
+    "request": "^2.74.0",
     "resolve": "^1.1.7",
     "server-router": "^2.1.0",
     "sheetify": "^5.0.5",
     "simple-html-index": "^1.3.0",
+    "sse-stream": "0.0.4",
     "string-to-stream": "^1.1.0",
     "watchify": "^3.7.0",
-    "xtend": "^4.0.1"
+    "whatwg-fetch": "^1.0.0",
+    "xtend": "^4.0.1",
+    "yo": "^1.8.4",
+    "yo-yo": "^1.2.2"
   },
   "devDependencies": {
     "browserify": "^13.1.0",
diff --git a/test/index.js b/test/index.js
index 9ccf5387..f861cae0 100644
--- a/test/index.js
+++ b/test/index.js
@@ -82,7 +82,7 @@ test('js', function (t) {
 // Needed because watchify does not reliably clean up all handles behind itself
 // * https://github.com/substack/watchify/issues/22#issuecomment-88115610
 // * https://github.com/substack/watchify/blob/master/test/zzz.js
-test('zzz', function (t) {
+test('zzz', function (t) {
   t.on('end', function () {
     setTimeout(function () {
       process.exit()