diff --git a/packages/playwright/package.json b/packages/playwright/package.json
index 620cb529022caf..f85b790be75b23 100644
--- a/packages/playwright/package.json
+++ b/packages/playwright/package.json
@@ -16,8 +16,8 @@
     "Playwright",
     "CLI"
   ],
-  "main": "./index",
-  "typings": "./index.d.ts",
+  "main": "./src/index",
+  "typings": "./src/index.d.ts",
   "author": "Victor Savkin",
   "license": "MIT",
   "bugs": {
diff --git a/packages/playwright/src/generators/configuration/configuration.ts b/packages/playwright/src/generators/configuration/configuration.ts
index a0c04a8cbd2c97..ab01817d9f3af5 100644
--- a/packages/playwright/src/generators/configuration/configuration.ts
+++ b/packages/playwright/src/generators/configuration/configuration.ts
@@ -22,6 +22,8 @@ export async function configurationGenerator(
   generateFiles(tree, path.join(__dirname, 'files'), projectConfig.root, {
     offsetFromRoot: offsetFromRoot(projectConfig.root),
     projectRoot: projectConfig.root,
+    webServerCommand: options.webServerCommand ?? null,
+    webServerAddress: options.webServerAddress ?? null,
     ...options,
   });
 
@@ -67,8 +69,10 @@ function addE2eTarget(tree: Tree, options: ConfigurationGeneratorSchema) {
     throw new Error(`Project ${options.project} already has an e2e target.
 Rename or remove the existing e2e target.`);
   }
+  projectConfig.targets ??= {};
   projectConfig.targets.e2e = {
     executor: '@nx/playwright:playwright',
+    outputs: [`dist/playwright/${projectConfig.root}`],
     options: {},
   };
   updateProjectConfiguration(tree, options.project, projectConfig);
diff --git a/packages/playwright/src/generators/configuration/files/playwright.config.ts.template b/packages/playwright/src/generators/configuration/files/playwright.config.ts.template
index f5067f8a646241..95630a9b6d0951 100644
--- a/packages/playwright/src/generators/configuration/files/playwright.config.ts.template
+++ b/packages/playwright/src/generators/configuration/files/playwright.config.ts.template
@@ -11,6 +11,8 @@ import { defineConfig, devices } from '@playwright/test';
  */
 export default defineConfig({
   testDir: './<%= directory %>',
+  /* When updating this path, make sure to update the outputs in the project.json */
+  outputDir: '<%= offsetFromRoot %>dist/playwright/<%= projectRoot %>/test-output',
   /* Run tests in files in parallel */
   fullyParallel: true,
   /* Fail the build on CI if you accidentally left test.only in the source code. */
@@ -25,7 +27,7 @@ export default defineConfig({
       'html',
       {
         outputFolder:
-          '<%= offsetFromRoot %>/dist/playwright/<%= projectRoot %>/playwright-report',
+          '<%= offsetFromRoot %>dist/playwright/<%= projectRoot %>/playwright-report',
       },
     ],
   ],
@@ -76,10 +78,14 @@ export default defineConfig({
     // },
   ],
 
-  /* Run your local dev server before starting the tests */
-  // webServer: {
+  /* Run your local dev server before starting the tests */<% if(webServerCommand && webServerAddress) {%> 
+   webServer: {
+     command: '<%= webServerCommand %>',
+     url: '<%= webServerAddress %>',
+     reuseExistingServer: !process.env.CI,
+   },<% } else {%>// webServer: {
   //   command: 'npm run start',
   //   url: 'http://127.0.0.1:3000',
   //   reuseExistingServer: !process.env.CI,
-  // },
+  // },<% } %>
 });
diff --git a/packages/playwright/src/generators/configuration/schema.d.ts b/packages/playwright/src/generators/configuration/schema.d.ts
index 99213e3ed939fa..73fb2258298f36 100644
--- a/packages/playwright/src/generators/configuration/schema.d.ts
+++ b/packages/playwright/src/generators/configuration/schema.d.ts
@@ -4,4 +4,14 @@ export interface ConfigurationGeneratorSchema {
   js: boolean; // default is false
   skipFormat: boolean;
   skipPackageJson: boolean;
+  /**
+   * command to give playwright to run the web server
+   * @example: "npx nx serve my-fe-app"
+   **/
+  webServerCommand?: string;
+  /**
+   * address
+   * @example: "http://localhost:4200"
+   **/
+  webServerAddress?: string;
 }
diff --git a/packages/playwright/src/generators/configuration/schema.json b/packages/playwright/src/generators/configuration/schema.json
index 26fded6567b080..6d3b2ad2e66322 100644
--- a/packages/playwright/src/generators/configuration/schema.json
+++ b/packages/playwright/src/generators/configuration/schema.json
@@ -25,6 +25,14 @@
       "description": "Generate JavaScript files rather than TypeScript files.",
       "default": false
     },
+    "webServerCommand": {
+      "type": "string",
+      "description": "The command to start the web server."
+    },
+    "webServerAddress": {
+      "type": "string",
+      "description": "The address of the web server."
+    },
     "skipFormat": {
       "description": "Skip formatting files.",
       "type": "boolean",
diff --git a/packages/playwright/src/generators/init/init.ts b/packages/playwright/src/generators/init/init.ts
index f904c5d10b7274..085d4b083ab03c 100644
--- a/packages/playwright/src/generators/init/init.ts
+++ b/packages/playwright/src/generators/init/init.ts
@@ -5,6 +5,7 @@ import {
   GeneratorCallback,
   runTasksInSerial,
   Tree,
+  updateJson,
 } from '@nx/devkit';
 import { InitGeneratorSchema } from './schema';
 import { nxVersion, playwrightVersion } from '../../utils/versions';
@@ -26,6 +27,30 @@ export async function initGenerator(tree: Tree, options: InitGeneratorSchema) {
   if (!options.skipFormat) {
     await formatFiles(tree);
   }
+
+  if (tree.exists('.vscode/extensions.json')) {
+    updateJson(tree, '.vscode/extensions.json', (json) => {
+      json.recommendations ??= [];
+
+      const recs = new Set(json.recommendations);
+      recs.add('ms-playwright.playwright');
+
+      json.recommendations = Array.from(recs);
+      return json;
+    });
+  } else {
+    tree.write(
+      '.vscode/extensions.json',
+      JSON.stringify(
+        {
+          recommendations: ['ms-playwright.playwright'],
+        },
+        null,
+        2
+      )
+    );
+  }
+
   return runTasksInSerial(...tasks);
 }
 
diff --git a/packages/playwright/src/index.ts b/packages/playwright/src/index.ts
index 8b96dbdf4ae12a..d404de56a7403e 100644
--- a/packages/playwright/src/index.ts
+++ b/packages/playwright/src/index.ts
@@ -2,3 +2,5 @@ export {
   playwrightExecutor,
   PlaywrightExecutorSchema,
 } from './executors/playwright/playwright';
+export { initGenerator } from './generators/init/init';
+export { configurationGenerator } from './generators/configuration/configuration';