diff --git a/examples/vue-kitchen-sink/.babelrc b/examples/vue-kitchen-sink/.babelrc
new file mode 100644
index 000000000000..bc4c4c4af5d2
--- /dev/null
+++ b/examples/vue-kitchen-sink/.babelrc
@@ -0,0 +1,7 @@
+{
+  "presets": [
+    ["env", { "modules": false }],
+    "vue"
+  ]
+}
+
diff --git a/examples/vue-kitchen-sink/package.json b/examples/vue-kitchen-sink/package.json
index c975f8e9c315..a30d633191b6 100644
--- a/examples/vue-kitchen-sink/package.json
+++ b/examples/vue-kitchen-sink/package.json
@@ -13,6 +13,7 @@
     "babel-core": "^6.26.0",
     "babel-loader": "^7.1.2",
     "babel-preset-env": "^1.6.0",
+    "babel-preset-vue": "^1.2.1",
     "cross-env": "^3.0.0",
     "css-loader": "^0.28.7",
     "file-loader": "^0.11.2",
diff --git a/examples/vue-kitchen-sink/src/stories/index.js b/examples/vue-kitchen-sink/src/stories/index.js
index cbaea1df5144..82c9820433c8 100644
--- a/examples/vue-kitchen-sink/src/stories/index.js
+++ b/examples/vue-kitchen-sink/src/stories/index.js
@@ -1,3 +1,5 @@
+/* eslint-disable react/react-in-jsx-scope */
+
 import Vuex from 'vuex';
 import { storiesOf } from '@storybook/vue';
 import { action } from '@storybook/addon-actions';
@@ -68,6 +70,12 @@ storiesOf('Method for rendering Vue', module)
       action: linkTo('Button'),
     },
   }))
+  .add('JSX', () => ({
+    components: { MyButton },
+    render() {
+      return <my-button>MyButton rendered with JSX</my-button>;
+    },
+  }))
   .add('vuex + actions', () => ({
     components: { MyButton },
     template: '<my-button :handle-click="log">with vuex: {{ $store.state.count }}</my-button>',
@@ -238,3 +246,5 @@ storiesOf('Addon Knobs', module)
         `,
     };
   });
+
+/* eslint-enable react/react-in-jsx-scope */
diff --git a/lib/cli/generators/SFC_VUE/index.js b/lib/cli/generators/SFC_VUE/index.js
index 5b8fb90f0b66..68cd9665a991 100644
--- a/lib/cli/generators/SFC_VUE/index.js
+++ b/lib/cli/generators/SFC_VUE/index.js
@@ -7,7 +7,8 @@ module.exports = Promise.all([
   latestVersion('@storybook/vue'),
   latestVersion('@storybook/addon-actions'),
   latestVersion('@storybook/addon-links'),
-]).then(([storybookVersion, actionsVersion, linksVersion]) => {
+  latestVersion('babel-preset-vue'),
+]).then(([storybookVersion, actionsVersion, linksVersion, babelPresetVersion]) => {
   mergeDirs(path.resolve(__dirname, 'template'), '.', 'overwrite');
 
   const packageJson = helpers.getPackageJson();
@@ -16,10 +17,25 @@ module.exports = Promise.all([
   packageJson.devDependencies['@storybook/vue'] = `^${storybookVersion}`;
   packageJson.devDependencies['@storybook/addon-actions'] = `^${actionsVersion}`;
   packageJson.devDependencies['@storybook/addon-links'] = `^${linksVersion}`;
+  packageJson.devDependencies['babel-preset-vue'] = `^${babelPresetVersion}`;
 
   packageJson.scripts = packageJson.scripts || {};
   packageJson.scripts.storybook = 'start-storybook -p 6006';
   packageJson.scripts['build-storybook'] = 'build-storybook';
 
   helpers.writePackageJson(packageJson);
+
+  const babelRc = helpers.getBabelRc() || {
+    presets: [['env', { modules: false }]],
+  };
+  const hasPreset = babelRc.presets.find(
+    preset =>
+      (Array.isArray(preset) && preset[0] === 'vue') ||
+      (typeof preset === 'string' && preset === 'vue')
+  );
+  if (!hasPreset) {
+    babelRc.presets.push('vue');
+  }
+
+  helpers.writeBabelRc(babelRc);
 });
diff --git a/lib/cli/generators/SFC_VUE/template/src/stories/index.js b/lib/cli/generators/SFC_VUE/template/src/stories/index.js
index b1f09e9bb3d9..4fb3479a0b79 100644
--- a/lib/cli/generators/SFC_VUE/template/src/stories/index.js
+++ b/lib/cli/generators/SFC_VUE/template/src/stories/index.js
@@ -1,3 +1,5 @@
+/* eslint-disable react/react-in-jsx-scope */
+
 import { storiesOf } from '@storybook/vue';
 import { action } from '@storybook/addon-actions';
 import { linkTo } from '@storybook/addon-links';
@@ -17,8 +19,17 @@ storiesOf('Button', module)
     template: '<my-button @click="action">Hello Button</my-button>',
     methods: { action: action('clicked') },
   }))
+  .add('with JSX', () => ({
+    components: { MyButton },
+    render() {
+      return <my-button onClick={this.action}>With JSX</my-button>;
+    },
+    methods: { action: linkTo('clicked') },
+  }))
   .add('with some emoji', () => ({
     components: { MyButton },
     template: '<my-button @click="action">😀 😎 👍 💯</my-button>',
     methods: { action: action('clicked') },
   }));
+
+/* eslint-enable react/react-in-jsx-scope */
diff --git a/lib/cli/generators/VUE/index.js b/lib/cli/generators/VUE/index.js
index 5b8fb90f0b66..68cd9665a991 100644
--- a/lib/cli/generators/VUE/index.js
+++ b/lib/cli/generators/VUE/index.js
@@ -7,7 +7,8 @@ module.exports = Promise.all([
   latestVersion('@storybook/vue'),
   latestVersion('@storybook/addon-actions'),
   latestVersion('@storybook/addon-links'),
-]).then(([storybookVersion, actionsVersion, linksVersion]) => {
+  latestVersion('babel-preset-vue'),
+]).then(([storybookVersion, actionsVersion, linksVersion, babelPresetVersion]) => {
   mergeDirs(path.resolve(__dirname, 'template'), '.', 'overwrite');
 
   const packageJson = helpers.getPackageJson();
@@ -16,10 +17,25 @@ module.exports = Promise.all([
   packageJson.devDependencies['@storybook/vue'] = `^${storybookVersion}`;
   packageJson.devDependencies['@storybook/addon-actions'] = `^${actionsVersion}`;
   packageJson.devDependencies['@storybook/addon-links'] = `^${linksVersion}`;
+  packageJson.devDependencies['babel-preset-vue'] = `^${babelPresetVersion}`;
 
   packageJson.scripts = packageJson.scripts || {};
   packageJson.scripts.storybook = 'start-storybook -p 6006';
   packageJson.scripts['build-storybook'] = 'build-storybook';
 
   helpers.writePackageJson(packageJson);
+
+  const babelRc = helpers.getBabelRc() || {
+    presets: [['env', { modules: false }]],
+  };
+  const hasPreset = babelRc.presets.find(
+    preset =>
+      (Array.isArray(preset) && preset[0] === 'vue') ||
+      (typeof preset === 'string' && preset === 'vue')
+  );
+  if (!hasPreset) {
+    babelRc.presets.push('vue');
+  }
+
+  helpers.writeBabelRc(babelRc);
 });
diff --git a/lib/cli/generators/VUE/template/stories/index.js b/lib/cli/generators/VUE/template/stories/index.js
index b6f10120c7db..8435cbe3f227 100644
--- a/lib/cli/generators/VUE/template/stories/index.js
+++ b/lib/cli/generators/VUE/template/stories/index.js
@@ -1,3 +1,5 @@
+/* eslint-disable react/react-in-jsx-scope */
+
 import { storiesOf } from '@storybook/vue';
 import { linkTo } from '@storybook/addon-links';
 
@@ -16,8 +18,17 @@ storiesOf('Button', module)
     template: '<my-button @click="action">Hello Button</my-button>',
     methods: { action: linkTo('clicked') },
   }))
+  .add('with JSX', () => ({
+    components: { MyButton },
+    render() {
+      return <my-button onClick={this.action}>With JSX</my-button>;
+    },
+    methods: { action: linkTo('clicked') },
+  }))
   .add('with some emoji', () => ({
     components: { MyButton },
     template: '<my-button @click="action">😀 😎 👍 💯</my-button>',
     methods: { action: linkTo('clicked') },
   }));
+
+/* eslint-enable react/react-in-jsx-scope */
diff --git a/lib/cli/lib/helpers.js b/lib/cli/lib/helpers.js
index 0288cd9185be..ceeb171d2018 100644
--- a/lib/cli/lib/helpers.js
+++ b/lib/cli/lib/helpers.js
@@ -22,6 +22,23 @@ exports.writePackageJson = function writePackageJson(packageJson) {
   fs.writeFileSync(packageJsonPath, content, 'utf8');
 };
 
+exports.getBabelRc = function getBabelRc() {
+  const babelRcPath = path.resolve('.babelrc');
+  if (!fs.existsSync(babelRcPath)) {
+    return false;
+  }
+
+  const babelRcContent = fs.readFileSync(babelRcPath, 'utf8');
+  return JSON.parse(babelRcContent);
+};
+
+exports.writeBabelRc = function writeBabelRc(babelRc) {
+  const content = `${JSON.stringify(babelRc, null, 2)}\n`;
+  const babelRcPath = path.resolve('.babelrc');
+
+  fs.writeFileSync(babelRcPath, content, 'utf8');
+};
+
 exports.commandLog = function commandLog(message) {
   process.stdout.write(chalk.cyan(' • ') + message);
   const done = (errorMessage, errorInfo) => {