diff --git a/CHANGELOG.md b/CHANGELOG.md
index 5eead78f8..b396a94e7 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,8 @@
 # Changelog
 
+## v8.0.8
+* [Fixed memory leak when using multiple webpack instances](https://github.com/TypeStrong/ts-loader/pull/1205) - thanks @valerio
+
 ## v8.0.7
 * [Speeds up project reference build and doesnt store the result in memory](https://github.com/TypeStrong/ts-loader/pull/1202) - thanks @sheetalkamat
 
diff --git a/package.json b/package.json
index f9ffda999..e5e48f498 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "ts-loader",
-  "version": "8.0.7",
+  "version": "8.0.8",
   "description": "TypeScript loader for webpack",
   "main": "index.js",
   "types": "dist",
diff --git a/src/index.ts b/src/index.ts
index 37af8a480..95e53e301 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -27,7 +27,6 @@ import {
   isReferencedFile,
 } from './utils';
 
-const webpackInstances: webpack.Compiler[] = [];
 const loaderOptionsCache: LoaderOptionsCache = {};
 
 /**
@@ -174,12 +173,6 @@ function getOptionsHash(loaderOptions: LoaderOptions) {
  * or creates them, adds them to the cache and returns
  */
 function getLoaderOptions(loaderContext: webpack.loader.LoaderContext) {
-  // differentiate the TypeScript instance based on the webpack instance
-  let webpackIndex = webpackInstances.indexOf(loaderContext._compiler);
-  if (webpackIndex === -1) {
-    webpackIndex = webpackInstances.push(loaderContext._compiler) - 1;
-  }
-
   const loaderOptions =
     loaderUtils.getOptions<LoaderOptions>(loaderContext) ||
     ({} as LoaderOptions);
@@ -187,9 +180,7 @@ function getLoaderOptions(loaderContext: webpack.loader.LoaderContext) {
   // If no instance name is given in the options, use the hash of the loader options
   // In this way, if different options are given the instances will be different
   const instanceName =
-    webpackIndex +
-    '_' +
-    (loaderOptions.instance || 'default_' + getOptionsHash(loaderOptions));
+    loaderOptions.instance || 'default_' + getOptionsHash(loaderOptions);
 
   if (!loaderOptionsCache.hasOwnProperty(instanceName)) {
     loaderOptionsCache[instanceName] = new WeakMap();
diff --git a/src/instances.ts b/src/instances.ts
index 0078a5aaa..69008844e 100644
--- a/src/instances.ts
+++ b/src/instances.ts
@@ -33,9 +33,22 @@ import {
 } from './utils';
 import { makeWatchRun } from './watch-run';
 
-const instances = new Map<string, TSInstance>();
+// Each TypeScript instance is based on the webpack instance (key of the WeakMap)
+// and also the name that was generated or passed via the options (string key of the
+// internal Map)
+const instanceCache = new WeakMap<webpack.Compiler, Map<string, TSInstance>>();
 const instancesBySolutionBuilderConfigs = new Map<FilePathKey, TSInstance>();
 
+function addTSInstanceToCache(
+  key: webpack.Compiler,
+  instanceName: string,
+  instance: TSInstance
+) {
+  const instances = instanceCache.get(key) ?? new Map<string, TSInstance>();
+  instances.set(instanceName, instance);
+  instanceCache.set(key, instances);
+}
+
 /**
  * The loader is executed once for each file seen by webpack. However, we need to keep
  * a persistent instance of TypeScript that contains all of the files in the program
@@ -47,6 +60,12 @@ export function getTypeScriptInstance(
   loaderOptions: LoaderOptions,
   loader: webpack.loader.LoaderContext
 ): { instance?: TSInstance; error?: WebpackError } {
+  let instances = instanceCache.get(loader._compiler);
+  if (!instances) {
+    instances = new Map();
+    instanceCache.set(loader._compiler, instances);
+  }
+
   const existing = instances.get(loaderOptions.instance);
   if (existing) {
     if (!existing.initialSetupPending) {
@@ -141,7 +160,7 @@ function successfulTypeScriptInstance(
     const existing = getExistingSolutionBuilderHost(configFileKey);
     if (existing) {
       // Reuse the instance if config file for project references is shared.
-      instances.set(loaderOptions.instance, existing);
+      addTSInstanceToCache(loader._compiler, loaderOptions.instance, existing);
       return { instance: existing };
     }
   }
@@ -226,7 +245,12 @@ function successfulTypeScriptInstance(
       log,
       filePathKeyMapper,
     };
-    instances.set(loaderOptions.instance, transpileInstance);
+
+    addTSInstanceToCache(
+      loader._compiler,
+      loaderOptions.instance,
+      transpileInstance
+    );
     return { instance: transpileInstance };
   }
 
@@ -278,7 +302,8 @@ function successfulTypeScriptInstance(
     log,
     filePathKeyMapper,
   };
-  instances.set(loaderOptions.instance, instance);
+
+  addTSInstanceToCache(loader._compiler, loaderOptions.instance, instance);
   return { instance };
 }