diff --git a/packages/next/build/entries.ts b/packages/next/build/entries.ts
index 7181d6f8c971818..7aa7b83f6230e47 100644
--- a/packages/next/build/entries.ts
+++ b/packages/next/build/entries.ts
@@ -17,7 +17,7 @@ import { __ApiPreviewProps } from '../server/api-utils'
 import { isTargetLikeServerless } from '../server/utils'
 import { warn } from './output/log'
 import { parse } from '../build/swc'
-import { isFlightPage, withoutRSCExtensions } from './utils'
+import { isServerComponentPage, withoutRSCExtensions } from './utils'
 import { normalizePathSep } from '../shared/lib/page-path/normalize-path-sep'
 import { normalizePagePath } from '../shared/lib/page-path/normalize-page-path'
 
@@ -251,7 +251,10 @@ export function getEdgeServerEntry(opts: {
     absolutePagePath: opts.absolutePagePath,
     buildId: opts.buildId,
     dev: opts.isDev,
-    isServerComponent: isFlightPage(opts.config, opts.absolutePagePath),
+    isServerComponent: isServerComponentPage(
+      opts.config,
+      opts.absolutePagePath
+    ),
     page: opts.page,
     stringifiedConfig: JSON.stringify(opts.config),
   }
diff --git a/packages/next/build/index.ts b/packages/next/build/index.ts
index e096a315d190628..4171a17f1983102 100644
--- a/packages/next/build/index.ts
+++ b/packages/next/build/index.ts
@@ -100,7 +100,7 @@ import {
   copyTracedFiles,
   isReservedPage,
   isCustomErrorPage,
-  isFlightPage,
+  isServerComponentPage,
 } from './utils'
 import getBaseWebpackConfig from './webpack-config'
 import { PagesManifest } from './webpack/plugins/pages-manifest-plugin'
@@ -196,7 +196,11 @@ export default async function build(
       setGlobal('telemetry', telemetry)
 
       const publicDir = path.join(dir, 'public')
-      const pagesDir = findPagesDir(dir)
+      const { pages: pagesDir, root: rootDir } = findPagesDir(
+        dir,
+        config.experimental.rootDir
+      )
+
       const hasPublicDir = await fileExists(publicDir)
 
       telemetry.record(
@@ -230,7 +234,7 @@ export default async function build(
         .traceAsyncFn(() =>
           verifyTypeScriptSetup(
             dir,
-            pagesDir,
+            [pagesDir, rootDir].filter(Boolean) as string[],
             !ignoreTypeScriptErrors,
             config,
             cacheDir
@@ -973,7 +977,7 @@ export default async function build(
                 : undefined
 
               if (hasServerComponents && pagePath) {
-                if (isFlightPage(config, pagePath)) {
+                if (isServerComponentPage(config, pagePath)) {
                   isServerComponent = true
                 }
               }
diff --git a/packages/next/build/utils.ts b/packages/next/build/utils.ts
index 74e29050550be44..70e29d4f8b874a1 100644
--- a/packages/next/build/utils.ts
+++ b/packages/next/build/utils.ts
@@ -1101,7 +1101,7 @@ export function withoutRSCExtensions(pageExtensions: string[]): string[] {
   )
 }
 
-export function isFlightPage(
+export function isServerComponentPage(
   nextConfig: NextConfigComplete,
   filePath: string
 ): boolean {
diff --git a/packages/next/lib/eslint/runLintCheck.ts b/packages/next/lib/eslint/runLintCheck.ts
index a7229a6f5911259..e994f8528680c22 100644
--- a/packages/next/lib/eslint/runLintCheck.ts
+++ b/packages/next/lib/eslint/runLintCheck.ts
@@ -171,7 +171,8 @@ async function lint(
       }
     }
 
-    const pagesDir = findPagesDir(baseDir)
+    // TODO: should we apply these rules to "root" dir as well?
+    const pagesDir = findPagesDir(baseDir).pages
 
     if (nextEslintPluginIsEnabled) {
       let updatedPagesDir = false
diff --git a/packages/next/lib/find-pages-dir.ts b/packages/next/lib/find-pages-dir.ts
index a4acde163903835..862849fd00dec1c 100644
--- a/packages/next/lib/find-pages-dir.ts
+++ b/packages/next/lib/find-pages-dir.ts
@@ -10,22 +10,37 @@ export const existsSync = (f: string): boolean => {
   }
 }
 
-export function findPagesDir(dir: string): string {
-  // prioritize ./pages over ./src/pages
-  let curDir = path.join(dir, 'pages')
+function findDir(dir: string, name: 'pages' | 'root'): string | null {
+  // prioritize ./${name} over ./src/${name}
+  let curDir = path.join(dir, name)
   if (existsSync(curDir)) return curDir
 
-  curDir = path.join(dir, 'src/pages')
+  curDir = path.join(dir, 'src', name)
   if (existsSync(curDir)) return curDir
 
-  // Check one level up the tree to see if the pages directory might be there
-  if (existsSync(path.join(dir, '..', 'pages'))) {
+  return null
+}
+
+export function findPagesDir(
+  dir: string,
+  root?: boolean
+): { pages: string; root?: string } {
+  const pagesDir = findDir(dir, 'pages')
+  let rootDir: undefined | string
+
+  if (root) {
+    rootDir = findDir(dir, 'root') || undefined
+  }
+
+  // TODO: allow "root" dir without pages dir
+  if (pagesDir === null) {
     throw new Error(
-      '> No `pages` directory found. Did you mean to run `next` in the parent (`../`) directory?'
+      "> Couldn't find a `pages` directory. Please create one under the project root"
     )
   }
 
-  throw new Error(
-    "> Couldn't find a `pages` directory. Please create one under the project root"
-  )
+  return {
+    pages: pagesDir,
+    root: rootDir,
+  }
 }
diff --git a/packages/next/lib/typescript/getTypeScriptIntent.ts b/packages/next/lib/typescript/getTypeScriptIntent.ts
index dee44e1b1f1e74a..a8aa7ab69fb80a7 100644
--- a/packages/next/lib/typescript/getTypeScriptIntent.ts
+++ b/packages/next/lib/typescript/getTypeScriptIntent.ts
@@ -8,7 +8,7 @@ export type TypeScriptIntent = { firstTimeSetup: boolean }
 
 export async function getTypeScriptIntent(
   baseDir: string,
-  pagesDir: string,
+  intentDirs: string[],
   config: NextConfigComplete
 ): Promise<TypeScriptIntent | false> {
   const tsConfigPath = path.join(baseDir, config.typescript.tsconfigPath)
@@ -28,13 +28,15 @@ export async function getTypeScriptIntent(
   // project for the user when we detect TypeScript files. So, we need to check
   // the `pages/` directory for a TypeScript file.
   // Checking all directories is too slow, so this is a happy medium.
-  const typescriptFiles = await recursiveReadDir(
-    pagesDir,
-    /.*\.(ts|tsx)$/,
-    /(node_modules|.*\.d\.ts)/
-  )
-  if (typescriptFiles.length) {
-    return { firstTimeSetup: true }
+  for (const dir of intentDirs) {
+    const typescriptFiles = await recursiveReadDir(
+      dir,
+      /.*\.(ts|tsx)$/,
+      /(node_modules|.*\.d\.ts)/
+    )
+    if (typescriptFiles.length) {
+      return { firstTimeSetup: true }
+    }
   }
 
   return false
diff --git a/packages/next/lib/verifyTypeScriptSetup.ts b/packages/next/lib/verifyTypeScriptSetup.ts
index 01939302caae771..e4e47742c422878 100644
--- a/packages/next/lib/verifyTypeScriptSetup.ts
+++ b/packages/next/lib/verifyTypeScriptSetup.ts
@@ -32,7 +32,7 @@ const requiredPackages = [
 
 export async function verifyTypeScriptSetup(
   dir: string,
-  pagesDir: string,
+  intentDirs: string[],
   typeCheckPreflight: boolean,
   config: NextConfigComplete,
   cacheDir?: string
@@ -41,7 +41,7 @@ export async function verifyTypeScriptSetup(
 
   try {
     // Check if the project uses TypeScript:
-    const intent = await getTypeScriptIntent(dir, pagesDir, config)
+    const intent = await getTypeScriptIntent(dir, intentDirs, config)
     if (!intent) {
       return { version: null }
     }
diff --git a/packages/next/server/dev/next-dev-server.ts b/packages/next/server/dev/next-dev-server.ts
index d23353c1ceeefc6..c935563c58b0ae6 100644
--- a/packages/next/server/dev/next-dev-server.ts
+++ b/packages/next/server/dev/next-dev-server.ts
@@ -96,6 +96,8 @@ export default class DevServer extends Server {
   protected sortedRoutes?: string[]
   private addedUpgradeListener = false
   private pagesDir: string
+  // @ts-ignore TODO: add implementation
+  private rootDir?: string
 
   protected staticPathsWorker?: { [key: string]: any } & {
     loadStaticPaths: typeof import('./static-paths-worker').loadStaticPaths
@@ -175,7 +177,13 @@ export default class DevServer extends Server {
     }
 
     this.isCustomServer = !options.isNextDevCommand
-    this.pagesDir = findPagesDir(this.dir)
+    // TODO: hot-reload root/pages dirs?
+    const { pages: pagesDir, root: rootDir } = findPagesDir(
+      this.dir,
+      this.nextConfig.experimental.rootDir
+    )
+    this.pagesDir = pagesDir
+    this.rootDir = rootDir
   }
 
   protected getBuildId(): string {
@@ -361,7 +369,12 @@ export default class DevServer extends Server {
   async prepare(): Promise<void> {
     setGlobal('distDir', this.distDir)
     setGlobal('phase', PHASE_DEVELOPMENT_SERVER)
-    await verifyTypeScriptSetup(this.dir, this.pagesDir, false, this.nextConfig)
+    await verifyTypeScriptSetup(
+      this.dir,
+      [this.pagesDir!, this.rootDir].filter(Boolean) as string[],
+      false,
+      this.nextConfig
+    )
 
     this.customRoutes = await loadCustomRoutes(this.nextConfig)