diff --git a/docs/guide/build-targets.md b/docs/guide/build-targets.md
index 6414814825..24de688e22 100644
--- a/docs/guide/build-targets.md
+++ b/docs/guide/build-targets.md
@@ -8,7 +8,7 @@ App is the default build target. In this mode:
 
 - `index.html` with asset and resource hints injection
 - vendor libraries split into a separate chunk for better caching
-- static assets under 4kb are inlined into JavaScript
+- static assets under 8KiB are inlined into JavaScript
 - static assets in `public` are copied into output directory
 
 ## Library
diff --git a/docs/guide/html-and-static-assets.md b/docs/guide/html-and-static-assets.md
index 2599520a70..0830d78044 100644
--- a/docs/guide/html-and-static-assets.md
+++ b/docs/guide/html-and-static-assets.md
@@ -129,9 +129,9 @@ will be compiled into:
 h('img', { attrs: { src: require('./image.png') }})
 ```
 
-Internally, we use `file-loader` to determine the final file location with version hashes and correct public base paths, and use `url-loader` to conditionally inline assets that are smaller than 4kb, reducing the amount of HTTP requests.
+Internally, we configured webpack [Assets Modules](https://webpack.js.org/guides/asset-modules/) to determine the final file location with version hashes and correct public base paths, and conditionally inline assets that are smaller than 8KiB, reducing the amount of HTTP requests.
 
-You can adjust the inline file size limit via [chainWebpack](../config/#chainwebpack). For example, to set the limit to 10kb instead:
+You can adjust the inline file size limit via [chainWebpack](../config/#chainwebpack). For example, to set the limit of inline images to 4KiB instead:
 
 ``` js
 // vue.config.js
@@ -139,9 +139,11 @@ module.exports = {
   chainWebpack: config => {
     config.module
       .rule('images')
-        .use('url-loader')
-          .loader('url-loader')
-          .tap(options => Object.assign(options, { limit: 10240 }))
+        .set('parser', {
+          dataUrlCondition: {
+            maxSize: 4 * 1024 // 4KiB
+          }
+        })
   }
 }
 ```
diff --git a/docs/migrations/migrate-from-v4.md b/docs/migrations/migrate-from-v4.md
index 8c12c06913..de731b4775 100644
--- a/docs/migrations/migrate-from-v4.md
+++ b/docs/migrations/migrate-from-v4.md
@@ -93,13 +93,31 @@ The `css.requireModuleExtension` option is removed. If you do need to strip the
 
 No longer supports generating project with `node-sass`. It has been [deprecated](https://sass-lang.com/blog/libsass-is-deprecated#how-do-i-migrate) for a while. Please use the `sass` package instead.
 
+#### Asset Modules
+
+`url-loader` and `file-loader` are removed in favor of [Asset Modules](https://webpack.js.org/guides/asset-modules/). If you want to adjust the size limit of inline image assets, now you need to set the [`Rule.parser.dataUrlCondition.maxSize`](https://webpack.js.org/configuration/module/#ruleparserdataurlcondition) option:
+
+``` js
+// vue.config.js
+module.exports = {
+  chainWebpack: config => {
+    config.module
+      .rule('images')
+        .set('parser', {
+          dataUrlCondition: {
+            maxSize: 4 * 1024 // 4KiB
+          }
+        })
+  }
+}
+```
+
 #### Underlying Loaders and Plugins
 
 * `html-webpack-plugin` is upgraded from v3 to v5. More details are available in the [release announcement of `html-webpack-plugin` v4](https://dev.to/jantimon/html-webpack-plugin-4-has-been-released-125d) and the [full changelog](https://github.com/jantimon/html-webpack-plugin/blob/master/CHANGELOG.md).
 * `sass-loader` v7 support is dropped. See the v8 breaking changes at its [changelog](https://github.com/webpack-contrib/sass-loader/blob/master/CHANGELOG.md#800-2019-08-29).
 * `postcss-loader` is upgraded from v3 to v5. Most notably, `PostCSS` options (`plugin` / `syntax` / `parser` / `stringifier`) are moved into the `postcssOptions` field. More details available at the [changelog](https://github.com/webpack-contrib/postcss-loader/blob/master/CHANGELOG.md#400-2020-09-07).
 * `copy-webpack-plugin` is upgraded from v5 to v8. If you never customized its config through `config.plugin('copy')`, there should be no user-facing breaking changes. A full list of breaking changes is available at [`copy-webpack-plugin` v6.0.0 changelog](https://github.com/webpack-contrib/copy-webpack-plugin/blob/master/CHANGELOG.md).
-* `file-loader` is upgraded from v4 to v6, and `url-loader` from v2 to v4. The `esModule` option is now turned on by default for non-Vue-2 projects. Full changelog available at [`file-loader` changelog](https://github.com/webpack-contrib/file-loader/blob/master/CHANGELOG.md) and [`url-loader` changelog](https://github.com/webpack-contrib/url-loader/blob/master/CHANGELOG.md).
 * `terser-webpack-plugin` is upgraded from v2 to v5, using terser 5 and some there are some changes in the options format. See full details in its [changelog](https://github.com/webpack-contrib/terser-webpack-plugin/blob/master/CHANGELOG.md).
 * When creating new projects, the default `less-loader` is updated from [v5 to v8](https://github.com/webpack-contrib/less-loader/blob/master/CHANGELOG.md); `less` from [v3 to v4](https://github.com/less/less.js/pull/3573); `sass-loader` from [v8 to v11](https://github.com/webpack-contrib/sass-loader/blob/master/CHANGELOG.md); `stylus-loader` from [v3 to v5](https://github.com/webpack-contrib/stylus-loader/blob/master/CHANGELOG.md).
 
diff --git a/docs/ru/guide/build-targets.md b/docs/ru/guide/build-targets.md
index c279d4f41b..c1111262d2 100644
--- a/docs/ru/guide/build-targets.md
+++ b/docs/ru/guide/build-targets.md
@@ -8,7 +8,7 @@
 
 - `index.html` с внедрением ресурсов и подсказок для пред-загрузки
 - сторонние библиотеки разделяются на отдельные фрагменты для лучшего кэширования
-- статические ресурсы менее 4 КБайт будут вставлены инлайн в JavaScript
+- статические ресурсы менее 8 КБайт будут вставлены инлайн в JavaScript
 - статические ресурсы в `public` будут скопированы в каталог сборки
 
 ## Библиотека (Library)
diff --git a/docs/ru/guide/html-and-static-assets.md b/docs/ru/guide/html-and-static-assets.md
index 938e4a7006..22e9e6e5d7 100644
--- a/docs/ru/guide/html-and-static-assets.md
+++ b/docs/ru/guide/html-and-static-assets.md
@@ -129,9 +129,9 @@ module.exports = {
 h('img', { attrs: { src: require('./image.png') }})
 ```
 
-Внутри используется `file-loader` для определения конечного расположения файла с хэшем версии и правильный путь относительно корня, а также `url-loader` для инлайн-встраивания ресурсов, чей размер меньше 4 КБайт, чтобы уменьшить количество HTTP-запросов к серверу.
+Внутри используется `file-loader` для определения конечного расположения файла с хэшем версии и правильный путь относительно корня, а также `url-loader` для инлайн-встраивания ресурсов, чей размер меньше 8 КБайт, чтобы уменьшить количество HTTP-запросов к серверу.
 
-Изменить размер можно через [chainWebpack](../config/#chainwebpack). Например, чтобы установить лимит в 10 КБайт:
+Изменить размер можно через [chainWebpack](../config/#chainwebpack). Например, чтобы установить лимит в 4 КБайт:
 
 ```js
 // vue.config.js
@@ -139,9 +139,11 @@ module.exports = {
   chainWebpack: config => {
     config.module
       .rule('images')
-        .use('url-loader')
-          .loader('url-loader')
-          .tap(options => Object.assign(options, { limit: 10240 }))
+        .set('parser', {
+          dataUrlCondition: {
+            maxSize: 4 * 1024 // 4KiB
+          }
+        })
   }
 }
 ```
diff --git a/docs/zh/guide/build-targets.md b/docs/zh/guide/build-targets.md
index b7a6afc456..6fe900df3b 100644
--- a/docs/zh/guide/build-targets.md
+++ b/docs/zh/guide/build-targets.md
@@ -8,7 +8,7 @@
 
 - `index.html` 会带有注入的资源和 resource hint
 - 第三方库会被分到一个独立包以便更好的缓存
-- 小于 4kb 的静态资源会被内联在 JavaScript 中
+- 小于 8KiB 的静态资源会被内联在 JavaScript 中
 - `public` 中的静态资源会被复制到输出目录中
 
 ## 库
diff --git a/docs/zh/guide/html-and-static-assets.md b/docs/zh/guide/html-and-static-assets.md
index 0f9d51c8d8..9ff1484008 100644
--- a/docs/zh/guide/html-and-static-assets.md
+++ b/docs/zh/guide/html-and-static-assets.md
@@ -125,9 +125,9 @@ module.exports = {
 h('img', { attrs: { src: require('./image.png') }})
 ```
 
-在其内部，我们通过 `file-loader` 用版本哈希值和正确的公共基础路径来决定最终的文件路径，再用 `url-loader` 将小于 4kb 的资源内联，以减少 HTTP 请求的数量。
+在其内部，我们通过 webpack 的 [Assets Modules](https://webpack.js.org/guides/asset-modules/) 配置，用版本哈希值和正确的公共基础路径来决定最终的文件路径，并将小于 8KiB 的资源内联，以减少 HTTP 请求的数量。
 
-你可以通过 [chainWebpack](../config/#chainwebpack) 调整内联文件的大小限制。例如，下列代码会将其限制设置为 10kb：
+你可以通过 [chainWebpack](../config/#chainwebpack) 调整内联文件的大小限制。例如，下列代码会将内联图片资源限制设置为 4KiB：
 
 ``` js
 // vue.config.js
@@ -135,9 +135,11 @@ module.exports = {
   chainWebpack: config => {
     config.module
       .rule('images')
-        .use('url-loader')
-          .loader('url-loader')
-          .tap(options => Object.assign(options, { limit: 10240 }))
+        .set('parser', {
+          dataUrlCondition: {
+            maxSize: 4 * 1024 // 4KiB
+          }
+        })
   }
 }
 ```
diff --git a/packages/@vue/cli-service/lib/config/assets.js b/packages/@vue/cli-service/lib/config/assets.js
index 534c33c2b0..bc30e25b47 100644
--- a/packages/@vue/cli-service/lib/config/assets.js
+++ b/packages/@vue/cli-service/lib/config/assets.js
@@ -1,12 +1,6 @@
 /** @type {import('@vue/cli-service').ServicePlugin} */
 module.exports = (api, options) => {
   const getAssetPath = require('../util/getAssetPath')
-  const getVueMajor = require('../util/getVueMajor')
-
-  const inlineLimit = 4096
-
-  const vueMajor = getVueMajor(api.getCwd())
-  const supportsEsModuleAsset = (vueMajor !== 2)
 
   const genAssetSubPath = dir => {
     return getAssetPath(
@@ -15,56 +9,39 @@ module.exports = (api, options) => {
     )
   }
 
-  // TODO: use asset modules for webpack 5
-  // <https://webpack.js.org/guides/asset-modules/>
-
-  const genUrlLoaderOptions = dir => {
-    return {
-      limit: inlineLimit,
-      esModule: supportsEsModuleAsset,
-      // use explicit fallback to avoid regression in url-loader>=1.1.0
-      fallback: {
-        loader: require.resolve('file-loader'),
-        options: {
-          name: genAssetSubPath(dir),
-          esModule: supportsEsModuleAsset
-        }
-      }
-    }
-  }
-
   api.chainWebpack(webpackConfig => {
     webpackConfig.module
-      .rule('images')
-        .test(/\.(png|jpe?g|gif|webp|avif)(\?.*)?$/)
-        .use('url-loader')
-          .loader(require.resolve('url-loader'))
-          .options(genUrlLoaderOptions('img'))
+    .rule('svg')
+      .test(/\.(svg)(\?.*)?$/)
+      // do not base64-inline SVGs.
+      // https://github.com/facebookincubator/create-react-app/pull/1180
+      .set('type', 'asset/resource')
+      .set('generator', {
+        filename: genAssetSubPath('img')
+      })
 
-    // do not base64-inline SVGs.
-    // https://github.com/facebookincubator/create-react-app/pull/1180
     webpackConfig.module
-      .rule('svg')
-        .test(/\.(svg)(\?.*)?$/)
-        .use('file-loader')
-          .loader(require.resolve('file-loader'))
-          .options({
-            name: genAssetSubPath('img'),
-            esModule: supportsEsModuleAsset
-          })
+      .rule('images')
+        .test(/\.(png|jpe?g|gif|webp|avif)(\?.*)?$/)
+        .set('type', 'asset')
+        .set('generator', {
+          filename: genAssetSubPath('img')
+        })
 
     webpackConfig.module
       .rule('media')
         .test(/\.(mp4|webm|ogg|mp3|wav|flac|aac)(\?.*)?$/)
-        .use('url-loader')
-          .loader(require.resolve('url-loader'))
-          .options(genUrlLoaderOptions('media'))
+        .set('type', 'asset')
+        .set('generator', {
+          filename: genAssetSubPath('media')
+        })
 
     webpackConfig.module
       .rule('fonts')
         .test(/\.(woff2?|eot|ttf|otf)(\?.*)?$/i)
-        .use('url-loader')
-          .loader(require.resolve('url-loader'))
-          .options(genUrlLoaderOptions('fonts'))
+        .set('type', 'asset')
+        .set('generator', {
+          filename: genAssetSubPath('fonts')
+        })
   })
 }
diff --git a/packages/@vue/cli-service/package.json b/packages/@vue/cli-service/package.json
index 20c3e08577..c87406fea5 100644
--- a/packages/@vue/cli-service/package.json
+++ b/packages/@vue/cli-service/package.json
@@ -53,7 +53,6 @@
     "default-gateway": "^6.0.3",
     "dotenv": "^10.0.0",
     "dotenv-expand": "^5.1.0",
-    "file-loader": "^6.1.1",
     "fs-extra": "^9.1.0",
     "globby": "^11.0.2",
     "hash-sum": "^2.0.0",
@@ -72,7 +71,6 @@
     "ssri": "^8.0.1",
     "terser-webpack-plugin": "^5.1.1",
     "thread-loader": "^3.0.0",
-    "url-loader": "^4.1.1",
     "vue-loader": "^16.4.0",
     "vue-style-loader": "^4.1.3",
     "webpack": "^5.22.0",