diff --git a/cli/index.ts b/cli/index.ts
index 6281e5ca..f2dd4a3f 100644
--- a/cli/index.ts
+++ b/cli/index.ts
@@ -108,7 +108,7 @@ YargsParser.command(
         redocOptions: argv.options || {},
       });
     },
-  )
+)
   .demandCommand()
   .options('t', {
     alias: 'template',
@@ -159,11 +159,17 @@ async function serve(port: number, pathToSpec: string, options: Options = {}) {
   server.listen(port, () => console.log(`Server started: http://127.0.0.1:${port}`));
 
   if (options.watch && existsSync(pathToSpec)) {
+    const pathToSpecDirectory = dirname(pathToSpec);
+    const watchOptions = {
+      recursive: true
+    };
+
     watch(
-      pathToSpec,
+      pathToSpecDirectory,
+      watchOptions,
       debounce(async (event, filename) => {
-        if (event === 'change' || (event === 'rename' && existsSync(filename))) {
-          console.log(`${pathToSpec} changed, updating docs`);
+        if (event === 'change' || event === 'rename') {
+          console.log(`${join(pathToSpecDirectory, filename)} changed, updating docs`);
           try {
             spec = await loadAndBundleSpec(pathToSpec);
             pageHTML = await getPageHTML(spec, pathToSpec, options);
@@ -174,7 +180,7 @@ async function serve(port: number, pathToSpec: string, options: Options = {}) {
         }
       }, 2200),
     );
-    console.log(`👀  Watching ${pathToSpec} for changes...`);
+    console.log(`👀  Watching ${pathToSpecDirectory} for changes...`);
   }
 }
 
@@ -229,13 +235,13 @@ async function getPageHTML(
       ssr
         ? 'hydrate(__redoc_state, container);'
         : `init("spec.json", ${JSON.stringify(redocOptions)}, container)`
-    };
+      };
 
     </script>`,
     redocHead: ssr
       ? (cdn
-          ? '<script src="https://unpkg.com/redoc@next/bundles/redoc.standalone.js"></script>'
-          : `<script>${redocStandaloneSrc}</script>`) + css
+        ? '<script src="https://unpkg.com/redoc@next/bundles/redoc.standalone.js"></script>'
+        : `<script>${redocStandaloneSrc}</script>`) + css
       : '<script src="redoc.standalone.js"></script>',
     title,
   });