diff --git a/index.js b/index.js
index eb68a22..73160b6 100644
--- a/index.js
+++ b/index.js
@@ -7,6 +7,7 @@ const compile = require('./lib/compile');
 const cleanup = require('./lib/cleanup');
 const run = require('./lib/run');
 const serve = require('./lib/serve');
+const packExternalModules = require('./lib/packExternalModules')
 
 class ServerlessWebpack {
   constructor(serverless, options) {
@@ -19,7 +20,8 @@ class ServerlessWebpack {
       compile,
       cleanup,
       run,
-      serve
+      serve,
+      packExternalModules
     );
 
     this.commands = {
@@ -28,6 +30,7 @@ class ServerlessWebpack {
         lifecycleEvents: [
           'validate',
           'compile',
+          'packExternalModules',
         ],
         options: {
           out: {
@@ -89,7 +92,8 @@ class ServerlessWebpack {
     this.hooks = {
       'before:deploy:createDeploymentArtifacts': () => BbPromise.bind(this)
         .then(this.validate)
-        .then(this.compile),
+        .then(this.compile)
+        .then(this.packExternalModules),
 
       'after:deploy:createDeploymentArtifacts': () => BbPromise.bind(this)
         .then(this.cleanup),
@@ -100,6 +104,9 @@ class ServerlessWebpack {
       'webpack:compile': () => BbPromise.bind(this)
         .then(this.compile),
 
+      'webpack:packExternalModules': () => BbPromise.bind(this)
+        .then(this.packExternalModules),
+
       'webpack:invoke:invoke': () => BbPromise.bind(this)
         .then(this.validate)
         .then(this.compile)
diff --git a/lib/packExternalModules.js b/lib/packExternalModules.js
new file mode 100644
index 0000000..47ce647
--- /dev/null
+++ b/lib/packExternalModules.js
@@ -0,0 +1,44 @@
+'use strict';
+
+const BbPromise = require('bluebird');
+const webpack = require('webpack');
+const fs = require('fs');
+const path = require('path');
+const npm = require('npm-programmatic');
+
+module.exports = {
+  packExternalModules() {
+    
+    this.serverless.cli.log(this.webpackOutputPath);
+
+    this.serverless.cli.log(JSON.stringify(this.webpackConfig.externals));
+
+    const externals = this.webpackConfig.externals;
+
+    return BbPromise.resolve().then(() => {
+        if (!externals || externals.length === 0) {
+            return;
+        }
+       
+        this.serverless.cli.log('packing external modules');
+
+        const tmpPackageJson = path.join(this.webpackOutputPath, 'package.json'); 
+    
+        // create a temp package.json in dist directory so that we can install the dependencies later.
+        fs.writeFileSync(tmpPackageJson, "{}");
+
+        return new BbPromise((resolve, reject) => {
+            npm.install(externals, {
+                cwd: this.webpackOutputPath,
+                save: false
+            }).then(() => {
+                fs.unlink(tmpPackageJson);
+                resolve()
+            }).catch(e => {
+                fs.unlink(tmpPackageJson);
+                reject(e);
+            })
+        })
+    })
+  },
+};
diff --git a/package.json b/package.json
index dae65b0..2995ecb 100644
--- a/package.json
+++ b/package.json
@@ -31,6 +31,7 @@
     "body-parser": "^1.15.2",
     "express": "^4.14.0",
     "fs-extra": "^0.26.7",
+    "npm-programmatic": "0.0.5",
     "webpack": "^1.13.1"
   },
   "devDependencies": {