diff --git a/packages/webpack/src/utils/postcss.js b/packages/webpack/src/utils/postcss.js
index ccc535965a..874ddd8596 100644
--- a/packages/webpack/src/utils/postcss.js
+++ b/packages/webpack/src/utils/postcss.js
@@ -154,7 +154,7 @@ export default class PostcssConfig {
    * @param postcssOptions
    * @returns {{ postcssOptions: { plugins?: unknown, order?: string, preset?: any} }}
    */
-  normalize (postcssOptions) {
+  normalize (postcssOptions, warnAboutTopLevelDeprecation = true) {
     // TODO: Remove in Nuxt 3
     if (Array.isArray(postcssOptions)) {
       consola.warn('Using an Array as `build.postcss` will be deprecated in Nuxt 3. Please switch to the object' +
@@ -168,12 +168,19 @@ export default class PostcssConfig {
       return { postcssOptions: {} }
     }
     if (postcssOptions.postcssOptions && typeof postcssOptions.postcssOptions === 'function') {
-      consola.warn('Using a Function as `build.postcss.postcssOptions` is not yet supported in Nuxt 2.16.2')
-      return { postcssOptions: {} }
+      const postcssOptionsFn = postcssOptions.postcssOptions
+      return {
+        postcssOptions: (loaderContext) => {
+          const result = this.normalize(postcssOptionsFn(loaderContext), false)
+          if (result) {
+            return result.postcssOptions
+          }
+        }
+      }
     }
     if (!('postcssOptions' in postcssOptions)) {
-      if (Object.keys(postcssOptions).length > 0) {
-        consola.warn('Using the top-level properties in `build.postcss` will be deprecated in Nuxt 3. Please move' +
+      if (Object.keys(postcssOptions).length > 0 && warnAboutTopLevelDeprecation) {
+        consola.warn('Using the top-level properties in `build.postcss` will be deprecated in Nuxt 3. Please move ' +
           'the settings to `postcss.postcssOptions`')
       }
       postcssOptions = { postcssOptions }
@@ -211,7 +218,7 @@ export default class PostcssConfig {
 
   /**
    * Load plugins from postcssOptions
-   * @param {{ postcssOptions: {plugins?: unknown, order?: string | function}}} postcssOptions
+   * @param {{ postcssOptions: {plugins?: unknown, order?: string | function }}} postcssOptions
    */
   loadPlugins (postcssOptions) {
     const { plugins, order } = postcssOptions.postcssOptions
@@ -252,7 +259,7 @@ export default class PostcssConfig {
 
     if (Array.isArray(postcssOptions.postcssOptions.plugins)) {
       defaults(postcssOptions.postcssOptions.plugins, this.defaultPostcssOptions.plugins)
-    } else {
+    } else if (typeof postcssOptions.postcssOptions !== 'function') {
       // Merge all plugins and use preset for setting up postcss-preset-env
       if (postcssOptions.postcssOptions.preset) {
         if (!postcssOptions.postcssOptions.plugins) {
diff --git a/packages/webpack/test/postcss.test.js b/packages/webpack/test/postcss.test.js
new file mode 100644
index 0000000000..e92fadf3a7
--- /dev/null
+++ b/packages/webpack/test/postcss.test.js
@@ -0,0 +1,55 @@
+import { join } from 'node:path'
+import PostcssConfig from '../src/utils/postcss'
+
+describe('webpack: postcss', () => {
+  const getConfigWithPostcssConfig = config =>
+    new PostcssConfig({
+      options: {
+        dev: false,
+        srcDir: join(__dirname),
+        rootDir: join(__dirname),
+        modulesDir: []
+      },
+      nuxt: {
+        resolver: {
+          requireModule: plugin => opts => [plugin, opts]
+        }
+      },
+      buildOptions: {
+        postcss: config
+      }
+    })
+
+  test('should have the right default configuration', () => {
+    // Use the default postcss config: stage 2
+    // https://cssdb.org/#staging-process
+    const pluginConfig = Object.fromEntries(
+      getConfigWithPostcssConfig({ postcssOptions: {} }).config().postcssOptions.plugins
+    )
+    expect(pluginConfig).toMatchInlineSnapshot(`
+      {
+        "cssnano": {
+          "preset": [
+            "default",
+            {
+              "minifyFontValues": {
+                "removeQuotes": false,
+              },
+            },
+          ],
+        },
+        "postcss-import": {
+          "resolve": [Function],
+        },
+        "postcss-preset-env": {},
+        "postcss-url": {},
+      }
+    `)
+  })
+  test('can pass a function through', () => {
+    // Use the default postcss config: stage 2
+    // https://cssdb.org/#staging-process
+    const options = getConfigWithPostcssConfig({ postcssOptions: () => ({ preset: { stage: 2 } }) }).config().postcssOptions
+    expect(typeof options).toBe('function')
+  })
+})
diff --git a/test/dev/postcss-function.test.js b/test/dev/postcss-function.test.js
new file mode 100644
index 0000000000..d7137ef9d3
--- /dev/null
+++ b/test/dev/postcss-function.test.js
@@ -0,0 +1,32 @@
+import { getPort, loadFixture, Nuxt } from '../utils'
+
+let port
+const url = route => 'http://localhost:' + port + route
+
+let nuxt = null
+
+describe('postcss configuration as function', () => {
+  beforeAll(async () => {
+    const options = await loadFixture('postcss-function')
+    nuxt = new Nuxt(options)
+    await nuxt.ready()
+
+    port = await getPort()
+    await nuxt.server.listen(port, '0.0.0.0')
+  })
+
+  for (const path of ['/css', '/postcss']) {
+    test(path, async () => {
+      const window = await nuxt.server.renderAndGetWindow(url(path))
+
+      const headHtml = window.document.head.innerHTML
+      expect(headHtml.replace(/\s+/g, '').replace(/;}/g, '}')).toContain('div.red{background-color:blue}.red{color:red}')
+
+      const element = window.document.querySelector('.red')
+      expect(element).not.toBe(null)
+      expect(element.textContent).toContain('This is red')
+      expect(element.className).toBe('red')
+      // t.is(window.getComputedStyle(element).color, 'red')
+    })
+  }
+})
diff --git a/test/fixtures/postcss-function/nuxt.config.js b/test/fixtures/postcss-function/nuxt.config.js
new file mode 100644
index 0000000000..7ee7c7fa37
--- /dev/null
+++ b/test/fixtures/postcss-function/nuxt.config.js
@@ -0,0 +1,16 @@
+const createData = async () => {
+  await new Promise(resolve => setTimeout(resolve, 500))
+  return {
+    build: {
+      postcss: {
+        postcssOptions: () => ({
+          plugins: [
+            ['postcss-preset-env', { features: { 'custom-selectors': true } }]
+          ]
+        })
+      }
+    }
+  }
+}
+
+export default createData
diff --git a/test/fixtures/postcss-function/pages/css.vue b/test/fixtures/postcss-function/pages/css.vue
new file mode 100644
index 0000000000..8bf4d9da7d
--- /dev/null
+++ b/test/fixtures/postcss-function/pages/css.vue
@@ -0,0 +1,15 @@
+<template>
+  <div class="red">
+    This is red
+  </div>
+</template>
+
+<style>
+@custom-selector :--red div.red;
+:--red {
+  background-color: blue;
+}
+.red {
+  color: red;
+}
+</style>
diff --git a/test/fixtures/postcss-function/pages/postcss.vue b/test/fixtures/postcss-function/pages/postcss.vue
new file mode 100644
index 0000000000..976a4f653b
--- /dev/null
+++ b/test/fixtures/postcss-function/pages/postcss.vue
@@ -0,0 +1,15 @@
+<template>
+  <div class="red">
+    This is red
+  </div>
+</template>
+
+<style lang="postcss">
+@custom-selector :--red div.red;
+:--red {
+  background-color: blue;
+}
+.red {
+  color: red;
+}
+</style>
diff --git a/test/fixtures/postcss-function/postcss-function.test.js b/test/fixtures/postcss-function/postcss-function.test.js
new file mode 100644
index 0000000000..1ec7857263
--- /dev/null
+++ b/test/fixtures/postcss-function/postcss-function.test.js
@@ -0,0 +1,3 @@
+import { buildFixture } from '../../utils/build'
+
+buildFixture('postcss-function')