diff --git a/packages/nuxt3/src/builder/app.ts b/packages/nuxt3/src/builder/app.ts
index 9c67ac41f6..169eafc044 100644
--- a/packages/nuxt3/src/builder/app.ts
+++ b/packages/nuxt3/src/builder/app.ts
@@ -14,7 +14,7 @@ export interface NuxtApp {
 }
 
 // Scan project structure
-export async function resolveApp (builder: Builder, options: Partial<NuxtApp> = {}): Promise<NuxtApp> {
+export async function createApp (builder: Builder, options: Partial<NuxtApp> = {}): Promise<NuxtApp> {
   const { nuxt } = builder
 
   // Create base app object
diff --git a/packages/nuxt3/src/builder/builder.ts b/packages/nuxt3/src/builder/builder.ts
index 3aaac73bf6..a24bd88e6c 100644
--- a/packages/nuxt3/src/builder/builder.ts
+++ b/packages/nuxt3/src/builder/builder.ts
@@ -10,7 +10,7 @@ import {
   NuxtTemplate
 } from './template'
 import { createWatcher } from './watch'
-import { resolveApp, NuxtApp } from './app'
+import { createApp, NuxtApp } from './app'
 import Ignore from './ignore'
 
 export class Builder {
@@ -56,8 +56,8 @@ function watch (builder: Builder) {
   nuxtAppWatcher.watchAll(debounce(() => compileTemplates(builder.templates, nuxt.options.buildDir), 100))
 
   // Watch user app
-  const appPattern = `${builder.app.srcDir}/**/*.{${nuxt.options.extensions.join(',')}}`
-  const appWatcher = createWatcher(appPattern, { ...options, cwd: builder.app.srcDir }, ignore)
+  const appPattern = `${builder.app.dir}/**/*.{${nuxt.options.extensions.join(',')}}`
+  const appWatcher = createWatcher(appPattern, { ...options, cwd: builder.app.dir }, ignore)
   // appWatcher.debug('srcDir')
   const refreshTemplates = debounce(() => generate(builder), 100)
   // Watch for App.vue creation
@@ -70,7 +70,7 @@ export async function generate (builder: Builder) {
   const { nuxt } = builder
 
   await fsExtra.mkdirp(nuxt.options.buildDir)
-  builder.app = await resolveApp(builder)
+  builder.app = await createApp(builder)
 
   const templatesDir = join(builder.nuxt.options.appDir, '_templates')
   const appTemplates = await scanTemplates(templatesDir, templateData(builder))