diff --git a/.changeset/dry-insects-burn.md b/.changeset/dry-insects-burn.md
new file mode 100644
index 0000000000..fb646ba2fe
--- /dev/null
+++ b/.changeset/dry-insects-burn.md
@@ -0,0 +1,6 @@
+---
+"@medusajs/medusa": patch
+"@medusajs/framework": patch
+---
+
+fix: switch from tsc watch to chokidar
diff --git a/packages/core/framework/package.json b/packages/core/framework/package.json
index ad389bf4dd..56e2b1a9cb 100644
--- a/packages/core/framework/package.json
+++ b/packages/core/framework/package.json
@@ -82,6 +82,7 @@
     "@medusajs/workflows-sdk": "~2.3.1",
     "@opentelemetry/api": "^1.9.0",
     "@types/express": "^4.17.17",
+    "chokidar": "^3.4.2",
     "compression": "1.7.4",
     "connect-redis": "5.2.0",
     "cookie-parser": "^1.4.6",
diff --git a/packages/core/framework/src/build-tools/compiler.ts b/packages/core/framework/src/build-tools/compiler.ts
index a0f821eb20..a13a9b2076 100644
--- a/packages/core/framework/src/build-tools/compiler.ts
+++ b/packages/core/framework/src/build-tools/compiler.ts
@@ -1,8 +1,9 @@
 import path from "path"
-import { getConfigFile } from "@medusajs/utils"
-import type { AdminOptions, ConfigModule, Logger } from "@medusajs/types"
-import { rm, access, constants, copyFile, writeFile, mkdir } from "fs/promises"
+import chokidar from "chokidar"
 import type tsStatic from "typescript"
+import { FileSystem, getConfigFile } from "@medusajs/utils"
+import { rm, access, constants, copyFile } from "fs/promises"
+import type { AdminOptions, ConfigModule, Logger } from "@medusajs/types"
 
 /**
  * The compiler exposes the opinionated APIs for compiling Medusa
@@ -27,7 +28,6 @@ export class Compiler {
   #adminSourceFolder: string
   #pluginsDistFolder: string
   #backendIgnoreFiles: string[]
-  #pluginOptionsPath: string
   #adminOnlyDistFolder: string
   #tsCompiler?: typeof tsStatic
 
@@ -38,10 +38,6 @@ export class Compiler {
     this.#adminSourceFolder = path.join(this.#projectRoot, "src/admin")
     this.#adminOnlyDistFolder = path.join(this.#projectRoot, ".medusa/admin")
     this.#pluginsDistFolder = path.join(this.#projectRoot, ".medusa/server")
-    this.#pluginOptionsPath = path.join(
-      this.#projectRoot,
-      ".medusa/server/medusa-plugin-options.json"
-    )
     this.#backendIgnoreFiles = [
       "integration-tests",
       "test",
@@ -141,13 +137,14 @@ export class Compiler {
   }
 
   /**
-   * Ensures a directory exists
+   * Returns a boolean indicating if a file extension belongs
+   * to a JavaScript or TypeScript file
    */
-  async #ensureDir(path: string, clean?: boolean) {
-    if (clean) {
-      await this.#clean(path)
+  #isScriptFile(filePath: string) {
+    if (filePath.endsWith(".ts") && !filePath.endsWith(".d.ts")) {
+      return true
     }
-    await mkdir(path, { recursive: true })
+    return filePath.endsWith(".js")
   }
 
   /**
@@ -167,24 +164,6 @@ export class Compiler {
     return { configFilePath, configModule }
   }
 
-  /**
-   * Creates medusa-plugin-options.json file that contains some
-   * metadata related to the plugin, which could be helpful
-   * for MedusaJS loaders during development
-   */
-  async #createPluginOptionsFile() {
-    await writeFile(
-      this.#pluginOptionsPath,
-      JSON.stringify(
-        {
-          srcDir: path.join(this.#projectRoot, "src"),
-        },
-        null,
-        2
-      )
-    )
-  }
-
   /**
    * Prints typescript diagnostic messages
    */
@@ -437,7 +416,7 @@ export class Compiler {
      */
     const { emitResult, diagnostics } = await this.#emitBuildOutput(
       tsConfig,
-      ["integration-tests", "test", "unit-tests", "src/admin"],
+      this.#backendIgnoreFiles,
       dist
     )
 
@@ -472,54 +451,71 @@ export class Compiler {
    * The "onFileChange" argument can be used to get notified when
    * a file has changed.
    */
-  async developPluginBackend(onFileChange?: () => void) {
-    await this.#ensureDir(this.#pluginsDistFolder, true)
-    await this.#createPluginOptionsFile()
-    const ts = await this.#loadTSCompiler()
+  async developPluginBackend(
+    transformer: (filePath: string) => Promise<string>,
+    onFileChange?: (
+      filePath: string,
+      action: "add" | "change" | "unlink"
+    ) => void
+  ) {
+    const fs = new FileSystem(this.#pluginsDistFolder)
+    await fs.createJson("medusa-plugin-options.json", {
+      srcDir: path.join(this.#projectRoot, "src"),
+    })
 
-    /**
-     * Format host is needed to print diagnostic messages
-     */
-    const formatHost: tsStatic.FormatDiagnosticsHost = {
-      getCanonicalFileName: (path) => path,
-      getCurrentDirectory: ts.sys.getCurrentDirectory,
-      getNewLine: () => ts.sys.newLine,
-    }
+    const watcher = chokidar.watch(["."], {
+      ignoreInitial: true,
+      cwd: this.#projectRoot,
+      ignored: [
+        /(^|[\\/\\])\../,
+        "node_modules",
+        "dist",
+        "static",
+        "private",
+        ".medusa/**/*",
+        ...this.#backendIgnoreFiles,
+      ],
+    })
 
-    /**
-     * Creating a watcher compiler host to watch files and recompile
-     * them as they are changed
-     */
-    const host = ts.createWatchCompilerHost(
-      this.#tsConfigPath,
-      {
-        outDir: this.#pluginsDistFolder,
-        noCheck: true,
-      },
-      ts.sys,
-      ts.createEmitAndSemanticDiagnosticsBuilderProgram,
-      (diagnostic) => this.#printDiagnostics(ts, [diagnostic]),
-      (diagnostic) => {
-        if (typeof diagnostic.messageText === "string") {
-          this.#logger.info(diagnostic.messageText)
-        } else {
-          this.#logger.info(
-            ts.formatDiagnosticsWithColorAndContext([diagnostic], formatHost)
-          )
-        }
-      },
-      {
-        excludeDirectories: this.#backendIgnoreFiles,
+    watcher.on("add", async (file) => {
+      if (!this.#isScriptFile(file)) {
+        return
       }
-    )
+      const relativePath = path.relative(this.#projectRoot, file)
+      const outputPath = relativePath.replace(/\.ts$/, ".js")
 
-    const origPostProgramCreate = host.afterProgramCreate
-    host.afterProgramCreate = (program) => {
-      origPostProgramCreate!(program)
-      onFileChange?.()
-    }
+      this.#logger.info(`${relativePath} updated: Republishing changes`)
+      await fs.create(outputPath, await transformer(file))
 
-    ts.createWatchProgram(host)
+      onFileChange?.(file, "add")
+    })
+    watcher.on("change", async (file) => {
+      if (!this.#isScriptFile(file)) {
+        return
+      }
+      const relativePath = path.relative(this.#projectRoot, file)
+      const outputPath = relativePath.replace(/\.ts$/, ".js")
+
+      this.#logger.info(`${relativePath} updated: Republishing changes`)
+      await fs.create(outputPath, await transformer(file))
+
+      onFileChange?.(file, "change")
+    })
+    watcher.on("unlink", async (file) => {
+      if (!this.#isScriptFile(file)) {
+        return
+      }
+      const relativePath = path.relative(this.#projectRoot, file)
+      const outputPath = relativePath.replace(/\.ts$/, ".js")
+
+      this.#logger.info(`${relativePath} removed: Republishing changes`)
+      await fs.remove(outputPath)
+      onFileChange?.(file, "unlink")
+    })
+
+    watcher.on("ready", () => {
+      this.#logger.info("watching for file changes")
+    })
   }
 
   async buildPluginAdminExtensions(bundler: {
diff --git a/packages/medusa/src/commands/plugin/develop.ts b/packages/medusa/src/commands/plugin/develop.ts
index 623d8a64a9..b808bdad29 100644
--- a/packages/medusa/src/commands/plugin/develop.ts
+++ b/packages/medusa/src/commands/plugin/develop.ts
@@ -1,4 +1,5 @@
 import path from "path"
+import * as swcCore from "@swc/core"
 import { execFile } from "child_process"
 import { logger } from "@medusajs/framework/logger"
 import { Compiler } from "@medusajs/framework/build-tools"
@@ -10,9 +11,18 @@ export default async function developPlugin({
 }) {
   let isBusy = false
   const compiler = new Compiler(directory, logger)
+  const parsedConfig = await compiler.loadTSConfigFile()
+  if (!parsedConfig) {
+    return
+  }
+
   const yalcBin = path.join(path.dirname(require.resolve("yalc")), "yalc.js")
 
-  await compiler.developPluginBackend(async () => {
+  /**
+   * Publishes the build output to the registry and updates
+   * installations
+   */
+  function publishChanges() {
     /**
      * Here we avoid multiple publish calls when the filesystem is
      * changed too quickly. This might result in stale content in
@@ -46,5 +56,47 @@ export default async function developPlugin({
         console.error(stderr)
       }
     )
-  })
+  }
+
+  /**
+   * Transforms a given file using @swc/core
+   */
+  async function transformFile(filePath: string) {
+    const output = await swcCore.transformFile(filePath, {
+      sourceMaps: "inline",
+      module: {
+        type: "commonjs",
+        strictMode: true,
+        noInterop: false,
+      },
+      jsc: {
+        externalHelpers: false,
+        target: "es2021",
+        parser: {
+          syntax: "typescript",
+          tsx: true,
+          decorators: true,
+          dynamicImport: true,
+        },
+        transform: {
+          legacyDecorator: true,
+          decoratorMetadata: true,
+          react: {
+            throwIfNamespace: false,
+            useBuiltins: false,
+            pragma: "React.createElement",
+            pragmaFrag: "React.Fragment",
+            importSource: "react",
+            runtime: "automatic",
+          },
+        },
+        keepClassNames: true,
+        baseUrl: directory,
+      },
+    })
+    return output.code
+  }
+
+  await compiler.buildPluginBackend(parsedConfig)
+  await compiler.developPluginBackend(transformFile, publishChanges)
 }
diff --git a/yarn.lock b/yarn.lock
index a1052c33e9..3016a6f277 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -5766,6 +5766,7 @@ __metadata:
     "@types/express": ^4.17.17
     "@types/jsonwebtoken": ^8.5.9
     awilix: ^8.0.1
+    chokidar: ^3.4.2
     compression: 1.7.4
     connect-redis: 5.2.0
     cookie-parser: ^1.4.6