diff --git a/packages/next/client/image.tsx b/packages/next/client/image.tsx
index 620dd7f5750118b11daeef10abb067823e31aba7..e54cbea4d42eac25d472032e8f8657057a943f6f 100644
--- a/packages/next/client/image.tsx
+++ b/packages/next/client/image.tsx
@@ -1,4 +1,4 @@
-import React, { ReactElement } from 'react'
+import React, { ReactElement, useEffect } from 'react'
 import Head from '../next-server/lib/head'
 
 const loaders: { [key: string]: (props: LoaderProps) => string } = {
@@ -21,12 +21,49 @@ type ImageProps = Omit<JSX.IntrinsicElements['img'], 'src' | 'sizes'> & {
   host?: string
   sizes?: string
   priority?: boolean
+  lazy: boolean
+  className: string
   unoptimized?: boolean
 }
 
 let imageData: any = process.env.__NEXT_IMAGE_OPTS
 const breakpoints = imageData.sizes || [640, 1024, 1600]
 
+let cachedObserver: IntersectionObserver
+const IntersectionObserver =
+  typeof window !== 'undefined' ? window.IntersectionObserver : null
+
+function getObserver(): IntersectionObserver | undefined {
+  // Return shared instance of IntersectionObserver if already created
+  if (cachedObserver) {
+    return cachedObserver
+  }
+
+  // Only create shared IntersectionObserver if supported in browser
+  if (!IntersectionObserver) {
+    return undefined
+  }
+
+  return (cachedObserver = new IntersectionObserver(
+    (entries) => {
+      entries.forEach((entry) => {
+        if (entry.isIntersecting) {
+          let lazyImage = entry.target as HTMLImageElement
+          if (lazyImage.dataset.src) {
+            lazyImage.src = lazyImage.dataset.src
+          }
+          if (lazyImage.dataset.srcset) {
+            lazyImage.srcset = lazyImage.dataset.srcset
+          }
+          lazyImage.classList.remove('__lazy')
+          cachedObserver.unobserve(lazyImage)
+        }
+      })
+    },
+    { rootMargin: '200px' }
+  ))
+}
+
 function computeSrc(src: string, host: string, unoptimized: boolean): string {
   if (unoptimized) {
     return src
@@ -106,6 +143,8 @@ export default function Image({
   sizes,
   unoptimized = false,
   priority = false,
+  lazy,
+  className,
   ...rest
 }: ImageProps) {
   // Sanity Checks:
@@ -122,6 +161,15 @@ export default function Image({
     }
     host = 'default'
   }
+  // If priority and lazy are present, log an error and use priority only.
+  if (priority && lazy) {
+    if (process.env.NODE_ENV !== 'production') {
+      console.error(
+        `Image with src ${src} has both priority and lazy tags. Only one should be used.`
+      )
+    }
+    lazy = false
+  }
 
   host = host || 'default'
 
@@ -130,20 +178,80 @@ export default function Image({
     src = src.slice(1)
   }
 
+  let thisEl: any
+
+  useEffect(() => {
+    if (lazy) {
+      const observer = getObserver()
+      if (observer) {
+        observer.observe(thisEl)
+        return () => {
+          observer.unobserve(thisEl)
+        }
+      }
+    }
+  }, [thisEl, lazy])
+
   // Generate attribute values
   const imgSrc = computeSrc(src, host, unoptimized)
-  const imgAttributes: { src: string; srcSet?: string } = { src: imgSrc }
+  let imgSrcset = null
   if (!unoptimized) {
-    imgAttributes.srcSet = generateSrcSet({
+    imgSrcset = generateSrcSet({
       src,
       host: host,
       widths: breakpoints,
     })
   }
+
+  const imgAttributes: {
+    src?: string
+    srcSet?: string
+    'data-src'?: string
+    'data-srcset'?: string
+  } = {}
+  if (!lazy) {
+    imgAttributes.src = imgSrc
+    if (imgSrcset) {
+      imgAttributes.srcSet = imgSrcset
+    }
+  } else {
+    imgAttributes['data-src'] = imgSrc
+    if (imgSrcset) {
+      imgAttributes['data-srcset'] = imgSrcset
+    }
+    className = className ? className + ' __lazy' : '__lazy'
+  }
+
   // No need to add preloads on the client side--by the time the application is hydrated,
   // it's too late for preloads
   const shouldPreload = priority && typeof window === 'undefined'
 
+  let imgElement
+  if (className) {
+    imgElement = (
+      <img
+        {...rest}
+        ref={(el) => {
+          thisEl = el
+        }}
+        {...imgAttributes}
+        className={className}
+        sizes={sizes}
+      />
+    )
+  } else {
+    imgElement = (
+      <img
+        ref={(el) => {
+          thisEl = el
+        }}
+        {...rest}
+        {...imgAttributes}
+        sizes={sizes}
+      />
+    )
+  }
+
   return (
     <div>
       {shouldPreload
@@ -155,7 +263,7 @@ export default function Image({
             sizes,
           })
         : ''}
-      <img {...rest} {...imgAttributes} sizes={sizes} />
+      {imgElement}
     </div>
   )
 }
diff --git a/test/integration/image-component/basic/pages/index.js b/test/integration/image-component/basic/pages/index.js
index a21a0e78815903670f12e7fc1c602df55fc99bee..f541cb5b6c67fef5c351bcd1e84fac3ea4757f61 100644
--- a/test/integration/image-component/basic/pages/index.js
+++ b/test/integration/image-component/basic/pages/index.js
@@ -36,6 +36,9 @@ const Page = () => {
       <Link href="/client-side">
         <a id="clientlink">Client Side</a>
       </Link>
+      <Link href="/lazy">
+        <a id="lazylink">lazy</a>
+      </Link>
       <p id="stubtext">This is the index page</p>
     </div>
   )
diff --git a/test/integration/image-component/basic/pages/lazy.js b/test/integration/image-component/basic/pages/lazy.js
new file mode 100644
index 0000000000000000000000000000000000000000..f352e6bdce413eb32ff5274f4e7ec3014986b988
--- /dev/null
+++ b/test/integration/image-component/basic/pages/lazy.js
@@ -0,0 +1,37 @@
+import React from 'react'
+import Image from 'next/image'
+
+const Lazy = () => {
+  return (
+    <div>
+      <p id="stubtext">This is a page with lazy-loaded images</p>
+      <Image
+        id="lazy-top"
+        src="foo1.jpg"
+        height="400px"
+        width="300px"
+        lazy
+      ></Image>
+      <div style={{ height: '2000px' }}></div>
+      <Image
+        id="lazy-mid"
+        src="foo2.jpg"
+        lazy
+        height="400px"
+        width="300px"
+        className="exampleclass"
+      ></Image>
+      <div style={{ height: '2000px' }}></div>
+      <Image
+        id="lazy-bottom"
+        src="https://www.otherhost.com/foo3.jpg"
+        height="400px"
+        width="300px"
+        unoptimized
+        lazy
+      ></Image>
+    </div>
+  )
+}
+
+export default Lazy
diff --git a/test/integration/image-component/basic/test/index.test.js b/test/integration/image-component/basic/test/index.test.js
index 483d5a579f0e33499bf93c62d9ca2277452ddffb..67315a2b15f89fd98f721b6a855134a36a590347 100644
--- a/test/integration/image-component/basic/test/index.test.js
+++ b/test/integration/image-component/basic/test/index.test.js
@@ -71,6 +71,70 @@ function runTests() {
   })
 }
 
+function lazyLoadingTests() {
+  it('should have loaded the first image immediately', async () => {
+    expect(await browser.elementById('lazy-top').getAttribute('src')).toBe(
+      'https://example.com/myaccount/foo1.jpg'
+    )
+    expect(await browser.elementById('lazy-top').getAttribute('srcset')).toBe(
+      'https://example.com/myaccount/foo1.jpg?w=480 480w, https://example.com/myaccount/foo1.jpg?w=1024 1024w, https://example.com/myaccount/foo1.jpg?w=1600 1600w'
+    )
+  })
+  it('should not have loaded the second image immediately', async () => {
+    expect(
+      await browser.elementById('lazy-mid').getAttribute('src')
+    ).toBeFalsy()
+    expect(
+      await browser.elementById('lazy-mid').getAttribute('srcset')
+    ).toBeFalsy()
+  })
+  it('should pass through classes on a lazy loaded image', async () => {
+    expect(await browser.elementById('lazy-mid').getAttribute('class')).toBe(
+      'exampleclass __lazy'
+    )
+  })
+  it('should load the second image after scrolling down', async () => {
+    let viewportHeight = await browser.eval(`window.innerHeight`)
+    let topOfMidImage = await browser.eval(
+      `document.getElementById('lazy-mid').offsetTop`
+    )
+    let buffer = 150
+    await browser.eval(
+      `window.scrollTo(0, ${topOfMidImage - (viewportHeight + buffer)})`
+    )
+    expect(await browser.elementById('lazy-mid').getAttribute('src')).toBe(
+      'https://example.com/myaccount/foo2.jpg'
+    )
+    expect(await browser.elementById('lazy-mid').getAttribute('srcset')).toBe(
+      'https://example.com/myaccount/foo2.jpg?w=480 480w, https://example.com/myaccount/foo2.jpg?w=1024 1024w, https://example.com/myaccount/foo2.jpg?w=1600 1600w'
+    )
+  })
+  it('should not have loaded the third image after scrolling down', async () => {
+    expect(
+      await browser.elementById('lazy-bottom').getAttribute('src')
+    ).toBeFalsy()
+    expect(
+      await browser.elementById('lazy-bottom').getAttribute('srcset')
+    ).toBeFalsy()
+  })
+  it('should load the third image, which is unoptimized, after scrolling further down', async () => {
+    let viewportHeight = await browser.eval(`window.innerHeight`)
+    let topOfBottomImage = await browser.eval(
+      `document.getElementById('lazy-bottom').offsetTop`
+    )
+    let buffer = 150
+    await browser.eval(
+      `window.scrollTo(0, ${topOfBottomImage - (viewportHeight + buffer)})`
+    )
+    expect(await browser.elementById('lazy-bottom').getAttribute('src')).toBe(
+      'https://www.otherhost.com/foo3.jpg'
+    )
+    expect(
+      await browser.elementById('lazy-bottom').getAttribute('srcset')
+    ).toBeFalsy()
+  })
+}
+
 async function hasPreloadLinkMatchingUrl(url) {
   const links = await browser.elementsByCss('link')
   let foundMatch = false
@@ -165,4 +229,24 @@ describe('Image Component Tests', () => {
       })
     })
   })
+  describe('SSR Lazy Loading Tests', () => {
+    beforeAll(async () => {
+      browser = await webdriver(appPort, '/lazy')
+    })
+    afterAll(async () => {
+      browser = null
+    })
+    lazyLoadingTests()
+  })
+  describe('Client-side Lazy Loading Tests', () => {
+    beforeAll(async () => {
+      browser = await webdriver(appPort, '/')
+      await browser.waitForElementByCss('#lazylink').click()
+      await waitFor(500)
+    })
+    afterAll(async () => {
+      browser = null
+    })
+    lazyLoadingTests()
+  })
 })