diff --git a/client/webpack.local.config.js b/client/webpack.local.config.js
index 47f9a8e19..8a35bde16 100644
--- a/client/webpack.local.config.js
+++ b/client/webpack.local.config.js
@@ -95,9 +95,18 @@ module.exports = {
         }
       },
       {
-        test: /\.(ttf|eot|svg|ico)(\?v=[0-9]\.[0-9]\.[0-9])?$/,
+        test: /\.(ttf|eot|svg)(\?v=[0-9]\.[0-9]\.[0-9])?$/,
         loader: 'file-loader'
       },
+      {
+        test: /\.(ico)(\?v=[0-9]\.[0-9]\.[0-9])?$/,
+        loader: 'file-loader',
+        options: {
+          // Handle favicon.ico separately as it needs to preserve its name to be applied correctly.
+          // See https://github.com/coryhouse/react-slingshot/issues/128#issuecomment-216363426.
+          name: '[name].[ext]',
+        },
+      },
       {
         test: /\.jsx?$/,
         exclude: /node_modules|vendor/,