diff --git a/.changeset/ninety-toys-deny.md b/.changeset/ninety-toys-deny.md
new file mode 100644
index 0000000..c068eb2
--- /dev/null
+++ b/.changeset/ninety-toys-deny.md
@@ -0,0 +1,5 @@
+---
+'xstate-codegen': patch
+---
+
+Regenerate compiled files on yarn/npm reinstall.
diff --git a/packages/xstate-compiled/package.json b/packages/xstate-compiled/package.json
index b6c123a..59ae18e 100644
--- a/packages/xstate-compiled/package.json
+++ b/packages/xstate-compiled/package.json
@@ -20,6 +20,7 @@
     "glob": "^7.1.6",
     "handlebars": "^4.7.6",
     "handlebars-helpers": "^0.10.0",
+    "mkdirp": "^1.0.4",
     "pkg-up": "^3.1.0",
     "rimraf": "^3.0.2",
     "rollup": "^2.26.3",
@@ -33,6 +34,7 @@
     "@types/glob": "^7.1.3",
     "@types/handlebars-helpers": "^0.5.2",
     "@types/minimist": "^1.2.0",
+    "@types/mkdirp": "^1.0.1",
     "@types/node": "^14.0.14",
     "@types/rimraf": "^3.0.0",
     "@xstate/react": "^0.8.1",
diff --git a/packages/xstate-compiled/src/index.ts b/packages/xstate-compiled/src/index.ts
index 55ff976..cb630c5 100755
--- a/packages/xstate-compiled/src/index.ts
+++ b/packages/xstate-compiled/src/index.ts
@@ -6,7 +6,7 @@ import path from 'path';
 import minimist from 'minimist';
 import { introspectMachine } from './introspectMachine';
 import { extractMachines } from './extractMachines';
-import { printToFile, printJsFiles } from './printToFile';
+import { printToFile, printJsFiles, getTargetDir } from './printToFile';
 
 const { _: patterns, ...objectArgs } = minimist(process.argv.slice(2));
 const onlyOnce = objectArgs.once;
@@ -105,3 +105,21 @@ async function addToCache(filePath: string) {
 function removeFromCache(filePath: string) {
   delete fileCache[filePath];
 }
+
+if (!onlyOnce) {
+  const start = () => {
+    const targetDirWatcher = chokidar.watch(`${getTargetDir()}/package.json`, {
+      persistent: true,
+      disableGlobbing: true,
+      ignoreInitial: true,
+    });
+    targetDirWatcher.on('unlink', () => {
+      printToFile(fileCache, objectArgs.outDir);
+      console.log('Generated files vanished, written again'.red.bold);
+      // need to restart, it won't work otherwise
+      targetDirWatcher.close();
+      start();
+    });
+  };
+  start();
+}
diff --git a/packages/xstate-compiled/src/printToFile.ts b/packages/xstate-compiled/src/printToFile.ts
index d3cd813..6e15678 100644
--- a/packages/xstate-compiled/src/printToFile.ts
+++ b/packages/xstate-compiled/src/printToFile.ts
@@ -6,22 +6,7 @@ import path from 'path';
 import { introspectMachine, SubState } from './introspectMachine';
 import pkgUp from 'pkg-up';
 import rimraf from 'rimraf';
-
-const ensureFolderExists = (absoluteDir: string) => {
-  if (fs.existsSync(absoluteDir)) {
-    return;
-  }
-  fs.mkdirSync(absoluteDir);
-};
-
-const ensureMultipleFoldersExist = (absoluteRoot: string, paths: string[]) => {
-  let concatenatedPath = absoluteRoot;
-
-  paths.forEach((dir) => {
-    concatenatedPath = path.join(concatenatedPath, dir);
-    ensureFolderExists(concatenatedPath);
-  });
-};
+import mkdirp from 'mkdirp';
 
 const renderSubstate = (subState: SubState): string => {
   return `{
@@ -83,19 +68,20 @@ export const getNodeModulesDir = () => {
   return targetDir;
 };
 
+export const getTargetDir = () =>
+  path.resolve(getNodeModulesDir(), '@xstate/compiled');
+
 export const printToFile = (
   cache: Record<string, ReturnType<typeof introspectMachine> & { id: string }>,
   outDir?: string,
 ) => {
   const files = getDeclarationFileTexts(cache);
-  const nodeModulesDir = getNodeModulesDir();
-  const targetDir = path.resolve(nodeModulesDir, '@xstate/compiled');
+  const targetDir = getTargetDir();
 
   /** Delete @xstate/compiled directory so that it triggers VSCode to re-check it */
   rimraf.sync(path.join(targetDir, '*.d.ts'));
 
   printJsFiles();
-  ensureMultipleFoldersExist(nodeModulesDir, ['@xstate', 'compiled']);
 
   fs.writeFileSync(
     outDir
@@ -124,10 +110,9 @@ export const printToFile = (
  * to statically analyse
  */
 export const printJsFiles = () => {
-  const nodeModulesDir = getNodeModulesDir();
-  const targetDir = path.resolve(nodeModulesDir, '@xstate/compiled');
+  const targetDir = getTargetDir();
 
-  ensureMultipleFoldersExist(nodeModulesDir, ['@xstate', 'compiled']);
+  mkdirp.sync(targetDir);
 
   const indexJsTemplate = fs
     .readFileSync(path.resolve(__dirname, './templates/index.js.hbs'))
diff --git a/yarn.lock b/yarn.lock
index 1be2be8..50cfb25 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -614,6 +614,13 @@
   resolved "https://registry.yarnpkg.com/@types/minimist/-/minimist-1.2.0.tgz#69a23a3ad29caf0097f06eda59b361ee2f0639f6"
   integrity sha1-aaI6OtKcrwCX8G7aWbNh7i8GOfY=
 
+"@types/mkdirp@^1.0.1":
+  version "1.0.1"
+  resolved "https://registry.yarnpkg.com/@types/mkdirp/-/mkdirp-1.0.1.tgz#0930b948914a78587de35458b86c907b6e98bbf6"
+  integrity sha512-HkGSK7CGAXncr8Qn/0VqNtExEE+PHMWb+qlR1faHMao7ng6P3tAaoWWBMdva0gL5h4zprjIO89GJOLXsMcDm1Q==
+  dependencies:
+    "@types/node" "*"
+
 "@types/node@*":
   version "14.0.24"
   resolved "https://registry.yarnpkg.com/@types/node/-/node-14.0.24.tgz#b0f86f58564fa02a28b68f8b55d4cdec42e3b9d6"
@@ -2732,6 +2739,11 @@ mixme@^0.3.1:
   resolved "https://registry.yarnpkg.com/mixme/-/mixme-0.3.5.tgz#304652cdaf24a3df0487205e61ac6162c6906ddd"
   integrity sha512-SyV9uPETRig5ZmYev0ANfiGeB+g6N2EnqqEfBbCGmmJ6MgZ3E4qv5aPbnHVdZ60KAHHXV+T3sXopdrnIXQdmjQ==
 
+mkdirp@^1.0.4:
+  version "1.0.4"
+  resolved "https://registry.yarnpkg.com/mkdirp/-/mkdirp-1.0.4.tgz#3eb5ed62622756d79a5f0e2a221dfebad75c2f7e"
+  integrity sha512-vVqVZQyf3WLx2Shd0qJ9xuvqgAyKPLAiqITEtqW0oIUjzo3PePDd6fW9iFz30ef7Ysp/oiWqbhszeGWW2T6Gzw==
+
 moment@^2.18.1:
   version "2.27.0"
   resolved "https://registry.yarnpkg.com/moment/-/moment-2.27.0.tgz#8bff4e3e26a236220dfe3e36de756b6ebaa0105d"