diff --git a/README.md b/README.md
index 458f005..5348d58 100644
--- a/README.md
+++ b/README.md
@@ -68,6 +68,21 @@ module.exports = [
   - `node` builds to `dist/node/`
 - Supports merging in arbitrary configuration with `merge({...})`
 
+### Asset Modules
+
+This configuration makes webpack 5's [Asset Modules](https://webpack.js.org/guides/asset-modules/) available through
+resource queries parameters:
+
+```js
+import myImage from './my-image.png?asset'; // Use `asset` (let webpack decide)
+import myImage from './my-image.png?resource'; // Use `asset/resource`, similar to `file-loader`
+import myImage from './my-image.png?inline'; // Use `asset/inline`, similar to `url-loader`
+import myImage from './my-image.png?source'; // Use `asset/source`, similar to `raw-loader`
+```
+
+You can also use `file` for `asset/resource`, `url` for `asset/inline`, and `raw` for `asset/source`, to make it clear
+which loader you're replacing.
+
 ## API
 
 ### `new ScratchWebpackConfigBuilder(options)`
diff --git a/src/index.cjs b/src/index.cjs
index f06660f..cf5add4 100644
--- a/src/index.cjs
+++ b/src/index.cjs
@@ -87,18 +87,45 @@ class ScratchWebpackConfigBuilder {
                 ]
             },
             module: {
-                rules: [{
-                    test: enableReact ? /\.[cm]?jsx?$/ : /\.[cm]?js$/,
-                    loader: 'babel-loader',
-                    options: {
-                        presets: [
-                            '@babel/preset-env',
-                            ...(
-                                enableReact ? ['@babel/preset-react'] : []
-                            )
-                        ]
+                rules: [
+                    {
+                        test: enableReact ? /\.[cm]?jsx?$/ : /\.[cm]?js$/,
+                        loader: 'babel-loader',
+                        options: {
+                            presets: [
+                                '@babel/preset-env',
+                                ...(
+                                    enableReact ? ['@babel/preset-react'] : []
+                                )
+                            ]
+                        }
+                    },
+                    {
+                        // `asset` automatically chooses between exporting a data URI and emitting a separate file.
+                        // Previously achievable by using `url-loader` with asset size limit.
+                        resourceQuery: /^\?asset$/,
+                        type: 'asset'
+                    },
+                    {
+                        // `asset/resource` emits a separate file and exports the URL.
+                        // Previously achievable by using `file-loader`.
+                        resourceQuery: /^\?(resource|file)$/,
+                        type: 'asset/resource'
+                    },
+                    {
+                        // `asset/inline` exports a data URI of the asset.
+                        // Previously achievable by using `url-loader`.
+                        resourceQuery: /^\?(inline|url)$/,
+                        type: 'asset/inline'
+                    },
+                    {
+                        // `asset/source` exports the source code of the asset.
+                        // Previously achievable by using `raw-loader`.
+                        resourceQuery: /^\?(source|raw)$/,
+                        type: 'asset/source'
                     }
-                }]
+                ],
+
             },
             plugins: []
         };