diff --git a/Library/Homebrew/language/node.rb b/Library/Homebrew/language/node.rb
index 01d41041be..eaadc54fc7 100644
--- a/Library/Homebrew/language/node.rb
+++ b/Library/Homebrew/language/node.rb
@@ -1,7 +1,7 @@
 module Language
   module Node
     def self.npm_cache_config
-      "cache=#{HOMEBREW_CACHE}/npm_cache\n"
+      "cache=#{HOMEBREW_CACHE}/npm_cache"
     end
 
     def self.pack_for_installation
@@ -10,19 +10,18 @@ module Language
       # fed to `npm install` only symlinks are created linking back to that
       # directory, consequently breaking that assumption. We require a tarball
       # because npm install creates a "real" installation when fed a tarball.
-      output = Utils.popen_read("npm pack").chomp
-      raise "npm failed to pack #{Dir.pwd}" unless $CHILD_STATUS.exitstatus.zero?
-      output
+      pack_cmd = "npm pack --ignore-scripts"
+      output = Utils.popen_read(pack_cmd)
+      if !$CHILD_STATUS.exitstatus.zero? || output.lines.empty?
+        raise "npm failed to pack #{Dir.pwd}"
+      end
+      output.lines.last.chomp
     end
 
     def self.setup_npm_environment
-      npmrc = Pathname.new("#{ENV["HOME"]}/.npmrc")
-      # only run setup_npm_environment once per formula
-      return if npmrc.exist?
-      # explicitly set npm's cache path to HOMEBREW_CACHE/npm_cache to fix
-      # issues caused by overriding $HOME (long build times, high disk usage)
-      # https://github.com/Homebrew/brew/pull/37#issuecomment-208840366
-      npmrc.write npm_cache_config
+      # guard that this is only run once
+      return if @env_set
+      @env_set = true
       # explicitly use our npm and node-gyp executables instead of the user
       # managed ones in HOMEBREW_PREFIX/lib/node_modules which might be broken
       begin
@@ -42,8 +41,10 @@ module Language
 
       # npm install args for global style module format installed into libexec
       %W[
-        --verbose
+        -ddd
         --global
+        --build-from-source
+        --#{npm_cache_config}
         --prefix=#{libexec}
         #{Dir.pwd}/#{pack}
       ]
@@ -52,7 +53,11 @@ module Language
     def self.local_npm_install_args
       setup_npm_environment
       # npm install args for local style module format
-      ["--verbose"]
+      %W[
+        -ddd
+        --build-from-source
+        --#{npm_cache_config}
+      ]
     end
   end
 end
diff --git a/Library/Homebrew/test/language/node_spec.rb b/Library/Homebrew/test/language/node_spec.rb
index b2114bc4fd..5ddbde9446 100644
--- a/Library/Homebrew/test/language/node_spec.rb
+++ b/Library/Homebrew/test/language/node_spec.rb
@@ -2,45 +2,56 @@ require "language/node"
 
 describe Language::Node do
   describe "#setup_npm_environment" do
-    it "does nothing when npmrc exists" do
-      expect(subject.setup_npm_environment).to be_nil
-    end
-
-    it "calls prepend_path when node formula exists and npmrc does not exist" do
+    it "calls prepend_path when node formula exists only during the first call" do
       node = formula "node" do
         url "node-test"
       end
       stub_formula_loader(node)
-      allow_any_instance_of(Pathname).to receive(:exist?).and_return(false)
       expect(ENV).to receive(:prepend_path)
-      subject.setup_npm_environment
+      subject.instance_variable_set(:@env_set, false)
+      expect(subject.setup_npm_environment).to be_nil
+
+      expect(subject.instance_variable_get(:@env_set)).to eq(true)
+      expect(ENV).not_to receive(:prepend_path)
+      expect(subject.setup_npm_environment).to be_nil
     end
 
-    it "does not call prepend_path when node formula does not exist but npmrc exists" do
-      allow_any_instance_of(Pathname).to receive(:exist?).and_return(false)
+    it "does not call prepend_path when node formula does not exist" do
       expect(subject.setup_npm_environment).to be_nil
     end
   end
 
   describe "#std_npm_install_args" do
     npm_install_arg = "libexec"
+    npm_pack_cmd = "npm pack --ignore-scripts"
 
     it "raises error with non zero exitstatus" do
+      allow(Utils).to receive(:popen_read).with(npm_pack_cmd).and_return("error msg")
+      allow_any_instance_of(Process::Status).to receive(:exitstatus).and_return(42)
+      allow_any_instance_of(nil::NilClass).to receive(:exitstatus).and_return(42)
+      expect { subject.std_npm_install_args(npm_install_arg) }.to \
+        raise_error("npm failed to pack #{Dir.pwd}")
+    end
+
+    it "raises error with empty npm pack output" do
+      allow(Utils).to receive(:popen_read).with(npm_pack_cmd).and_return("")
+      allow_any_instance_of(Process::Status).to receive(:exitstatus).and_return(0)
+      allow_any_instance_of(nil::NilClass).to receive(:exitstatus).and_return(0)
       expect { subject.std_npm_install_args(npm_install_arg) }.to \
         raise_error("npm failed to pack #{Dir.pwd}")
     end
 
     it "does not raise error with a zero exitstatus" do
-      allow(Utils).to receive(:popen_read).with("npm pack").and_return("pack")
+      allow(Utils).to receive(:popen_read).with(npm_pack_cmd).and_return("pack.tgz")
       allow_any_instance_of(Process::Status).to receive(:exitstatus).and_return(0)
       allow_any_instance_of(nil::NilClass).to receive(:exitstatus).and_return(0)
       resp = subject.std_npm_install_args(npm_install_arg)
-      expect(resp).to include("--prefix=#{npm_install_arg}", "#{Dir.pwd}/pack")
+      expect(resp).to include("--prefix=#{npm_install_arg}", "#{Dir.pwd}/pack.tgz")
     end
   end
 
   specify "#local_npm_install_args" do
     resp = subject.local_npm_install_args
-    expect(resp).to include("--verbose")
+    expect(resp).to include("-ddd", "--build-from-source", "--cache=#{HOMEBREW_CACHE}/npm_cache")
   end
 end
diff --git a/docs/Node-for-Formula-Authors.md b/docs/Node-for-Formula-Authors.md
index b740367537..a3d0624f2d 100644
--- a/docs/Node-for-Formula-Authors.md
+++ b/docs/Node-for-Formula-Authors.md
@@ -30,7 +30,7 @@ Node modules which are compatible with the latest Node version should declare a
 depends_on "node"
 ```
 
-If your formula requires being executed with an older Node version you must vendor this older Node version as done in the [`kibana` formula](https://github.com/Homebrew/homebrew-core/blob/c6202f91a129e2f994d904f299a308cc6fbd58e5/Formula/kibana.rb).
+If your formula requires being executed with an older Node version you should use one of the versioned node formulae (e.g. `node@6`).
 
 ### Special requirements for native addons
 
@@ -47,8 +47,8 @@ Also note that such a formula would only be compatible with the same Node major
 Node modules should be installed to `libexec`. This prevents the Node modules from contaminating the global `node_modules`, which is important so that npm doesn't try to manage Homebrew-installed Node modules.
 
 In the following we distinguish between two types of Node modules using formulae:
-* formulae for standard Node modules compatible with npm's global module format which should use [`std_npm_install_args`](#installing-global-style-modules-with-std_npm_install_args-to-libexec) (like [`azure-cli`](https://github.com/Homebrew/homebrew-core/blob/d93fe9ba3bcc9071b699c8da4e7d733518d3337e/Formula/azure-cli.rb) or [`autocode`](https://github.com/Homebrew/homebrew-core/blob/1a670a6269e1e07f86683c2d164977c9bd8a3fb6/Formula/autocode.rb)) and
-* formulae where the `npm install` step is only one of multiple not exclusively Node related install steps (not compatible with npm's global module format) which have to use [`local_npm_install_args`](#installing-module-dependencies-locally-with-local_npm_install_args) (like [`elixirscript`](https://github.com/Homebrew/homebrew-core/blob/ec1e40d37e81af63122a354f0101c377f6a4e66d/Formula/elixirscript.rb) or [`kibana`](https://github.com/Homebrew/homebrew-core/blob/c6202f91a129e2f994d904f299a308cc6fbd58e5/Formula/kibana.rb))
+* formulae for standard Node modules compatible with npm's global module format which should use [`std_npm_install_args`](#installing-global-style-modules-with-std_npm_install_args-to-libexec) (like [`azure-cli`](https://github.com/Homebrew/homebrew-core/blob/0f3b27d252b8112c744e0460d871cfe1def6b993/Formula/azure-cli.rb) or [`webpack`](https://github.com/Homebrew/homebrew-core/blob/6282879973d569962e63da7c81ac4623e1a8336b/Formula/webpack.rb)) and
+* formulae where the `npm install` call is not the only required install step (e.g. need to compile non-JavaScript sources too) have to use [`local_npm_install_args`](#installing-module-dependencies-locally-with-local_npm_install_args) (like [`elixirscript`](https://github.com/Homebrew/homebrew-core/blob/4bb491b7b246830aed57b97348a17e9401374978/Formula/elixirscript.rb)
 
 Both methods have in common that they are setting the correct environment for using npm inside Homebrew and are returning the arguments for invoking `npm install` for their specific use cases. This includes fixing an important edge case with the npm cache (caused by Homebrew's redirection of `HOME` during the build and test process) by using our own custom `npm_cache` inside `HOMEBREW_CACHE`, which would otherwise result in very long build times and high disk space usage.
 
@@ -72,6 +72,8 @@ This will install your Node module in npm's global module style with a custom pr
 bin.install_symlink Dir["#{libexec}/bin/*"]
 ```
 
+**Note:** Because of a required workaround for `npm@5` calling `npm pack` we currently don't support installing modules (from non-npm registry tarballs), which require a prepublish step (e.g. for transpiling sources). See [Homebrew/brew#2820](https://github.com/Homebrew/brew/pull/2820) for more information.
+
 ### Installing module dependencies locally with `local_npm_install_args`
 
 In your formula's `install` method, do any installation steps which need to be done before the `npm install` step and then `cd` to the top level of the included Node module. Then, use `system` with `Language::Node.local_npm_install_args` to invoke `npm install` like: