diff --git a/packages/nextjs/src/config/nextConfigToWebpackPluginConfig.ts b/packages/nextjs/src/config/nextConfigToWebpackPluginConfig.ts
index 89b8e00bf94f..f5ef086017d4 100644
--- a/packages/nextjs/src/config/nextConfigToWebpackPluginConfig.ts
+++ b/packages/nextjs/src/config/nextConfigToWebpackPluginConfig.ts
@@ -117,6 +117,7 @@ export function includeDistDir(
       );
       // Keep the same object even if it's incorrect, so that the user can get a more precise error from sentry-cli
       // Casting to `any` for TS not complaining about it being `unknown`
+      // eslint-disable-next-line @typescript-eslint/no-explicit-any
       sourcesToInclude = usersInclude as any;
     }
   }
diff --git a/packages/nextjs/src/config/webpack.ts b/packages/nextjs/src/config/webpack.ts
index 748a98e75d67..27a2e91b8970 100644
--- a/packages/nextjs/src/config/webpack.ts
+++ b/packages/nextjs/src/config/webpack.ts
@@ -4,6 +4,7 @@ import * as SentryWebpackPlugin from '@sentry/webpack-plugin';
 import * as fs from 'fs';
 import * as path from 'path';
 
+import { PROJECT_BASEPATH } from '../index.server';
 import {
   BuildContext,
   EntryPointValue,
@@ -49,6 +50,14 @@ export function constructWebpackConfigFunction(
       newConfig = userNextConfig.webpack(newConfig, buildContext);
     }
 
+    // If a user defines a custom build directory (`distDir`), we must update the `RewriteFrames` integration so that
+    // the paths of the source maps match. This is required to correctly display server stack traces.
+    // `distDir` is always defined in real life: either the user defines a value, or Next.js sets the default `.next`.
+    // The check is for different environments, such as in tests.
+    if (buildContext.isServer && buildContext.config.distDir) {
+      updateRewriteFramesBasepath(buildContext.dir, buildContext.config.distDir as string);
+    }
+
     // Tell webpack to inject user config files (containing the two `Sentry.init()` calls) into the appropriate output
     // bundles. Store a separate reference to the original `entry` value to avoid an infinite loop. (If we don't do
     // this, we'll have a statement of the form `x.y = () => f(x.y)`, where one of the things `f` does is call `x.y`.
@@ -108,6 +117,87 @@ export function constructWebpackConfigFunction(
   return newWebpackFunction;
 }
 
+/**
+ * WARNING: don't modify the contents of this variable.
+ * The variable it refers to must be available in `index.server.ts`, and it gets
+ * overridden at build time. If it isn't, the build may break.
+ */
+export const BASEPATH_VARNAME = 'PROJECT_BASEPATH';
+
+/**
+ * Updates the base path of the server's RewriteFrames integration to match the source
+ * map's paths with the given distribution directory.
+ *
+ * This action is required to view correct stack traces when using a custom
+ * distribution directory. The project root is required to build correct paths of the
+ * files that must be overwritten. This use case arises when you run the build step in
+ * a different directory from the one the project is; for example, in tests.
+ *
+ * Why this approach?
+ * There are two times to define the path: run time and build time. In any case,
+ * Next.js requires the user to set `distDir` in the options to compile the project.
+ * To get this path at run time and the SDK build it, users must also define the
+ * option in the SDK's server's configuration. However, to get the path at build time,
+ * users only need to set it once since the `withSentryConfig` wrapper can read the
+ * user's Next.js configuration. The SDK generates the `RewriteFrames` integration at
+ * initialization, meaning it's impossible to dynamically set the distribution directory
+ * path at build time if the option is only available at run time. To solve this issue,
+ * the SDK at build time rewrites the files where the default path of the integration is,
+ * so it's successfully generated at run time without additional configuration.
+ *
+ * The project root is
+ * @param projectRootDir Root directory of the Next.js project.
+ * @param distDir The distribution directory.
+ */
+function updateRewriteFramesBasepath(projectRootDir: string, distDir: string): void {
+  if (distDir === PROJECT_BASEPATH) return;
+  try {
+    // esm
+    setProjectBasepath(
+      path.join(projectRootDir, 'node_modules', '@sentry', 'nextjs', 'esm', 'index.server.js'),
+      'var ',
+      distDir,
+    );
+    // es5
+    setProjectBasepath(
+      path.join(projectRootDir, 'node_modules', '@sentry', 'nextjs', 'dist', 'index.server.js'),
+      'exports.',
+      distDir,
+    );
+  } catch (error) {
+    // eslint-disable-next-line no-console
+    console.warn(
+      'Sentry Logger [Warn]: ' +
+        `Could not set custom build directory \`${distDir}\`, required for correct display of source maps. `,
+      'In order to set your own `RewriteFrames`, visit\n' +
+        'https://docs.sentry.io/platforms/javascript/guides/nextjs/configuration/integrations/plugin/#rewriteframes\n',
+      error,
+    );
+  }
+}
+
+/**
+ * Overrides the base path variable with the distDir provided.
+ *
+ * Note that only replaces the first regex match.
+ * Different module formats have different variable prefixes and their output files
+ * are located in different paths.
+ *
+ * There's no error handling.
+ *
+ * @param filePath Path to the file.
+ * @param varPrefix Prefix of the variable declaration.
+ * @param distDir The distribution directory.
+ */
+function setProjectBasepath(filePath: string, varPrefix: string, distDir: string): void {
+  const fileContents = fs.readFileSync(filePath).toString();
+  const replacedContents = fileContents.replace(
+    new RegExp(`${varPrefix}${BASEPATH_VARNAME} = .*`),
+    `${varPrefix}${BASEPATH_VARNAME} = '${distDir}';`,
+  );
+  fs.writeFileSync(filePath, replacedContents);
+}
+
 /**
  * Modify the webpack `entry` property so that the code in `sentry.server.config.js` and `sentry.client.config.js` is
  * included in the the necessary bundles.
diff --git a/packages/nextjs/src/index.server.ts b/packages/nextjs/src/index.server.ts
index e8c096b9baf5..1c18f1115537 100644
--- a/packages/nextjs/src/index.server.ts
+++ b/packages/nextjs/src/index.server.ts
@@ -47,11 +47,18 @@ function sdkAlreadyInitialized(): boolean {
   return !!hub.getClient();
 }
 
-const SOURCEMAP_FILENAME_REGEX = /^.*\/\.next\//;
+/**
+ * WARNING: don't refactor this variable.
+ * This variable gets overridden at build time to set the correct path -- what users
+ * defined in the `distDir` option in their Next.js configuration.
+ */
+export const PROJECT_BASEPATH = '.next';
+const projectBasepathRegex = PROJECT_BASEPATH[0] === '.' ? `\\${PROJECT_BASEPATH}` : PROJECT_BASEPATH;
+const sourcemapFilenameRegex = new RegExp(`^.*/${projectBasepathRegex}/`);
 
 const defaultRewriteFramesIntegration = new RewriteFrames({
   iteratee: frame => {
-    frame.filename = frame.filename?.replace(SOURCEMAP_FILENAME_REGEX, 'app:///_next/');
+    frame.filename = frame.filename?.replace(sourcemapFilenameRegex, 'app:///_next/');
     return frame;
   },
 });
diff --git a/packages/nextjs/test/config.test.ts b/packages/nextjs/test/config.test.ts
index 8343a9053cc3..62d6dd286d19 100644
--- a/packages/nextjs/test/config.test.ts
+++ b/packages/nextjs/test/config.test.ts
@@ -14,6 +14,7 @@ import {
   WebpackConfigObject,
 } from '../src/config/types';
 import {
+  BASEPATH_VARNAME,
   constructWebpackConfigFunction,
   getUserConfigFile,
   getWebpackPluginOptions,
@@ -103,7 +104,7 @@ function getBuildContext(
     dev: false,
     buildId: 'sItStAyLiEdOwN',
     dir: '/Users/Maisey/projects/squirrelChasingSimulator',
-    config: { target: 'server', ...userNextConfig },
+    config: { target: 'server', distDir: '.next', ...userNextConfig },
     webpack: { version: webpackVersion },
     isServer: buildTarget === 'server',
   };
@@ -324,6 +325,92 @@ describe('webpack config', () => {
       );
     });
   });
+
+  describe('RewriteFrames on base path change', () => {
+    const testProjectBasepath = path.join(__dirname, 'testDir');
+    const testFilesPath = path.join(testProjectBasepath, 'node_modules', '@sentry', 'nextjs');
+
+    const moduleFormatExample = [
+      {
+        name: 'esm',
+        dir: 'esm',
+        file: 'index.server.js',
+        contents: "var PROJECT_BASEPATH = '.next'",
+      },
+      {
+        name: 'es5',
+        dir: 'dist',
+        file: 'index.server.js',
+        contents: "exports.PROJECT_BASEPATH = '.next'",
+      },
+    ];
+
+    beforeAll(async () => {
+      await fs.promises.mkdir(testFilesPath, { recursive: true });
+      moduleFormatExample.map(format => {
+        format.dir = path.join(testFilesPath, format.dir);
+        format.file = path.join(format.dir, format.file);
+        return fs.promises.mkdir(format.dir);
+      });
+    });
+
+    afterAll(() => rimraf.sync(testProjectBasepath));
+
+    beforeEach(() =>
+      moduleFormatExample.map(
+        // Using promises here make reading the contents of the files to be empty strings
+        format => fs.writeFileSync(format.file, format.contents),
+      ),
+    );
+
+    function addDistDirToBuildContext(buildCtxt: BuildContext, distDir: string): BuildContext {
+      const config = { ...buildCtxt.config, distDir };
+      const res = {
+        ...buildCtxt,
+        config,
+      };
+      return res;
+    }
+
+    test.each([
+      ['client without setting a dir', clientBuildContext, null],
+      ['client setting a normal dir', addDistDirToBuildContext(clientBuildContext, 'test'), null],
+      ['server without setting a dir', serverBuildContext, null],
+      [
+        'server setting normal dir',
+        addDistDirToBuildContext(serverBuildContext, 'test'),
+        {
+          esm: "var PROJECT_BASEPATH = 'test';",
+          es5: "exports.PROJECT_BASEPATH = 'test';",
+        },
+      ],
+      [
+        'server setting hidden dir',
+        addDistDirToBuildContext(serverBuildContext, '.test'),
+        {
+          esm: "var PROJECT_BASEPATH = '.test';",
+          es5: "exports.PROJECT_BASEPATH = '.test';",
+        },
+      ],
+      // `expectedContents === null` => contents shouldn't change
+    ])('%s', async (_testName, buildContext, expectedContents: null | Record<string, string>) => {
+      await materializeFinalWebpackConfig({
+        userNextConfig,
+        incomingWebpackConfig: clientWebpackConfig,
+        incomingWebpackBuildContext: { ...buildContext, dir: testProjectBasepath },
+      });
+      moduleFormatExample.map(format => {
+        const contents = fs.readFileSync(format.file).toString();
+        expect(contents).toStrictEqual(expectedContents ? expectedContents[format.name] : format.contents);
+      });
+    });
+
+    test(`\`${BASEPATH_VARNAME}\` is defined in \`index.server.ts\``, () => {
+      const indexServerPath = path.join(__dirname, '..', 'src', 'index.server.ts');
+      const fileContents = fs.readFileSync(indexServerPath).toString();
+      expect(fileContents).toMatch(new RegExp(`\\Wconst ${BASEPATH_VARNAME} =\\W`));
+    });
+  });
 });
 
 describe('Sentry webpack plugin config', () => {