diff --git a/source/extensions/filters/http/lua/config.cc b/source/extensions/filters/http/lua/config.cc
index dbe71ad944b4..33f58bd13aef 100644
--- a/source/extensions/filters/http/lua/config.cc
+++ b/source/extensions/filters/http/lua/config.cc
@@ -16,6 +16,10 @@ Http::FilterFactoryCb LuaFilterConfig::createFilterFactoryFromProtoTyped(
     Server::Configuration::FactoryContext& context) {
   FilterConfigConstSharedPtr filter_config(new FilterConfig{
       proto_config, context.threadLocal(), context.clusterManager(), context.api()});
+
+  // Setting up a watcher for LUA_PATHs
+  filter_config->addLuaPathWatchers(context);
+
   return [filter_config](Http::FilterChainFactoryCallbacks& callbacks) -> void {
     callbacks.addStreamFilter(std::make_shared<Filter>(filter_config));
   };
diff --git a/source/extensions/filters/http/lua/lua_filter.cc b/source/extensions/filters/http/lua/lua_filter.cc
index 99d9618b13a0..fce9b6fd1bc9 100644
--- a/source/extensions/filters/http/lua/lua_filter.cc
+++ b/source/extensions/filters/http/lua/lua_filter.cc
@@ -626,10 +626,30 @@ int StreamHandleWrapper::luaBase64Escape(lua_State* state) {
   return 1;
 }
 
+void FilterConfig::addLuaPathWatchers(Server::Configuration::FactoryContext& context) {
+  // hardcoding path for the moment
+  std::string path = "/usr/local/share/lua/5.1/lib/";
+  watcher_ = context.dispatcher().createFilesystemWatcher();
+  watcher_->addWatch(path,
+      Filesystem::Watcher::Events::MovedTo |
+      Filesystem::Watcher::Events::Modified,
+      [path, &context, this](uint32_t) {
+        ENVOY_LOG(debug, "LUA path: {} is updated. Updating PerLuaCodeSetup", path);
+        if (per_lua_code_setups_map_[GLOBAL_SCRIPT_NAME]) {
+          auto global_setup_ptr = std::make_unique<PerLuaCodeSetup>(
+              proto_config_.inline_code(), context.threadLocal());
+          if (global_setup_ptr) {
+            per_lua_code_setups_map_[GLOBAL_SCRIPT_NAME].reset();
+            per_lua_code_setups_map_[GLOBAL_SCRIPT_NAME] = std::move(global_setup_ptr);
+          }
+        }
+  });
+}
+
 FilterConfig::FilterConfig(const envoy::extensions::filters::http::lua::v3::Lua& proto_config,
                            ThreadLocal::SlotAllocator& tls,
                            Upstream::ClusterManager& cluster_manager, Api::Api& api)
-    : cluster_manager_(cluster_manager) {
+    : cluster_manager_(cluster_manager), proto_config_(proto_config) {
   auto global_setup_ptr = std::make_unique<PerLuaCodeSetup>(proto_config.inline_code(), tls);
   if (global_setup_ptr) {
     per_lua_code_setups_map_[GLOBAL_SCRIPT_NAME] = std::move(global_setup_ptr);
diff --git a/source/extensions/filters/http/lua/lua_filter.h b/source/extensions/filters/http/lua/lua_filter.h
index 95c42c066be6..2637a8aa0e27 100644
--- a/source/extensions/filters/http/lua/lua_filter.h
+++ b/source/extensions/filters/http/lua/lua_filter.h
@@ -352,8 +352,13 @@ class FilterConfig : Logger::Loggable<Logger::Id::lua> {
 
   Upstream::ClusterManager& cluster_manager_;
 
+  // Adds filesystem watchers for LUA paths such as /usr/local/share/lua/5.1/
+  void addLuaPathWatchers(Server::Configuration::FactoryContext& context);
+
 private:
   absl::flat_hash_map<std::string, PerLuaCodeSetupPtr> per_lua_code_setups_map_;
+  std::unique_ptr<Filesystem::Watcher> watcher_;
+  const envoy::extensions::filters::http::lua::v3::Lua proto_config_;
 };
 
 using FilterConfigConstSharedPtr = std::shared_ptr<FilterConfig>;