diff --git a/pkgs/by-name/li/lightning-terminal/package.nix b/pkgs/by-name/li/lightning-terminal/package.nix
index bb987952bc06..f656f0670ead 100644
--- a/pkgs/by-name/li/lightning-terminal/package.nix
+++ b/pkgs/by-name/li/lightning-terminal/package.nix
@@ -1,11 +1,18 @@
 {
   lib,
+  stdenv,
   buildGoModule,
   fetchFromGitHub,
-  mkYarnPackage,
+  nodejs,
+  yarn,
+  yarnConfigHook,
+  yarnBuildHook,
   fetchYarnDeps,
   go,
   versionCheckHook,
+  testers,
+  curl,
+  lightning-terminal,
 }:
 
 buildGoModule rec {
@@ -30,6 +37,18 @@ buildGoModule rec {
 
   vendorHash = "sha256-Gbx4uz6q9Ef4QNv6DpIoCACjhT66iZ7GPNpd/g9MgKQ=";
 
+  buildInputs = [ lightning-app ];
+  postUnpack = ''
+    echo "Copying app build output into app/build dir to embed into litd."
+    cp -r ${lightning-app}/* source/app/build/
+
+    echo "Asserting that app/build/index.html exists."
+    if [ ! -f source/app/build/index.html ]; then
+      echo "ERROR: app/build/index.html not found!"
+      exit 1
+    fi
+  '';
+
   ldflags = [
     "-s"
     "-w"
@@ -75,24 +94,59 @@ buildGoModule rec {
     versionCheckHook
   ];
 
-  lightning-app = mkYarnPackage {
+  passthru.tests.litd-app = testers.runCommand {
+    name = "test-litd-app";
+    nativeBuildInputs = [
+      curl
+      lightning-terminal
+    ];
+    script = ''
+      litd \
+        --uipassword=12345678 \
+        --insecure-httplisten=127.0.0.1:8080 \
+        --httpslisten= &
+      sleep 2
+      GETindexHTTPCode=$(curl -o /dev/null -w "%{http_code}" -Lvs 127.0.0.1:8080/index.html)
+      if [ "$GETindexHTTPCode" = 200 ]; then
+        touch $out
+      fi
+    '';
+  };
+
+  lightning-app = stdenv.mkDerivation {
     pname = "lightning-app";
     src = "${src}/app";
     version = "0.0.1";
-    packageJSON = "${src}/app/package.json";
-    yarnLock = "${src}/app/yarn.lock";
-    offlineCache = fetchYarnDeps {
+    yarnOfflineCache = fetchYarnDeps {
       yarnLock = "${src}/app/yarn.lock";
       hash = "sha256-ulOgKQRLG4cRi1N1DajmbZ0L7d08g5cYDA9itXu+Esw=";
     };
+
+    # Remove this command from package.json. It requires Git and it is not
+    # really needed.
+    postPatch = ''
+      substituteInPlace package.json \
+        --replace '"postbuild": "git restore build/.gitkeep",' ' '
+    '';
+
+    nativeBuildInputs = [
+      nodejs
+      yarn
+      yarnConfigHook
+      yarnBuildHook
+    ];
+
+    preBuild = ''
+      # Disable linter. It finds a lot of proposed substitutions and fails.
+      export DISABLE_ESLINT_PLUGIN=true
+      export CI=false
+    '';
+
+    installPhase = ''
+      mkdir -p $out
+      cp -r build/* $out/
+    '';
   };
-  outputs = [
-    "out"
-    "app"
-  ];
-  postFixup = ''
-    ln -s ${lightning-app} "$app"
-  '';
 
   meta = {
     description = "All-in-one Lightning node management tool that includes LND, Loop, Pool, Faraday, and Tapd";
@@ -101,6 +155,5 @@ buildGoModule rec {
     changelog = "https://github.com/lightninglabs/lightning-terminal/releases/tag/v${version}";
     maintainers = with lib.maintainers; [ HannahMR ];
     mainProgram = "litcli";
-    outputsToInstall = [ "out" ];
   };
 }