diff --git a/docs/config/README.md b/docs/config/README.md
index f0a7d08372..d05f06d447 100644
--- a/docs/config/README.md
+++ b/docs/config/README.md
@@ -247,10 +247,20 @@ See [the plugin's README](https://github.com/vuejs/vue-cli/blob/dev/packages/%40
 
 ### css.modules
 
+Deprecated since v4, please use [`css.requireModuleExtension`](#css-requireModuleExtension) instead.
+
+In v3 this means the opposite of `css.requireModuleExtension`.
+
+### css.requireModuleExtension
+
 - Type: `boolean`
-- Default: `false`
+- Default: `true`
+
+  By default, only files that ends in `*.module.[ext]` are treated as CSS modules. Setting this to `false` will allow you to drop `.module` in the filenames and treat all `*.(css|scss|sass|less|styl(us)?)` files as CSS modules.
 
-  By default, only files that ends in `*.module.[ext]` are treated as CSS modules. Setting this to `true` will allow you to drop `.module` in the filenames and treat all `*.(css|scss|sass|less|styl(us)?)` files as CSS modules.
+  ::: tip
+  If you have customized CSS Modules configurations in `css.loaderOptions.css`, then the `css.requireModuleExtension` field must be explictly configured to `true` or `false`, otherwise we can't be sure whether you want to apply these options to all CSS files or not.
+  :::
 
   See also: [Working with CSS > CSS Modules](../guide/css.md#css-modules)
 
diff --git a/docs/guide/css.md b/docs/guide/css.md
index 83cf75e1d7..75bfb199dd 100644
--- a/docs/guide/css.md
+++ b/docs/guide/css.md
@@ -89,13 +89,13 @@ import styles from './foo.module.css'
 import sassStyles from './foo.module.scss'
 ```
 
-If you want to drop the `.module` in the filenames, set `css.modules` to `true` in `vue.config.js`:
+If you want to drop the `.module` in the filenames, set `css.requireModuleExtension` to `false` in `vue.config.js`:
 
 ``` js
 // vue.config.js
 module.exports = {
   css: {
-    modules: true
+    requireModuleExtension: false
   }
 }
 ```
diff --git a/docs/zh/config/README.md b/docs/zh/config/README.md
index 539df1a814..94d131fa26 100644
--- a/docs/zh/config/README.md
+++ b/docs/zh/config/README.md
@@ -235,10 +235,19 @@ module.exports = {
 
 ### css.modules
 
+从 v4 起已弃用，请使用[`css.requireModuleExtension`](#css-requireModuleExtension)。
+在 v3 中，这个选项含义与 `css.requireModuleExtension` 相反。
+
+### css.requireModuleExtension
+
 - Type: `boolean`
-- Default: `false`
+- Default: `true`
 
-  默认情况下，只有 `*.module.[ext]` 结尾的文件才会被视作 CSS Modules 模块。设置为 `true` 后你就可以去掉文件名中的 `.module` 并将所有的 `*.(css|scss|sass|less|styl(us)?)` 文件视为 CSS Modules 模块。
+  默认情况下，只有 `*.module.[ext]` 结尾的文件才会被视作 CSS Modules 模块。设置为 `false` 后你就可以去掉文件名中的 `.module` 并将所有的 `*.(css|scss|sass|less|styl(us)?)` 文件视为 CSS Modules 模块。
+
+  ::: tip 提示
+  如果你在 `css.loaderOptions.css` 里配置了自定义的 CSS Module 选项，则 `css.requireModuleExtension` 必须被显式地指定为 `true` 或者 `false`，否则我们无法确定你是否希望将这些自定义配置应用到所有 CSS 文件中。
+  :::
 
   更多细节可查阅：[配合 CSS > CSS Modules](../guide/css.md#css-modules)
 
diff --git a/docs/zh/guide/css.md b/docs/zh/guide/css.md
index aa8d562677..2758e6c0bc 100644
--- a/docs/zh/guide/css.md
+++ b/docs/zh/guide/css.md
@@ -81,13 +81,13 @@ import styles from './foo.module.css'
 import sassStyles from './foo.module.scss'
 ```
 
-如果你想去掉文件名中的 `.module`，可以设置 `vue.config.js` 中的 `css.modules` 为 `true`：
+如果你想去掉文件名中的 `.module`，可以设置 `vue.config.js` 中的 `css.requireModuleExtension` 为 `false`：
 
 ``` js
 // vue.config.js
 module.exports = {
   css: {
-    modules: true
+    requireModuleExtension: false
   }
 }
 ```
diff --git a/packages/@vue/cli-service/__tests__/css.spec.js b/packages/@vue/cli-service/__tests__/css.spec.js
index e087586511..7d6d6a6e36 100644
--- a/packages/@vue/cli-service/__tests__/css.spec.js
+++ b/packages/@vue/cli-service/__tests__/css.spec.js
@@ -1,5 +1,10 @@
+const { logs } = require('@vue/cli-shared-utils')
 const Service = require('../lib/Service')
 
+beforeEach(() => {
+  logs.warn = []
+})
+
 const LANGS = ['css', 'sass', 'scss', 'less', 'styl', 'stylus']
 const extractLoaderPath = require('mini-css-extract-plugin').loader
 
@@ -82,7 +87,7 @@ test('CSS Modules rules', () => {
   const config = genConfig({
     vue: {
       css: {
-        modules: true
+        requireModuleExtension: false
       }
     }
   })
@@ -103,6 +108,116 @@ test('CSS Modules rules', () => {
   })
 })
 
+test('Customized CSS Modules rules', () => {
+  const userOptions = {
+    vue: {
+      css: {
+        loaderOptions: {
+          css: {
+            modules: {
+              localIdentName: '[folder]-[name]-[local][emoji]'
+            }
+          }
+        }
+      }
+    }
+  }
+
+  expect(() => {
+    genConfig(userOptions)
+  }).toThrow('`css.requireModuleExtension` is required when custom css modules options provided')
+
+  userOptions.vue.css.requireModuleExtension = true
+  const config = genConfig(userOptions)
+
+  LANGS.forEach(lang => {
+    const expected = {
+      importLoaders: 1, // no postcss-loader
+      sourceMap: false,
+      modules: {
+        localIdentName: `[folder]-[name]-[local][emoji]`
+      }
+    }
+    // vue-modules rules
+    expect(findOptions(config, lang, 'css', 0)).toEqual(expected)
+    // normal-modules rules
+    expect(findOptions(config, lang, 'css', 2)).toEqual(expected)
+    // normal rules
+    expect(findOptions(config, lang, 'css', 3)).not.toEqual(expected)
+  })
+})
+
+test('deprecate `css.modules` option', () => {
+  const config = genConfig({
+    vue: {
+      css: {
+        modules: true,
+        loaderOptions: {
+          css: {
+            modules: {
+              localIdentName: '[folder]-[name]-[local][emoji]'
+            }
+          }
+        }
+      }
+    }
+  })
+  expect(logs.warn.some(([msg]) => msg.match('please use "css.requireModuleExtension" instead'))).toBe(true)
+
+  LANGS.forEach(lang => {
+    const expected = {
+      importLoaders: 1, // no postcss-loader
+      sourceMap: false,
+      modules: {
+        localIdentName: `[folder]-[name]-[local][emoji]`
+      }
+    }
+    // vue-modules rules
+    expect(findOptions(config, lang, 'css', 0)).toEqual(expected)
+    // normal-modules rules
+    expect(findOptions(config, lang, 'css', 2)).toEqual(expected)
+    // normal rules
+    expect(findOptions(config, lang, 'css', 3)).toEqual(expected)
+  })
+})
+
+test('favor `css.requireModuleExtension` over `css.modules`', () => {
+  const config = genConfig({
+    vue: {
+      css: {
+        requireModuleExtension: false,
+        modules: false,
+
+        loaderOptions: {
+          css: {
+            modules: {
+              localIdentName: '[folder]-[name]-[local][emoji]'
+            }
+          }
+        }
+      }
+    }
+  })
+
+  expect(logs.warn.some(([msg]) => msg.match('"css.modules" will be ignored in favor of "css.requireModuleExtension"'))).toBe(true)
+
+  LANGS.forEach(lang => {
+    const expected = {
+      importLoaders: 1, // no postcss-loader
+      sourceMap: false,
+      modules: {
+        localIdentName: `[folder]-[name]-[local][emoji]`
+      }
+    }
+    // vue-modules rules
+    expect(findOptions(config, lang, 'css', 0)).toEqual(expected)
+    // normal-modules rules
+    expect(findOptions(config, lang, 'css', 2)).toEqual(expected)
+    // normal rules
+    expect(findOptions(config, lang, 'css', 3)).toEqual(expected)
+  })
+})
+
 test('css.extract', () => {
   const config = genConfig({
     vue: {
diff --git a/packages/@vue/cli-service/lib/Service.js b/packages/@vue/cli-service/lib/Service.js
index 84c9af1a13..e42d12ef0f 100644
--- a/packages/@vue/cli-service/lib/Service.js
+++ b/packages/@vue/cli-service/lib/Service.js
@@ -346,6 +346,22 @@ module.exports = class Service {
       resolvedFrom = 'inline options'
     }
 
+
+    if (resolved.css && typeof resolved.css.modules !== 'undefined') {
+      if (typeof resolved.css.requireModuleExtension !== 'undefined') {
+        warn(
+          `You have set both "css.modules" and "css.requireModuleExtension" in ${chalk.bold('vue.config.js')}, ` +
+          `"css.modules" will be ignored in favor of "css.requireModuleExtension".`
+        )
+      } else {
+        warn(
+          `"css.modules" option in ${chalk.bold('vue.config.js')} ` +
+          `is deprecated now, please use "css.requireModuleExtension" instead.`
+        )
+        resolved.css.requireModuleExtension = !resolved.css.modules
+      }
+    }
+
     // normalize some options
     ensureSlash(resolved, 'publicPath')
     if (typeof resolved.publicPath === 'string') {
diff --git a/packages/@vue/cli-service/lib/config/css.js b/packages/@vue/cli-service/lib/config/css.js
index df55ce82f1..2133924be4 100644
--- a/packages/@vue/cli-service/lib/config/css.js
+++ b/packages/@vue/cli-service/lib/config/css.js
@@ -27,6 +27,14 @@ module.exports = (api, rootOptions) => {
       loaderOptions = {}
     } = rootOptions.css || {}
 
+    let { requireModuleExtension } = rootOptions.css || {}
+    if (typeof requireModuleExtension === 'undefined') {
+      if (loaderOptions.css && loaderOptions.css.modules) {
+        throw new Error('`css.requireModuleExtension` is required when custom css modules options provided')
+      }
+      requireModuleExtension = true
+    }
+
     const shouldExtract = extract !== false && !shadowMode
     const filename = getAssetPath(
       rootOptions,
@@ -91,8 +99,7 @@ module.exports = (api, rootOptions) => {
 
       // rules for normal CSS imports
       const normalRule = baseRule.oneOf('normal')
-      const treatAllAsModules = !!(rootOptions.css && rootOptions.css.modules)
-      applyLoaders(normalRule, treatAllAsModules)
+      applyLoaders(normalRule, !requireModuleExtension)
 
       function applyLoaders (rule, isCssModule) {
         if (shouldExtract) {
@@ -127,6 +134,8 @@ module.exports = (api, rootOptions) => {
             localIdentName: '[name]_[local]_[hash:base64:5]',
             ...cssLoaderOptions.modules
           }
+        } else {
+          delete cssLoaderOptions.modules
         }
 
         rule
diff --git a/packages/@vue/cli-service/lib/options.js b/packages/@vue/cli-service/lib/options.js
index 4e12520d5f..fad7a32341 100644
--- a/packages/@vue/cli-service/lib/options.js
+++ b/packages/@vue/cli-service/lib/options.js
@@ -33,7 +33,9 @@ const schema = createSchema(joi => joi.object({
 
   // css
   css: joi.object({
+    // TODO: deprecate this after joi 16 release
     modules: joi.boolean(),
+    requireModuleExtension: joi.boolean(),
     extract: joi.alternatives().try(joi.boolean(), joi.object()),
     sourceMap: joi.boolean(),
     loaderOptions: joi.object({