diff --git a/packages/schematics/src/collection/application/application.spec.ts b/packages/schematics/src/collection/application/application.spec.ts
index 45b162dc45..155f3bdf38 100644
--- a/packages/schematics/src/collection/application/application.spec.ts
+++ b/packages/schematics/src/collection/application/application.spec.ts
@@ -240,4 +240,31 @@ describe('app', () => {
       ).toContain('imports: [RouterTestingModule]');
     });
   });
+
+  describe('template generation mode', () => {
+    it('should create Nx specific `app.component.html` template', () => {
+      const tree = schematicRunner.runSchematic(
+        'app',
+        { name: 'myApp', directory: 'myDir' },
+        appTree
+      );
+      expect(
+        getFileContent(tree, 'apps/my-dir/my-app/src/app/app.component.html')
+      ).toBeTruthy();
+      expect(
+        getFileContent(tree, 'apps/my-dir/my-app/src/app/app.component.html')
+      ).toContain('This is an Angular CLI app built with Nrwl Nx!');
+    });
+
+    it("should update `template`'s property of AppComponent with Nx content", () => {
+      const tree = schematicRunner.runSchematic(
+        'app',
+        { name: 'myApp', directory: 'myDir', inlineTemplate: true },
+        appTree
+      );
+      expect(
+        getFileContent(tree, 'apps/my-dir/my-app/src/app/app.component.ts')
+      ).toContain('This is an Angular CLI app built with Nrwl Nx!');
+    });
+  });
 });
diff --git a/packages/schematics/src/collection/application/index.ts b/packages/schematics/src/collection/application/index.ts
index 7be9f2baeb..7b89bd0b5f 100644
--- a/packages/schematics/src/collection/application/index.ts
+++ b/packages/schematics/src/collection/application/index.ts
@@ -13,7 +13,9 @@ import { insertImport } from '@schematics/angular/utility/ast-utils';
 import {
   addImportToModule,
   addImportToTestBed,
+  getDecoratorPropertyValueNode,
   insert,
+  replaceNodeValue,
   updateJsonInTree
 } from '../../utils/ast-utils';
 import { toFileName } from '../../utils/name-utils';
@@ -117,9 +119,27 @@ Nx is designed to help you create and build enterprise grade Angular application
     const content = options.routing
       ? `${baseContent}\n<router-outlet></router-outlet>`
       : baseContent;
-    host.overwrite(
-      `${options.appProjectRoot}/src/app/app.component.html`,
-      content
+
+    if (!options.inlineTemplate) {
+      return host.overwrite(
+        `${options.appProjectRoot}/src/app/app.component.html`,
+        content
+      );
+    }
+
+    const modulePath = `${options.appProjectRoot}/src/app/app.component.ts`;
+    const templateNodeValue = getDecoratorPropertyValueNode(
+      host,
+      modulePath,
+      'Component',
+      'template',
+      '@angular/core'
+    );
+    replaceNodeValue(
+      host,
+      modulePath,
+      templateNodeValue,
+      `\`\n${baseContent}\n\`,\n`
     );
   };
 }
diff --git a/packages/schematics/src/utils/ast-utils.ts b/packages/schematics/src/utils/ast-utils.ts
index 8da3b178cb..ba95826b9d 100755
--- a/packages/schematics/src/utils/ast-utils.ts
+++ b/packages/schematics/src/utils/ast-utils.ts
@@ -238,7 +238,12 @@ export function removeFromNgModule(
   }
 
   // Get all the children property assignment of object literals.
-  const matchingProperty = getMatchingProperty(source, property);
+  const matchingProperty = getMatchingProperty(
+    source,
+    property,
+    'NgModule',
+    '@angular/core'
+  );
   if (matchingProperty) {
     return [
       new RemoveChange(
@@ -343,7 +348,12 @@ export function getBootstrapComponent(
   source: ts.SourceFile,
   moduleClassName: string
 ): string {
-  const bootstrap = getMatchingProperty(source, 'bootstrap');
+  const bootstrap = getMatchingProperty(
+    source,
+    'bootstrap',
+    'NgModule',
+    '@angular/core'
+  );
   if (!bootstrap) {
     throw new Error(`Cannot find bootstrap components in '${moduleClassName}'`);
   }
@@ -383,9 +393,11 @@ function getMatchingObjectLiteralElement(
 
 function getMatchingProperty(
   source: ts.SourceFile,
-  property: string
+  property: string,
+  identifier: string,
+  module: string
 ): ts.ObjectLiteralElement {
-  const nodes = getDecoratorMetadata(source, 'NgModule', '@angular/core');
+  const nodes = getDecoratorMetadata(source, identifier, module);
   let node: any = nodes[0]; // tslint:disable-line:no-any
 
   if (!node) return null;
@@ -424,7 +436,12 @@ export function addIncludeToTsConfig(
 }
 
 function getListOfRoutes(source: ts.SourceFile): ts.NodeArray<ts.Expression> {
-  const imports: any = getMatchingProperty(source, 'imports');
+  const imports: any = getMatchingProperty(
+    source,
+    'imports',
+    'NgModule',
+    '@angular/core'
+  );
 
   if (imports.initializer.kind === ts.SyntaxKind.ArrayLiteralExpression) {
     const a = imports.initializer as ts.ArrayLiteralExpression;
@@ -888,3 +905,38 @@ export function insertImport(
     ts.SyntaxKind.StringLiteral
   );
 }
+
+export function getDecoratorPropertyValueNode(
+  host: Tree,
+  modulePath: string,
+  identifier: string,
+  property: string,
+  module: string
+) {
+  const moduleSourceText = host.read(modulePath)!.toString('utf-8');
+  const moduleSource = ts.createSourceFile(
+    modulePath,
+    moduleSourceText,
+    ts.ScriptTarget.Latest,
+    true
+  );
+  const templateNode = getMatchingProperty(
+    moduleSource,
+    property,
+    identifier,
+    module
+  );
+
+  return templateNode.getChildAt(templateNode.getChildCount() - 1);
+}
+
+export function replaceNodeValue(
+  host: Tree,
+  modulePath: string,
+  node: ts.Node,
+  content: string
+) {
+  insert(host, modulePath, [
+    new ReplaceChange(modulePath, node.pos, node.getFullText(), content)
+  ]);
+}