diff --git a/emcc.py b/emcc.py
index 49a0a288135e1..777fa36385a27 100755
--- a/emcc.py
+++ b/emcc.py
@@ -2604,24 +2604,43 @@ def modularize():
   final = final + '.modular.js'
   f = open(final, 'w')
 
-  # Included code may refer to Module (e.g. from file packager), so alias it
-  f.write('''var %(EXPORT_NAME)s = function(%(EXPORT_NAME)s) {
+  src = '''
+function(%(EXPORT_NAME)s) {
   %(EXPORT_NAME)s = %(EXPORT_NAME)s || {};
 
 %(src)s
 
   return %(EXPORT_NAME)s;
-};
-// When MODULARIZE, this JS may be executed later, after document.currentScript
-// is gone, so we save it.
-%(EXPORT_NAME)s = %(EXPORT_NAME)s.bind({
-  _scriptDir: typeof document !== 'undefined' && document.currentScript ? document.currentScript.src : undefined
-})%(instantiate)s;
+}
 ''' % {
     'EXPORT_NAME': shared.Settings.EXPORT_NAME,
-    'src': src,
-    'instantiate': '()' if shared.Settings.MODULARIZE_INSTANCE else ''
-  })
+    'src': src
+  }
+
+  if not shared.Settings.MODULARIZE_INSTANCE:
+    # When MODULARIZE this JS may be executed later,
+    # after document.currentScript is gone, so we save it.
+    # (when MODULARIZE_INSTANCE, an instance is created
+    # immediately anyhow, like in non-modularize mode)
+    src = '''
+var %(EXPORT_NAME)s = (function() {
+  var _scriptDir = typeof document !== 'undefined' && document.currentScript ? document.currentScript.src : undefined;
+  return (%(src)s);
+})();
+''' % {
+      'EXPORT_NAME': shared.Settings.EXPORT_NAME,
+      'src': src
+    }
+  else:
+    # Create the MODULARIZE_INSTANCE instance
+    src = '''
+var %(EXPORT_NAME)s = (%(src)s)();
+''' % {
+      'EXPORT_NAME': shared.Settings.EXPORT_NAME,
+      'src': src
+    }
+
+  f.write(src)
 
   # Export using a UMD style export, or ES6 exports if selected
   if shared.Settings.EXPORT_ES6:
diff --git a/src/closure-externs.js b/src/closure-externs.js
index 24721dcb9575b..dcc8aede9232f 100644
--- a/src/closure-externs.js
+++ b/src/closure-externs.js
@@ -1073,6 +1073,10 @@ var wakaUnknownAfter;
  * @suppress {undefinedVars}
  */
 var wakaUnknownBefore;
+/**
+ * @suppress {undefinedVars}
+ */
+var _scriptDir;
 /**
  * @suppress {duplicate}
  */
diff --git a/src/shell.js b/src/shell.js
index adcb3c7aad6b0..019f94bbf2742 100644
--- a/src/shell.js
+++ b/src/shell.js
@@ -237,11 +237,13 @@ if (ENVIRONMENT_IS_WEB || ENVIRONMENT_IS_WORKER) {
     scriptDirectory = self.location.href;
   }
 #if MODULARIZE
-  // When MODULARIZE, this JS may be executed later, after document.currentScript
+#if MODULARIZE_INSTANCE == 0
+  // When MODULARIZE (and not _INSTANCE), this JS may be executed later, after document.currentScript
   // is gone, so we saved it, and we use it here instead of any other info.
-  if (this['_scriptDir']) {
-    scriptDirectory = this['_scriptDir'];
+  if (_scriptDir) {
+    scriptDirectory = _scriptDir;
   }
+#endif
 #endif
   // blob urls look like blob:http://site.com/etc/etc and we cannot infer anything from them.
   // otherwise, slice off the final part of the url to find the script directory.
diff --git a/tests/test_browser.py b/tests/test_browser.py
index b0c619333c4ef..f39903dc9a368 100644
--- a/tests/test_browser.py
+++ b/tests/test_browser.py
@@ -3950,46 +3950,53 @@ def test_browser_run_from_different_directory(self):
     src = open('test.html').read()
     # Make sure JS is loaded from subdirectory
     open('test-subdir.html', 'w').write(src.replace('test.js', 'subdir/test.js'))
-
     self.run_browser('test-subdir.html', None, '/report_result?0')
 
   # Similar to `test_browser_run_from_different_directory`, but asynchronous because of `-s MODULARIZE=1`
   def test_browser_run_from_different_directory_async(self):
     src = open(path_from_root('tests', 'browser_test_hello_world.c')).read()
     open('test.c', 'w').write(self.with_report_result(src))
-    # compile the code with the modularize feature and the preload-file option enabled
-    Popen([PYTHON, EMCC, 'test.c', '-o', 'test.js', '-s', 'MODULARIZE=1', '-O3']).communicate()
-    if not os.path.exists('subdir'):
-      os.mkdir('subdir')
-    shutil.move('test.js', os.path.join('subdir', 'test.js'))
-    shutil.move('test.wasm', os.path.join('subdir', 'test.wasm'))
-    # Make sure JS is loaded from subdirectory
-    open('test-subdir.html', 'w').write('''
-      <script src="subdir/test.js"></script>
-      <script>
-        Module();
-      </script>
-    ''')
-
-    self.run_browser('test-subdir.html', None, '/report_result?0')
+    for args, creations in [
+      (['-s', 'MODULARIZE=1'], [
+        'Module();',    # documented way for using modularize
+        'new Module();' # not documented as working, but we support it
+       ]),
+      (['-s', 'MODULARIZE_INSTANCE=1'], ['']) # instance: no need to create anything
+    ]:
+      print(args)
+      # compile the code with the modularize feature and the preload-file option enabled
+      Popen([PYTHON, EMCC, 'test.c', '-o', 'test.js', '-O3'] + args).communicate()
+      if not os.path.exists('subdir'):
+        os.mkdir('subdir')
+      shutil.move('test.js', os.path.join('subdir', 'test.js'))
+      shutil.move('test.wasm', os.path.join('subdir', 'test.wasm'))
+      for creation in creations:
+        print(creation)
+        # Make sure JS is loaded from subdirectory
+        open('test-subdir.html', 'w').write('''
+          <script src="subdir/test.js"></script>
+          <script>
+            %s
+          </script>
+        ''' % creation)
+        self.run_browser('test-subdir.html', None, '/report_result?0')
 
   # Similar to `test_browser_run_from_different_directory`, but
   # also also we eval the initial code, so currentScript is not present. That prevents us
   # from finding the file in a subdir, but here we at least check we do not regress compared to the
   # normal case of finding in the current dir.
-  # In addition, check for new Module(), which overrides the bind() and replaces the object
-  # which saved the _scriptDir. Again, we can't get the script dir that way, but at least we
-  # should not regress compared to the normal case.
   def test_browser_modularize_no_current_script(self):
     src = open(path_from_root('tests', 'browser_test_hello_world.c')).read()
     open('test.c', 'w').write(self.with_report_result(src))
-    # compile the code with the modularize feature and the preload-file option enabled
-    Popen([PYTHON, EMCC, 'test.c', '-o', 'test.js', '-s', 'MODULARIZE=1']).communicate()
-    for creation in (
-      'Module();',
-      'new Module();'
-    ):
-      print(creation)
+    # test both modularize (and creating an instance) and modularize-instance
+    # (which creates by itself)
+    for args, creation in [
+      (['-s', 'MODULARIZE=1'], 'Module();'),
+      (['-s', 'MODULARIZE_INSTANCE=1'], '')
+    ]:
+      print(args, creation)
+      # compile the code with the modularize feature and the preload-file option enabled
+      Popen([PYTHON, EMCC, 'test.c', '-o', 'test.js'] + args).communicate()
       open('test.html', 'w').write('''
         <script>
           setTimeout(function() {