diff --git a/lib/craco-less.dev.test.js b/lib/craco-less.dev.test.js
index 3bcfdfe..db48a72 100644
--- a/lib/craco-less.dev.test.js
+++ b/lib/craco-less.dev.test.js
@@ -55,12 +55,15 @@ test("the webpack config is modified correctly without any options", () => {
   expect(lessRule.use[1].loader).toContain(`${path.sep}css-loader`);
   expect(lessRule.use[1].options).toEqual({
     importLoaders: 3,
+    modules: {
+      mode: "icss",
+    },
     sourceMap: webpackConfig.devtool !== false,
   });
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -81,15 +84,18 @@ test("the webpack config is modified correctly without any options", () => {
   expect(lessModuleRule.use[1].loader).toContain(`${path.sep}css-loader`);
   expect(lessModuleRule.use[1].options).toEqual({
     importLoaders: 3,
-    sourceMap: webpackConfig.devtool !== false,
     modules: {
       getLocalIdent: getCSSModuleLocalIdent,
+      mode: "local",
     },
+    sourceMap: webpackConfig.devtool !== false,
   });
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
@@ -144,12 +150,15 @@ test("the webpack config is modified correctly without any options on Windows",
   expect(lessRule.use[1].loader).toContain("\\css-loader");
   expect(lessRule.use[1].options).toEqual({
     importLoaders: 3,
+    modules: {
+      mode: "icss",
+    },
     sourceMap: webpackConfig.devtool !== false,
   });
 
   expect(lessRule.use[2].loader).toContain("\\postcss-loader");
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`\\resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -174,12 +183,15 @@ test("the webpack config is modified correctly without any options on Windows",
     sourceMap: webpackConfig.devtool !== false,
     modules: {
       getLocalIdent: getCSSModuleLocalIdent,
+      mode: "local",
     },
   });
 
   expect(lessModuleRule.use[2].loader).toContain("\\postcss-loader");
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(`\\resolve-url-loader`);
   expect(lessModuleRule.use[3].options).toEqual({
@@ -217,8 +229,8 @@ test("the webpack config is modified correctly with less-loader options", () =>
   expect(lessRule).not.toBeUndefined();
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -241,8 +253,10 @@ test("the webpack config is modified correctly with less-loader options", () =>
   expect(lessModuleRule).not.toBeUndefined();
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
@@ -312,8 +326,8 @@ test("the webpack config is modified correctly with all loader options", () => {
   });
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("test-ident");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("test-ident");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -348,8 +362,12 @@ test("the webpack config is modified correctly with all loader options", () => {
   });
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("test-ident");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual(
+    "test-ident"
+  );
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
@@ -399,8 +417,8 @@ test("the webpack config is modified correctly with the modifyLessRule option",
   expect(lessRule.use[0].options.testOption).toEqual("test-value-development");
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -452,8 +470,10 @@ test("the webpack config is modified correctly with the modifyLessModuleRule opt
   );
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
diff --git a/lib/craco-less.prod.test.js b/lib/craco-less.prod.test.js
index 8e3bd6c..01808b0 100644
--- a/lib/craco-less.prod.test.js
+++ b/lib/craco-less.prod.test.js
@@ -57,12 +57,15 @@ test("the webpack config is modified correctly without any options", () => {
   expect(lessRule.use[1].loader).toContain(`${path.sep}css-loader`);
   expect(lessRule.use[1].options).toEqual({
     importLoaders: 3,
+    modules: {
+      mode: "icss",
+    },
     sourceMap: true,
   });
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -90,12 +93,15 @@ test("the webpack config is modified correctly without any options", () => {
     sourceMap: true,
     modules: {
       getLocalIdent: getCSSModuleLocalIdent,
+      mode: "local",
     },
   });
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
@@ -152,12 +158,15 @@ test("the webpack config is modified correctly without any options on Windows",
   expect(lessRule.use[1].loader).toContain("\\css-loader");
   expect(lessRule.use[1].options).toEqual({
     importLoaders: 3,
+    modules: {
+      mode: "icss",
+    },
     sourceMap: true,
   });
 
   expect(lessRule.use[2].loader).toContain("\\postcss-loader");
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`\\resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -182,12 +191,15 @@ test("the webpack config is modified correctly without any options on Windows",
     sourceMap: true,
     modules: {
       getLocalIdent: getCSSModuleLocalIdent,
+      mode: "local",
     },
   });
 
   expect(lessModuleRule.use[2].loader).toContain("\\postcss-loader");
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(`\\resolve-url-loader`);
   expect(lessModuleRule.use[3].options).toEqual({
@@ -225,8 +237,8 @@ test("the webpack config is modified correctly with less-loader options", () =>
   expect(lessRule).not.toBeUndefined();
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -249,8 +261,10 @@ test("the webpack config is modified correctly with less-loader options", () =>
   expect(lessModuleRule).not.toBeUndefined();
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
@@ -320,10 +334,9 @@ test("the webpack config is modified correctly with all loader options", () => {
     localIdentName: "[local]_[hash:base64:5]",
     sourceMap: true,
   });
-
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("test-ident");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("test-ident");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -360,8 +373,12 @@ test("the webpack config is modified correctly with all loader options", () => {
   });
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("test-ident");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual(
+    "test-ident"
+  );
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`
@@ -413,8 +430,8 @@ test("the webpack config is modified correctly with the modifyLessRule option",
   expect(lessRule.use[0].options.testOption).toEqual("test-value-production");
 
   expect(lessRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessRule.use[2].options.ident).toEqual("postcss");
-  expect(lessRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(lessRule.use[2].options.postcssOptions.plugins).not.toBeUndefined();
 
   expect(lessRule.use[3].loader).toContain(`${path.sep}resolve-url-loader`);
   expect(lessRule.use[3].options).toEqual({
@@ -470,8 +487,10 @@ test("the webpack config is modified correctly with the modifyLessModuleRule opt
   );
 
   expect(lessModuleRule.use[2].loader).toContain(`${path.sep}postcss-loader`);
-  expect(lessModuleRule.use[2].options.ident).toEqual("postcss");
-  expect(lessModuleRule.use[2].options.plugins).not.toBeUndefined();
+  expect(lessModuleRule.use[2].options.postcssOptions.ident).toEqual("postcss");
+  expect(
+    lessModuleRule.use[2].options.postcssOptions.plugins
+  ).not.toBeUndefined();
 
   expect(lessModuleRule.use[3].loader).toContain(
     `${path.sep}resolve-url-loader`