diff --git a/src/lib/functions/server.ts b/src/lib/functions/server.ts
index 05aefd9e9ff..de4ea543ef7 100644
--- a/src/lib/functions/server.ts
+++ b/src/lib/functions/server.ts
@@ -34,21 +34,35 @@ const buildClientContext = function (headers) {
   const parts = headers.authorization.split(' ')
   if (parts.length !== 2 || parts[0] !== 'Bearer') return
 
+  const identity = {
+    url: 'https://netlify-dev-locally-emulated-identity.netlify.com/.netlify/identity',
+    token:
+      'eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJuZXRsaWZ5IGRldiIsInRlc3REYXRhIjoiTkVUTElGWV9ERVZfTE9DQUxMWV9FTVVMQVRFRF9JREVOVElUWSJ9.2eSDqUOZAOBsx39FHFePjYj12k0LrxldvGnlvDu3GMI',
+    // you can decode this with https://jwt.io/
+    // just says
+    // {
+    //   "source": "netlify dev",
+    //   "testData": "NETLIFY_DEV_LOCALLY_EMULATED_IDENTITY"
+    // }
+  }
+
+  // This data is available on both the context root and under custom.netlify for retro-compatibility.
+  // In the future it will only be available in custom.netlify.
+  // @ts-expect-error
+  const user = jwtDecode(parts[1])
+
+  const netlifyContext = JSON.stringify({
+    identity: identity,
+    user: user,
+  })
+
   try {
     return {
-      identity: {
-        url: 'https://netlify-dev-locally-emulated-identity.netlify.com/.netlify/identity',
-        token:
-          'eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJuZXRsaWZ5IGRldiIsInRlc3REYXRhIjoiTkVUTElGWV9ERVZfTE9DQUxMWV9FTVVMQVRFRF9JREVOVElUWSJ9.2eSDqUOZAOBsx39FHFePjYj12k0LrxldvGnlvDu3GMI',
-        // you can decode this with https://jwt.io/
-        // just says
-        // {
-        //   "source": "netlify dev",
-        //   "testData": "NETLIFY_DEV_LOCALLY_EMULATED_IDENTITY"
-        // }
+      identity: identity,
+      user: user,
+      custom: {
+        netlify: Buffer.from(netlifyContext).toString('base64'),
       },
-      // @ts-expect-error
-      user: jwtDecode(parts[1]),
     }
   } catch {
     // Ignore errors - bearer token is not a JWT, probably not intended for us
diff --git a/tests/integration/commands/dev/dev-miscellaneous.test.js b/tests/integration/commands/dev/dev-miscellaneous.test.js
index 56e2104346b..5b3e40440de 100644
--- a/tests/integration/commands/dev/dev-miscellaneous.test.js
+++ b/tests/integration/commands/dev/dev-miscellaneous.test.js
@@ -1,3 +1,4 @@
+import { Buffer } from 'buffer'
 import path from 'path'
 import { fileURLToPath } from 'url'
 
@@ -151,6 +152,35 @@ describe.concurrent('commands/dev-miscellaneous', () => {
     })
   })
 
+  test('function clientContext.custom.netlify should be set', async (t) => {
+    await withSiteBuilder('site-with-function', async (builder) => {
+      await builder
+        .withNetlifyToml({ config: { functions: { directory: 'functions' } } })
+        .withFunction({
+          path: 'hello.js',
+          handler: async (_, context) => ({
+            statusCode: 200,
+            body: JSON.stringify(context),
+          }),
+        })
+        .buildAsync()
+
+      await withDevServer({ cwd: builder.directory }, async (server) => {
+        const response = await fetch(`${server.url}/.netlify/functions/hello`, {
+          headers: {
+            Authorization:
+              'Bearer eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJuZXRsaWZ5IGRldiIsInRlc3REYXRhIjoiTkVUTElGWV9ERVZfTE9DQUxMWV9FTVVMQVRFRF9JREVOVElUWSJ9.2eSDqUOZAOBsx39FHFePjYj12k0LrxldvGnlvDu3GMI',
+          },
+        }).then((res) => res.json())
+
+        const netlifyContext = Buffer.from(response.clientContext.custom.netlify, 'base64').toString()
+        t.expect(JSON.parse(netlifyContext).identity.url).toEqual(
+          'https://netlify-dev-locally-emulated-identity.netlify.com/.netlify/identity',
+        )
+      })
+    })
+  })
+
   test('should enforce role based redirects with default secret and role path', async (t) => {
     await withSiteBuilder('site-with-default-role-based-redirects', async (builder) => {
       setupRoleBasedRedirectsSite(builder)