diff --git a/docs/configuration.md b/docs/configuration.md
index fb612d31fc..65dd36f472 100644
--- a/docs/configuration.md
+++ b/docs/configuration.md
@@ -100,11 +100,13 @@ export N8N_CUSTOM_EXTENSIONS="/home/jim/n8n/custom-nodes;/data/n8n/nodes"
 ```
 
 
-## Use built-in modules in Function-Nodes
+## Use built-in and external modules in Function-Nodes
 
-By default is it for security reasons not allowed to import modules in Function-Nodes.
-It is, however, possible to lift that restriction for built-in modules by setting the
-environment variable `NODE_FUNCTION_ALLOW_BUILTIN`.
+For security reasons, importing modules is restricted by default in Function-Nodes.
+It is, however, possible to lift that restriction for built-in and external modules by
+setting the following environment variables:
+`NODE_FUNCTION_ALLOW_BUILTIN`: For builtin modules
+`NODE_FUNCTION_ALLOW_EXTERNAL`: For external modules sourced from n8n/node_modules directory. External module support is disabled when env variable is not set.
 
 ```bash
 # Allows usage of all builtin modules
@@ -115,6 +117,9 @@ export NODE_FUNCTION_ALLOW_BUILTIN=crypto
 
 # Allows usage of only crypto and fs
 export NODE_FUNCTION_ALLOW_BUILTIN=crypto,fs
+
+# Allow usage of external npm modules. Wildcard matching is not supported.
+export NODE_FUNCTION_ALLOW_EXTERNAL=moment,lodash
 ```
 
 
diff --git a/packages/nodes-base/nodes/Function.node.ts b/packages/nodes-base/nodes/Function.node.ts
index 558bb50ed3..7892a0a5c0 100644
--- a/packages/nodes-base/nodes/Function.node.ts
+++ b/packages/nodes-base/nodes/Function.node.ts
@@ -63,9 +63,8 @@ export class Function implements INodeType {
 			console: 'inherit',
 			sandbox,
 			require: {
-				external: false,
+				external: false as boolean | { modules: string[] },
 				builtin: [] as string[],
-				root: './',
 			}
 		};
 
@@ -73,6 +72,11 @@ export class Function implements INodeType {
 			options.require.builtin = process.env.NODE_FUNCTION_ALLOW_BUILTIN.split(',');
 		}
 
+		if (process.env.NODE_FUNCTION_ALLOW_EXTERNAL) {
+			options.require.external = { modules: process.env.NODE_FUNCTION_ALLOW_EXTERNAL.split(',') };
+		}
+
+
 		const vm = new NodeVM(options);
 
 		// Get the code to execute
@@ -80,7 +84,7 @@ export class Function implements INodeType {
 
 		try {
 			// Execute the function code
-			items = (await vm.run(`module.exports = async function() {${functionCode}}()`));
+			items = (await vm.run(`module.exports = async function() {${functionCode}}()`, './'));
 		} catch (e) {
 			return Promise.reject(e);
 		}