diff --git a/examples/app-router/app/isr/dynamic-params-false/[id]/page.tsx b/examples/app-router/app/isr/dynamic-params-false/[id]/page.tsx
new file mode 100644
index 000000000..4b9701730
--- /dev/null
+++ b/examples/app-router/app/isr/dynamic-params-false/[id]/page.tsx
@@ -0,0 +1,38 @@
+// https://nextjs.org/docs/app/api-reference/file-conventions/route-segment-config#dynamicparams
+export const dynamicParams = false; // or true, to make it try SSR unknown paths
+
+const POSTS = Array.from({ length: 20 }, (_, i) => ({
+  id: String(i + 1),
+  title: `Post ${i + 1}`,
+  content: `This is post ${i + 1}`,
+}));
+
+async function fakeGetPostsFetch() {
+  return POSTS.slice(0, 10);
+}
+
+async function fakeGetPostFetch(id: string) {
+  return POSTS.find((post) => post.id === id);
+}
+
+export async function generateStaticParams() {
+  const fakePosts = await fakeGetPostsFetch();
+  return fakePosts.map((post) => ({
+    id: post.id,
+  }));
+}
+
+export default async function Page({
+  params,
+}: {
+  params: Promise<{ id: string }>;
+}) {
+  const { id } = await params;
+  const post = await fakeGetPostFetch(id);
+  return (
+    <main>
+      <h1 data-testid="title">{post?.title}</h1>
+      <p data-testid="content">{post?.content}</p>
+    </main>
+  );
+}
diff --git a/examples/app-router/app/isr/dynamic-params-true/[id]/page.tsx b/examples/app-router/app/isr/dynamic-params-true/[id]/page.tsx
new file mode 100644
index 000000000..8134d0bff
--- /dev/null
+++ b/examples/app-router/app/isr/dynamic-params-true/[id]/page.tsx
@@ -0,0 +1,49 @@
+import { notFound } from "next/navigation";
+
+// We'll prerender only the params from `generateStaticParams` at build time.
+// If a request comes in for a path that hasn't been generated,
+// Next.js will server-render the page on-demand.
+// https://nextjs.org/docs/app/api-reference/file-conventions/route-segment-config#dynamicparams
+export const dynamicParams = true; // or false, to 404 on unknown paths
+
+const POSTS = Array.from({ length: 20 }, (_, i) => ({
+  id: String(i + 1),
+  title: `Post ${i + 1}`,
+  content: `This is post ${i + 1}`,
+}));
+
+async function fakeGetPostsFetch() {
+  return POSTS.slice(0, 10);
+}
+
+async function fakeGetPostFetch(id: string) {
+  return POSTS.find((post) => post.id === id);
+}
+
+export async function generateStaticParams() {
+  const fakePosts = await fakeGetPostsFetch();
+  return fakePosts.map((post) => ({
+    id: post.id,
+  }));
+}
+
+export default async function Page({
+  params,
+}: {
+  params: Promise<{ id: string }>;
+}) {
+  const { id } = await params;
+  const post = await fakeGetPostFetch(id);
+  if (Number(id) === 1337) {
+    throw new Error("This is an error!");
+  }
+  if (!post) {
+    notFound();
+  }
+  return (
+    <main>
+      <h1 data-testid="title">{post.title}</h1>
+      <p data-testid="content">{post.content}</p>
+    </main>
+  );
+}
diff --git a/packages/tests-e2e/tests/appRouter/isr.test.ts b/packages/tests-e2e/tests/appRouter/isr.test.ts
index 4f6ae78ef..db7a23435 100644
--- a/packages/tests-e2e/tests/appRouter/isr.test.ts
+++ b/packages/tests-e2e/tests/appRouter/isr.test.ts
@@ -93,3 +93,64 @@ test("Incremental Static Regeneration with data cache", async ({ page }) => {
   expect(originalCachedDate).toEqual(finalCachedDate);
   expect(originalFetchedDate).toEqual(finalFetchedDate);
 });
+
+test.describe("dynamicParams set to true", () => {
+  test("should be HIT on a path that was prebuilt", async ({ page }) => {
+    const res = await page.goto("/isr/dynamic-params-true/1");
+    expect(res?.status()).toEqual(200);
+    expect(res?.headers()["x-nextjs-cache"]).toEqual("HIT");
+    const title = await page.getByTestId("title").textContent();
+    const content = await page.getByTestId("content").textContent();
+    expect(title).toEqual("Post 1");
+    expect(content).toEqual("This is post 1");
+  });
+
+  // In `next start` this test would fail on subsequent requests because `x-nextjs-cache` would be `HIT`
+  // However, once deployed to AWS, Cloudfront will cache `MISS`
+  test("should SSR on a path that was not prebuilt", async ({ page }) => {
+    const res = await page.goto("/isr/dynamic-params-true/11");
+    expect(res?.headers()["x-nextjs-cache"]).toEqual("MISS");
+    const title = await page.getByTestId("title").textContent();
+    const content = await page.getByTestId("content").textContent();
+    expect(title).toEqual("Post 11");
+    expect(content).toEqual("This is post 11");
+  });
+
+  test("should 404 when you call notFound", async ({ page }) => {
+    const res = await page.goto("/isr/dynamic-params-true/21");
+    expect(res?.status()).toEqual(404);
+    expect(res?.headers()["cache-control"]).toBe(
+      "private, no-cache, no-store, max-age=0, must-revalidate",
+    );
+    await expect(page.getByText("404")).toBeAttached();
+  });
+
+  test("should 500 for a path that throws an error", async ({ page }) => {
+    const res = await page.goto("/isr/dynamic-params-true/1337");
+    expect(res?.status()).toEqual(500);
+    expect(res?.headers()["cache-control"]).toBe(
+      "private, no-cache, no-store, max-age=0, must-revalidate",
+    );
+  });
+});
+
+test.describe("dynamicParams set to false", () => {
+  test("should be HIT on a path that was prebuilt", async ({ page }) => {
+    const res = await page.goto("/isr/dynamic-params-false/1");
+    expect(res?.status()).toEqual(200);
+    expect(res?.headers()["x-nextjs-cache"]).toEqual("HIT");
+    const title = await page.getByTestId("title").textContent();
+    const content = await page.getByTestId("content").textContent();
+    expect(title).toEqual("Post 1");
+    expect(content).toEqual("This is post 1");
+  });
+
+  test("should 404 for a path that is not found", async ({ page }) => {
+    const res = await page.goto("/isr/dynamic-params-false/11");
+    expect(res?.status()).toEqual(404);
+    expect(res?.headers()["cache-control"]).toBe(
+      "private, no-cache, no-store, max-age=0, must-revalidate",
+    );
+    await expect(page.getByText("404")).toBeAttached();
+  });
+});