diff --git a/.che-dev.yaml b/.che-dev.yaml
deleted file mode 100644
index 4f02ccc5121..00000000000
--- a/.che-dev.yaml
+++ /dev/null
@@ -1,46 +0,0 @@
----
-kind: List
-items:
- - apiVersion: v1
-   kind: Pod
-   metadata:
-     name: ws
-   spec:
-     containers:
-     - name: dev
-       image: 'eclipse/che-dev:nightly'
-       resources:
-         limits:
-           memory: 5Gi
-       volumeMounts:
-       - mountPath: /projects
-         name: projects
-       - mountPath: /home/user/.m2
-         name: maven
-     volumes:
-     - name: projects
-       persistentVolumeClaim:
-         claimName: projects
-     - name: maven
-       persistentVolumeClaim:
-          claimName: maven
- - apiVersion: v1
-   kind: PersistentVolumeClaim
-   metadata:
-     name: projects
-   spec:
-     accessModes:
-      - ReadWriteOnce
-     resources:
-       requests:
-         storage: 2Gi
- - apiVersion: v1
-   kind: PersistentVolumeClaim
-   metadata:
-     name: maven
-   spec:
-     accessModes:
-      - ReadWriteOnce
-     resources:
-       requests:
-         storage: 3Gi
diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 2f00a3ebeff..b526a5d35bc 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -199,5 +199,44 @@ $ yarn start --disable-host-check --public=$(echo ${server.dev-server} | sed -e
 ```
 
 ### Che server a.k.a WS master
+There is a [devfile](https://github.com/eclipse/che/blob/master/devfile.yaml) for development of Che server in Che.
+To build Che one may run a predefined build task from the devfile.
+
+Starting Che master requires some manual steps.
+Open a terminal in runtime container (`che-server-runtime`) and perform:
+ - First, set `CHE_HOME` environment variable with absolute path to parent folder of Che master's Tomcat.
+   It might look like `/projects/che/assembly/assembly-main/target/eclipse-che-*-SNAPSHOT/eclipse-che-*-SNAPSHOT`.
+ - Then set `CHE_HOST` with the endpoint of new Che master.
+   If using the [devfile](devfile.yaml) the endpoint is `che-dev` and already set.
+ - After, set `CHE_INFRASTRUCTURE_ACTIVE` according to your environment.
+   For example: `openshift` (note, use `kubernetes` and `openshift` insted of `minikube` and `minishift` correspondingly).
+ - Run `/entrypoint.sh`.
+   After this, new Che master should be accesible from the `che-dev` endpoint.
+   To reach Swagger use url from `che-dev` endpoint with `/swagger` suffix.
+
+To start a workspace from Che server under development some additional configuration of the cluster is needed.
+One should add rights for the service account to be able to perform all needed for Che server actions.
+Example for Openshift (in case of Kubernetes replace `oc` with `kubectl`):
+```bash
+cat << EOF | oc apply -f -
+apiVersion: rbac.authorization.k8s.io/v1
+kind: RoleBinding
+metadata:
+  labels:
+    app: che
+    component: che
+  name: che-workspace-admin
+  namespace: che
+roleRef:
+  apiGroup: rbac.authorization.k8s.io
+  kind: ClusterRole
+  name: admin
+subjects:
+- kind: ServiceAccount
+  name: che-workspace
+  namespace: che
+EOF
+```
 
-To be provided soon.
+Also `CHE_API_INTERNAL`, `CHE_API_EXTERNAL` and `CHE_API` should be set in runner container and point to new Che server API.
+If one uses provided devfile, they are already set to: `http://che-dev:8080/api`, which should be changed in case of https protocol.
diff --git a/devfile.yaml b/devfile.yaml
index 86d5c3b0d7b..5f9d291f021 100644
--- a/devfile.yaml
+++ b/devfile.yaml
@@ -1,19 +1,57 @@
 apiVersion: 1.0.0
 metadata:
-  name: che-in-che
+  name: che-server-in-che
 projects:
   - name: che
     source:
       type: git
       location: 'https://github.com/eclipse/che.git'
 components:
-  - alias: che-dev
-    type: kubernetes
-    reference: .che-dev.yaml
+  - type: dockerimage
+    image: 'eclipse/che-dev:nightly'
+    alias: che-server-dev
+    mountSources: true
+    memoryLimit: 5Gi
+    volumes:
+      - name: maven
+        containerPath: /home/user/.m2
+  - type: dockerimage
+    image: 'eclipse/che-server:nightly'
+    alias: che-server-runtime
+    mountSources: true
+    memoryLimit: 1Gi
+    endpoints:
+      - name: che-dev
+        attributes:
+          discoverable: 'true'
+          public: 'true'
+        port: 8080
+    env:
+      - name: CHE_HOST
+        value: 'che-dev'
+      - name: CHE_API
+        value: http://che-dev:8080/api
+      - name: CHE_API_INTERNAL
+        value: http://che-dev:8080/api
+      - name: CHE_API_EXTERNAL
+        value: http://che-dev:8080/api
+    command:
+      - 'tail'
+    args:
+      - '-f'
+      - '/dev/null'
+  - type: chePlugin
+    id: redhat/java8/latest
 commands:
-  - name: fastbuild
+  - name: build
     actions:
       - type: exec
-        component: che-dev
-        command: cd /projects/che && mvn clean install -Pnative -DskipTests=true
+        component: che-server-dev
+        command: mvn clean install -Pnative -DskipIntegrationTests
+        workdir: /projects/che
+  - name: build without tests
+    actions:
+      - type: exec
+        component: che-server-dev
+        command: mvn clean install -Pnative -DskipTests=true
         workdir: /projects/che
diff --git a/dockerfiles/che/entrypoint.sh b/dockerfiles/che/entrypoint.sh
index efd25da767b..5216ef3d203 100755
--- a/dockerfiles/che/entrypoint.sh
+++ b/dockerfiles/che/entrypoint.sh
@@ -227,12 +227,17 @@ init() {
   ### Any variables with export is a value that native Tomcat che.sh startup script requires
   export CHE_IP=${CHE_IP}
 
-  if [ -f "/assembly/tomcat/bin/catalina.sh" ]; then
-    echo "Found custom assembly..."
-    export CHE_HOME="/assembly"
+  if [ -z "$CHE_HOME" ]; then
+    if [ -f "/assembly/tomcat/bin/catalina.sh" ]; then
+      echo "Found custom assembly in /assembly"
+      export CHE_HOME="/assembly"
+    else
+      echo "Using embedded assembly."
+      export CHE_HOME=$(echo /home/user/eclipse-che/)
+    fi
   else
-    echo "Using embedded assembly..."
-    export CHE_HOME=$(echo /home/user/eclipse-che/)
+    export CHE_HOME=$(echo ${CHE_HOME})
+    echo "Using custom assembly from $CHE_HOME"
   fi
 
   ### We need to discover the host mount provided by the user for `/data`