diff --git a/lib/generators/suspenders/styles_generator.rb b/lib/generators/suspenders/styles_generator.rb
index a4703a223..cdc5feef5 100644
--- a/lib/generators/suspenders/styles_generator.rb
+++ b/lib/generators/suspenders/styles_generator.rb
@@ -3,6 +3,7 @@ module Generators
     class StylesGenerator < Rails::Generators::Base
       include Suspenders::Generators::APIAppUnsupported
 
+      source_root File.expand_path("../../templates/styles", __FILE__)
       desc <<~MARKDOWN
         Configures application to use PostCSS via cssbundling-rails.
 
@@ -39,6 +40,25 @@ def configure_application_stylesheet
           TEXT
         end
       end
+
+      def install_postcss_url
+        run "yarn add postcss-url"
+      end
+
+      def configures_postcss
+        File.delete(postcss_config) if File.exist?(postcss_config)
+
+        empty_directory "app/assets/static"
+        create_file "app/assets/static/.gitkeep"
+
+        copy_file "postcss.config.js", "postcss.config.js"
+      end
+
+      private
+
+      def postcss_config
+        Rails.root.join("postcss.config.js")
+      end
     end
   end
 end
diff --git a/lib/generators/templates/styles/postcss.config.js b/lib/generators/templates/styles/postcss.config.js
new file mode 100644
index 000000000..9c48e607b
--- /dev/null
+++ b/lib/generators/templates/styles/postcss.config.js
@@ -0,0 +1,11 @@
+module.exports = {
+  plugins: [
+    require('postcss-import'),
+    require('postcss-nesting'),
+    require('autoprefixer'),
+    require('postcss-url')({
+      url: 'copy',
+      assetsPath: 'app/assets/static'
+    })
+  ],
+}
diff --git a/test/fixtures/files/postcss.config.js b/test/fixtures/files/postcss.config.js
new file mode 100644
index 000000000..9c48e607b
--- /dev/null
+++ b/test/fixtures/files/postcss.config.js
@@ -0,0 +1,11 @@
+module.exports = {
+  plugins: [
+    require('postcss-import'),
+    require('postcss-nesting'),
+    require('autoprefixer'),
+    require('postcss-url')({
+      url: 'copy',
+      assetsPath: 'app/assets/static'
+    })
+  ],
+}
diff --git a/test/generators/suspenders/styles_generator_test.rb b/test/generators/suspenders/styles_generator_test.rb
index 684d909c4..6647643d6 100644
--- a/test/generators/suspenders/styles_generator_test.rb
+++ b/test/generators/suspenders/styles_generator_test.rb
@@ -75,6 +75,39 @@ class StylesGeneratorTest < Rails::Generators::TestCase
         end
       end
 
+      test "installs postcss-url" do
+        output = run_generator
+
+        assert_match(/add\s*postcss-url/, output)
+      end
+
+      test "configures postcss.config.js" do
+        expected = file_fixture("postcss.config.js").read
+
+        run_generator
+
+        assert_file app_root("postcss.config.js") do |file|
+          assert_equal expected, file
+        end
+      end
+
+      test "overrides existing postcss.config.js" do
+        touch "postcss.config.js", content: "unexpected"
+        expected = file_fixture("postcss.config.js").read
+
+        run_generator
+
+        assert_file app_root("postcss.config.js") do |file|
+          assert_equal expected, file
+        end
+      end
+
+      test "creates directory to store static assets generated from postcss-url" do
+        run_generator
+
+        assert_file app_root("app/assets/static/.gitkeep")
+      end
+
       test "generator has a custom description" do
         assert_no_match(/Description/, generator_class.desc)
       end
@@ -94,6 +127,8 @@ def restore_destination
         remove_file_if_exists "app/assets/stylesheets/base.css"
         remove_file_if_exists "app/assets/stylesheets/components.css"
         remove_file_if_exists "app/assets/stylesheets/utilities.css"
+        remove_file_if_exists "postcss.config.js"
+        remove_dir_if_exists "app/assets/static"
       end
     end
   end