diff --git a/.changeset/eleven-sloths-punch.md b/.changeset/eleven-sloths-punch.md
new file mode 100644
index 00000000..ba3cba92
--- /dev/null
+++ b/.changeset/eleven-sloths-punch.md
@@ -0,0 +1,5 @@
+---
+"@opennextjs/cloudflare": patch
+---
+
+Extract the worker init code to a separate file
diff --git a/packages/cloudflare/src/cli/build/build.ts b/packages/cloudflare/src/cli/build/build.ts
index b0e857e2..3c02b5e1 100644
--- a/packages/cloudflare/src/cli/build/build.ts
+++ b/packages/cloudflare/src/cli/build/build.ts
@@ -12,6 +12,7 @@ import type { ProjectOptions } from "../project-options.js";
 import { bundleServer } from "./bundle-server.js";
 import { compileCacheAssetsManifestSqlFile } from "./open-next/compile-cache-assets-manifest.js";
 import { compileEnvFiles } from "./open-next/compile-env-files.js";
+import { compileInit } from "./open-next/compile-init.js";
 import { compileDurableObjects } from "./open-next/compileDurableObjects.js";
 import { createServerBundle } from "./open-next/createServerBundle.js";
 import { createWranglerConfigIfNotExistent } from "./utils/index.js";
@@ -63,6 +64,9 @@ export async function build(
   // Compile .env files
   compileEnvFiles(options);
 
+  // Compile workerd init
+  compileInit(options);
+
   // Compile middleware
   await createMiddleware(options, { forceOnlyBuildOnce: true });
 
diff --git a/packages/cloudflare/src/cli/build/bundle-server.ts b/packages/cloudflare/src/cli/build/bundle-server.ts
index 6b7d6296..954eaa34 100644
--- a/packages/cloudflare/src/cli/build/bundle-server.ts
+++ b/packages/cloudflare/src/cli/build/bundle-server.ts
@@ -144,46 +144,6 @@ export async function bundleServer(buildOpts: BuildOptions): Promise<void> {
       "process.env.__NEXT_EXPERIMENTAL_REACT": `${needsExperimentalReact(nextConfig)}`,
     },
     platform: "node",
-    banner: {
-      js: `
-// Used by unbundled js files (which don't inherit the __dirname present in the define field)
-// so we also need to set it on the global scope
-// Note: this was hit in the next/dist/compiled/@opentelemetry/api module
-globalThis.__dirname ??= "";
-globalThis.__filename ??= "";
-
-// Do not crash on cache not supported
-// https://github.com/cloudflare/workerd/pull/2434
-// compatibility flag "cache_option_enabled" -> does not support "force-cache"
-const curFetch = globalThis.fetch;
-globalThis.fetch = (input, init) => {
-  if (init) {
-    delete init.cache;
-  }
-  return curFetch(input, init);
-};
-import __cf_stream from 'node:stream';
-fetch = globalThis.fetch;
-const CustomRequest = class extends globalThis.Request {
-  constructor(input, init) {
-    if (init) {
-      delete init.cache;
-      // https://github.com/cloudflare/workerd/issues/2746
-      // https://github.com/cloudflare/workerd/issues/3245
-      Object.defineProperty(init, "body", {
-        value: init.body instanceof __cf_stream.Readable ? ReadableStream.from(init.body) : init.body
-      });
-    }
-    super(input, init);
-  }
-};
-globalThis.Request = CustomRequest;
-Request = globalThis.Request;
-// Makes the edge converter returns either a Response or a Request.
-globalThis.__dangerous_ON_edge_converter_returns_request = true;
-globalThis.__BUILD_TIMESTAMP_MS__ = ${Date.now()};
-`,
-    },
   });
 
   fs.writeFileSync(openNextServerBundle + ".meta.json", JSON.stringify(result.metafile, null, 2));
diff --git a/packages/cloudflare/src/cli/build/open-next/compile-env-files.ts b/packages/cloudflare/src/cli/build/open-next/compile-env-files.ts
index 1709b5cd..e8043779 100644
--- a/packages/cloudflare/src/cli/build/open-next/compile-env-files.ts
+++ b/packages/cloudflare/src/cli/build/open-next/compile-env-files.ts
@@ -9,7 +9,7 @@ import { extractProjectEnvVars } from "../utils/index.js";
  * Compiles the values extracted from the project's env files to the output directory for use in the worker.
  */
 export function compileEnvFiles(buildOpts: BuildOptions) {
-  const envDir = path.join(buildOpts.outputDir, "env");
+  const envDir = path.join(buildOpts.outputDir, "cloudflare");
   fs.mkdirSync(envDir, { recursive: true });
   ["production", "development", "test"].forEach((mode) =>
     fs.appendFileSync(
diff --git a/packages/cloudflare/src/cli/build/open-next/compile-init.ts b/packages/cloudflare/src/cli/build/open-next/compile-init.ts
new file mode 100644
index 00000000..e0a1a829
--- /dev/null
+++ b/packages/cloudflare/src/cli/build/open-next/compile-init.ts
@@ -0,0 +1,27 @@
+import path from "node:path";
+import { fileURLToPath } from "node:url";
+
+import type { BuildOptions } from "@opennextjs/aws/build/helper";
+import { build } from "esbuild";
+
+/**
+ * Compiles the initialization code for the workerd runtime
+ */
+export async function compileInit(options: BuildOptions) {
+  const currentDir = path.join(path.dirname(fileURLToPath(import.meta.url)));
+  const templatesDir = path.join(currentDir, "../../templates");
+  const initPath = path.join(templatesDir, "init.js");
+
+  await build({
+    entryPoints: [initPath],
+    outdir: path.join(options.outputDir, "cloudflare"),
+    bundle: false,
+    minify: false,
+    format: "esm",
+    target: "esnext",
+    platform: "node",
+    define: {
+      __BUILD_TIMESTAMP_MS__: JSON.stringify(Date.now()),
+    },
+  });
+}
diff --git a/packages/cloudflare/src/cli/templates/init.ts b/packages/cloudflare/src/cli/templates/init.ts
new file mode 100644
index 00000000..00e84c07
--- /dev/null
+++ b/packages/cloudflare/src/cli/templates/init.ts
@@ -0,0 +1,128 @@
+/**
+ * Initialization for the workerd runtime.
+ *
+ * The file must be imported at the top level the worker.
+ */
+
+import { AsyncLocalStorage } from "node:async_hooks";
+import process from "node:process";
+import stream from "node:stream";
+
+// @ts-expect-error: resolved by wrangler build
+import * as nextEnvVars from "./next-env.mjs";
+
+const cloudflareContextALS = new AsyncLocalStorage();
+
+// Note: this symbol needs to be kept in sync with `src/api/get-cloudflare-context.ts`
+Object.defineProperty(globalThis, Symbol.for("__cloudflare-context__"), {
+  get() {
+    return cloudflareContextALS.getStore();
+  },
+});
+
+/**
+ * Executes the handler with the Cloudflare context.
+ */
+export async function runWithCloudflareRequestContext(
+  request: Request,
+  env: CloudflareEnv,
+  ctx: ExecutionContext,
+  handler: () => Promise<Response>
+): Promise<Response> {
+  init(request, env);
+
+  return cloudflareContextALS.run({ env, ctx, cf: request.cf }, handler);
+}
+
+let initialized = false;
+
+/**
+ * Initializes the runtime on the first call,
+ * no-op on subsequent invocations.
+ */
+function init(request: Request, env: CloudflareEnv) {
+  if (initialized) {
+    return;
+  }
+  initialized = true;
+
+  const url = new URL(request.url);
+
+  initRuntime();
+  populateProcessEnv(url, env);
+}
+
+function initRuntime() {
+  // Some packages rely on `process.version` and `process.versions.node` (i.e. Jose@4)
+  // TODO: Remove when https://github.com/unjs/unenv/pull/493 is merged
+  Object.assign(process, { version: process.version || "v22.14.0" });
+  // @ts-expect-error Node type does not match workerd
+  Object.assign(process.versions, { node: "22.14.0", ...process.versions });
+
+  globalThis.__dirname ??= "";
+  globalThis.__filename ??= "";
+
+  // Do not crash on cache not supported
+  // https://github.com/cloudflare/workerd/pull/2434
+  // compatibility flag "cache_option_enabled" -> does not support "force-cache"
+  const __original_fetch = globalThis.fetch;
+
+  globalThis.fetch = (input, init) => {
+    if (init) {
+      delete (init as { cache: unknown }).cache;
+    }
+    return __original_fetch(input, init);
+  };
+
+  const CustomRequest = class extends globalThis.Request {
+    constructor(input: RequestInfo | URL, init?: RequestInit) {
+      if (init) {
+        delete (init as { cache: unknown }).cache;
+        // https://github.com/cloudflare/workerd/issues/2746
+        // https://github.com/cloudflare/workerd/issues/3245
+        Object.defineProperty(init, "body", {
+          // @ts-ignore
+          value: init.body instanceof stream.Readable ? ReadableStream.from(init.body) : init.body,
+        });
+      }
+      super(input, init);
+    }
+  };
+
+  Object.assign(globalThis, {
+    Request: CustomRequest,
+    //@ts-expect-error Inline at build time by ESBuild
+    __BUILD_TIMESTAMP_MS__: __BUILD_TIMESTAMP_MS__,
+  });
+}
+
+/**
+ * Populate process.env with:
+ * - the environment variables and secrets from the cloudflare platform
+ * - the variables from Next .env* files
+ * - the origin resolver information
+ */
+function populateProcessEnv(url: URL, env: CloudflareEnv) {
+  for (const [key, value] of Object.entries(env)) {
+    if (typeof value === "string") {
+      process.env[key] = value;
+    }
+  }
+
+  const mode = env.NEXTJS_ENV ?? "production";
+  if (nextEnvVars[mode]) {
+    for (const key in nextEnvVars[mode]) {
+      process.env[key] ??= nextEnvVars[mode][key];
+    }
+  }
+
+  // Set the default Origin for the origin resolver.
+  // This is only needed for an external middleware bundle
+  process.env.OPEN_NEXT_ORIGIN = JSON.stringify({
+    default: {
+      host: url.hostname,
+      protocol: url.protocol.slice(0, -1),
+      port: url.port,
+    },
+  });
+}
diff --git a/packages/cloudflare/src/cli/templates/worker.ts b/packages/cloudflare/src/cli/templates/worker.ts
index eb49fb62..f265c289 100644
--- a/packages/cloudflare/src/cli/templates/worker.ts
+++ b/packages/cloudflare/src/cli/templates/worker.ts
@@ -1,34 +1,16 @@
-import { AsyncLocalStorage } from "node:async_hooks";
-import process from "node:process";
-
-import type { CloudflareContext } from "../../api";
-// @ts-expect-error: resolved by wrangler build
-import * as nextEnvVars from "./env/next-env.mjs";
-
-const cloudflareContextALS = new AsyncLocalStorage<CloudflareContext>();
-
-// Note: this symbol needs to be kept in sync with `src/api/get-cloudflare-context.ts`
-Object.defineProperty(globalThis, Symbol.for("__cloudflare-context__"), {
-  get() {
-    return cloudflareContextALS.getStore();
-  },
-});
+//@ts-expect-error: Will be resolved by wrangler build
+import { runWithCloudflareRequestContext } from "./cloudflare/init.js";
 
 //@ts-expect-error: Will be resolved by wrangler build
 export { DOQueueHandler } from "./.build/durable-objects/queue.js";
 //@ts-expect-error: Will be resolved by wrangler build
 export { DOShardedTagCache } from "./.build/durable-objects/sharded-tag-cache.js";
 
-// Populate process.env on the first request
-let processEnvPopulated = false;
-
 export default {
   async fetch(request, env, ctx) {
-    return cloudflareContextALS.run({ env, ctx, cf: request.cf }, async () => {
+    return runWithCloudflareRequestContext(request, env, ctx, async () => {
       const url = new URL(request.url);
 
-      populateProcessEnv(url, env);
-
       // Serve images in development.
       // Note: "/cdn-cgi/image/..." requests do not reach production workers.
       if (url.pathname.startsWith("/cdn-cgi/image/")) {
@@ -57,45 +39,3 @@ export default {
     });
   },
 } as ExportedHandler<CloudflareEnv>;
-
-/**
- * Populate process.env with:
- * - the environment variables and secrets from the cloudflare platform
- * - the variables from Next .env* files
- * - the origin resolver information
- */
-function populateProcessEnv(url: URL, env: CloudflareEnv) {
-  if (processEnvPopulated) {
-    return;
-  }
-
-  // Some packages rely on `process.version` and `process.versions.node` (i.e. Jose@4)
-  // TODO: Remove when https://github.com/unjs/unenv/pull/493 is merged
-  Object.assign(process, { version: process.version || "v22.14.0" });
-  // @ts-expect-error Node type does not match workerd
-  Object.assign(process.versions, { node: "22.14.0", ...process.versions });
-
-  processEnvPopulated = true;
-
-  for (const [key, value] of Object.entries(env)) {
-    if (typeof value === "string") {
-      process.env[key] = value;
-    }
-  }
-
-  const mode = env.NEXTJS_ENV ?? "production";
-  if (nextEnvVars[mode]) {
-    for (const key in nextEnvVars[mode]) {
-      process.env[key] ??= nextEnvVars[mode][key];
-    }
-  }
-
-  // Set the default Origin for the origin resolver.
-  process.env.OPEN_NEXT_ORIGIN = JSON.stringify({
-    default: {
-      host: url.hostname,
-      protocol: url.protocol.slice(0, -1),
-      port: url.port,
-    },
-  });
-}