diff --git a/src/index.ts b/src/index.ts
index abc4e16..078de67 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -3,6 +3,7 @@ import { useEffect, useMemo, useRef, useState } from "react";
 type Serializer<T> = (object: T | undefined) => string;
 type Parser<T> = (val: string) => T | undefined;
 type Setter<T> = React.Dispatch<React.SetStateAction<T | undefined>>;
+type DefaultValue<T> = T | (() => T)
 
 type Options<T> = Partial<{
   serializer: Serializer<T>;
@@ -13,12 +14,12 @@ type Options<T> = Partial<{
 
 function useLocalStorage<T>(
   key: string,
-  defaultValue: T,
+  defaultValue: DefaultValue<T>,
   options?: Options<T>
 ): [T, Setter<T>];
 function useLocalStorage<T>(
   key: string,
-  defaultValue?: T,
+  defaultValue?: DefaultValue<T>,
   options?: Options<T>
 ) {
   const opts = useMemo(() => {
@@ -36,17 +37,18 @@ function useLocalStorage<T>(
   const rawValueRef = useRef<string | null>(null);
 
   const [value, setValue] = useState(() => {
-    if (typeof window === "undefined") return defaultValue;
+    const newValue = defaultValue instanceof Function ? defaultValue() : defaultValue
+    if (typeof window === "undefined") return newValue;
 
     try {
       rawValueRef.current = window.localStorage.getItem(key);
       const res: T = rawValueRef.current
         ? parser(rawValueRef.current)
-        : defaultValue;
+        : newValue;
       return res;
     } catch (e) {
       logger(e);
-      return defaultValue;
+      return newValue;
     }
   });
 
diff --git a/test/useLocalStorage.test.tsx b/test/useLocalStorage.test.tsx
index 6d74889..d81b9b8 100644
--- a/test/useLocalStorage.test.tsx
+++ b/test/useLocalStorage.test.tsx
@@ -36,6 +36,11 @@ export function TestComponent() {
   );
 }
 
+function WithLazyInitialState({ text }: { text: string }) {
+  const [data] = useLocalStorage("username", () => text);
+  return <p>{data}</p>;
+}
+
 function WithCustomParser() {
   const [data] = useLocalStorage("username", "John Doe", {
     parser: (val) => JSON.parse(val) + "kraw",
@@ -174,6 +179,10 @@ describe("useLocalStorage", () => {
       JSON.stringify("foobarbarbarbar")
     );
   });
+  it("uses a lazy initial state", () => {
+    const { container } = render(<WithLazyInitialState text="johndoe85kraw" />);
+    expect(container.querySelector("p")).toHaveTextContent("johndoe85kraw");
+  });
   it("uses a custom parser", () => {
     localStorage.setItem("username", JSON.stringify("johndoe85"));
     const { container } = render(<WithCustomParser />);