diff --git a/homeassistant/components/discovery.py b/homeassistant/components/discovery.py
index 5d8102e3056..f87395520bb 100644
--- a/homeassistant/components/discovery.py
+++ b/homeassistant/components/discovery.py
@@ -21,7 +21,7 @@ from homeassistant.helpers.event import async_track_point_in_utc_time
 from homeassistant.helpers.discovery import async_load_platform, async_discover
 import homeassistant.util.dt as dt_util
 
-REQUIREMENTS = ['netdisco==2.2.0']
+REQUIREMENTS = ['netdisco==2.3.0']
 
 DOMAIN = 'discovery'
 
@@ -51,6 +51,7 @@ SERVICE_DLNA_DMR = 'dlna_dmr'
 CONFIG_ENTRY_HANDLERS = {
     SERVICE_DAIKIN: 'daikin',
     SERVICE_DECONZ: 'deconz',
+    'esphome': 'esphome',
     'google_cast': 'cast',
     SERVICE_HUE: 'hue',
     SERVICE_TELLDUSLIVE: 'tellduslive',
diff --git a/homeassistant/components/esphome/config_flow.py b/homeassistant/components/esphome/config_flow.py
index d6abf03cf5d..1f71d8d66b5 100644
--- a/homeassistant/components/esphome/config_flow.py
+++ b/homeassistant/components/esphome/config_flow.py
@@ -53,6 +53,24 @@ class EsphomeFlowHandler(config_entries.ConfigFlow):
             errors=errors
         )
 
+    async def async_step_discovery(self, user_input: ConfigType):
+        """Handle discovery."""
+        # mDNS hostname has additional '.' at end
+        hostname = user_input['hostname'][:-1]
+        hosts = (hostname, user_input['host'])
+        for entry in self._async_current_entries():
+            if entry.data['host'] in hosts:
+                return self.async_abort(
+                    reason='already_configured'
+                )
+
+        # Prefer .local addresses (mDNS is available after all, otherwise
+        # we wouldn't have received the discovery message)
+        return await self.async_step_user(user_input={
+            'host': hostname,
+            'port': user_input['port'],
+        })
+
     def _async_get_entry(self):
         return self.async_create_entry(
             title=self._name,
diff --git a/requirements_all.txt b/requirements_all.txt
index 6a0eb4db397..fc8240c263b 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -705,7 +705,7 @@ nessclient==0.9.9
 netdata==0.1.2
 
 # homeassistant.components.discovery
-netdisco==2.2.0
+netdisco==2.3.0
 
 # homeassistant.components.sensor.neurio_energy
 neurio==0.3.1
diff --git a/tests/components/esphome/test_config_flow.py b/tests/components/esphome/test_config_flow.py
index 07398dce8be..1291aa53123 100644
--- a/tests/components/esphome/test_config_flow.py
+++ b/tests/components/esphome/test_config_flow.py
@@ -1,11 +1,11 @@
 """Test config flow."""
 from collections import namedtuple
-from unittest.mock import patch, MagicMock
+from unittest.mock import MagicMock, patch
 
 import pytest
 
 from homeassistant.components.esphome import config_flow
-from tests.common import mock_coro
+from tests.common import mock_coro, MockConfigEntry
 
 MockDeviceInfo = namedtuple("DeviceInfo", ["uses_password", "name"])
 
@@ -186,3 +186,64 @@ async def test_user_invalid_password(hass, mock_api_connection_error,
     assert result['errors'] == {
         'base': 'invalid_password'
     }
+
+
+async def test_discovery_initiation(hass, mock_client):
+    """Test discovery importing works."""
+    flow = config_flow.EsphomeFlowHandler()
+    flow.hass = hass
+    service_info = {
+        'host': '192.168.43.183',
+        'port': 6053,
+        'hostname': 'test8266.local.',
+        'properties': {}
+    }
+
+    mock_client.device_info.return_value = mock_coro(
+        MockDeviceInfo(False, "test8266"))
+
+    result = await flow.async_step_discovery(user_input=service_info)
+    assert result['type'] == 'create_entry'
+    assert result['title'] == 'test8266'
+    assert result['data']['host'] == 'test8266.local'
+    assert result['data']['port'] == 6053
+
+
+async def test_discovery_already_configured_hostname(hass, mock_client):
+    """Test discovery aborts if already configured via hostname."""
+    MockConfigEntry(
+        domain='esphome',
+        data={'host': 'test8266.local', 'port': 6053, 'password': ''}
+    ).add_to_hass(hass)
+
+    flow = config_flow.EsphomeFlowHandler()
+    flow.hass = hass
+    service_info = {
+        'host': '192.168.43.183',
+        'port': 6053,
+        'hostname': 'test8266.local.',
+        'properties': {}
+    }
+    result = await flow.async_step_discovery(user_input=service_info)
+    assert result['type'] == 'abort'
+    assert result['reason'] == 'already_configured'
+
+
+async def test_discovery_already_configured_ip(hass, mock_client):
+    """Test discovery aborts if already configured via static IP."""
+    MockConfigEntry(
+        domain='esphome',
+        data={'host': '192.168.43.183', 'port': 6053, 'password': ''}
+    ).add_to_hass(hass)
+
+    flow = config_flow.EsphomeFlowHandler()
+    flow.hass = hass
+    service_info = {
+        'host': '192.168.43.183',
+        'port': 6053,
+        'hostname': 'test8266.local.',
+        'properties': {}
+    }
+    result = await flow.async_step_discovery(user_input=service_info)
+    assert result['type'] == 'abort'
+    assert result['reason'] == 'already_configured'