diff --git a/packages/schematics/angular/interceptor/files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template b/packages/schematics/angular/interceptor/class-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template
similarity index 100%
rename from packages/schematics/angular/interceptor/files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template
rename to packages/schematics/angular/interceptor/class-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template
diff --git a/packages/schematics/angular/interceptor/files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template b/packages/schematics/angular/interceptor/class-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template
similarity index 100%
rename from packages/schematics/angular/interceptor/files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template
rename to packages/schematics/angular/interceptor/class-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template
diff --git a/packages/schematics/angular/interceptor/functional-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template b/packages/schematics/angular/interceptor/functional-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template
new file mode 100755
index 0000000000..270759cc76
--- /dev/null
+++ b/packages/schematics/angular/interceptor/functional-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.spec.ts.template
@@ -0,0 +1,16 @@
+import { TestBed } from '@angular/core/testing';
+
+import { <%= camelize(name) %>Interceptor } from './<%= dasherize(name) %>.interceptor';
+
+describe('<%= camelize(name) %>Interceptor', () => {
+  const interceptor: HttpInterceptorFn = (req, next) => 
+    TestBed.runInInjectionContext(() => <%= camelize(name) %>Interceptor(req, next));
+
+  beforeEach(() => {
+    TestBed.configureTestingModule({});
+  });
+
+  it('should be created', () => {
+    expect(interceptor).toBeTruthy();
+  });
+});
diff --git a/packages/schematics/angular/interceptor/functional-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template b/packages/schematics/angular/interceptor/functional-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template
new file mode 100755
index 0000000000..a7759ca3a1
--- /dev/null
+++ b/packages/schematics/angular/interceptor/functional-files/__name@dasherize@if-flat__/__name@dasherize__.interceptor.ts.template
@@ -0,0 +1,5 @@
+import { HttpInterceptorFn } from '@angular/common/http';
+
+export const <%= camelize(name) %>Interceptor: HttpInterceptorFn = (req, next) => {
+  return next(req);
+}
diff --git a/packages/schematics/angular/interceptor/index.ts b/packages/schematics/angular/interceptor/index.ts
index 11bbe8bf10..990721b90d 100755
--- a/packages/schematics/angular/interceptor/index.ts
+++ b/packages/schematics/angular/interceptor/index.ts
@@ -14,8 +14,17 @@ export default function (options: InterceptorOptions): Rule {
   // This schematic uses an older method to implement the flat option
   const flat = options.flat;
   options.flat = true;
-
-  return generateFromFiles(options, {
+  const extraTemplateValues = {
     'if-flat': (s: string) => (flat ? '' : s),
-  });
+  };
+
+  return options.functional
+    ? generateFromFiles(
+        { ...options, templateFilesDirectory: './functional-files' },
+        extraTemplateValues,
+      )
+    : generateFromFiles(
+        { ...options, templateFilesDirectory: './class-files' },
+        extraTemplateValues,
+      );
 }
diff --git a/packages/schematics/angular/interceptor/index_spec.ts b/packages/schematics/angular/interceptor/index_spec.ts
index 8b540a7ecb..b1237a9c83 100755
--- a/packages/schematics/angular/interceptor/index_spec.ts
+++ b/packages/schematics/angular/interceptor/index_spec.ts
@@ -74,4 +74,23 @@ describe('Interceptor Schematic', () => {
       .toPromise();
     expect(appTree.files).toContain('/projects/bar/custom/app/foo/foo.interceptor.ts');
   });
+
+  it('should create a functional interceptor', async () => {
+    const tree = await schematicRunner
+      .runSchematicAsync('interceptor', { ...defaultOptions, functional: true }, appTree)
+      .toPromise();
+    const fileString = tree.readContent('/projects/bar/src/app/foo/foo.interceptor.ts');
+    expect(fileString).toContain(
+      'export const fooInterceptor: HttpInterceptorFn = (req, next) => {',
+    );
+  });
+
+  it('should create a helper function to run a functional interceptor in a test', async () => {
+    const tree = await schematicRunner
+      .runSchematicAsync('interceptor', { ...defaultOptions, functional: true }, appTree)
+      .toPromise();
+    const fileString = tree.readContent('/projects/bar/src/app/foo/foo.interceptor.spec.ts');
+    expect(fileString).toContain('const interceptor: HttpInterceptorFn = (req, next) => ');
+    expect(fileString).toContain('TestBed.runInInjectionContext(() => fooInterceptor(req, next));');
+  });
 });
diff --git a/packages/schematics/angular/interceptor/schema.json b/packages/schematics/angular/interceptor/schema.json
index d8be903359..6d344b05b1 100755
--- a/packages/schematics/angular/interceptor/schema.json
+++ b/packages/schematics/angular/interceptor/schema.json
@@ -40,6 +40,11 @@
       "type": "boolean",
       "description": "Do not create \"spec.ts\" test files for the new interceptor.",
       "default": false
+    },
+    "functional": {
+      "type": "boolean",
+      "description": "Creates the interceptor as a `HttpInterceptorFn`.",
+      "default": false
     }
   },
   "required": ["name", "project"]