diff --git a/CHANGELOG.md b/CHANGELOG.md
index 5036a633875..8ee73d84e36 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,7 @@
 ## Next release
 (Add entries here in the order of: server, console, cli, docs, others)
 
+- server: `use_prepared_statements` option (default: False) in `add_pg_source` metadata API
 - server: add a comment field for actions (#231)
 - console: add a comment field for actions (#231)
 
diff --git a/server/src-exec/Main.hs b/server/src-exec/Main.hs
index 3bd9f16f4c4..a2864423a03 100644
--- a/server/src-exec/Main.hs
+++ b/server/src-exec/Main.hs
@@ -135,6 +135,7 @@ runApp env (HGEOptionsG rci metadataDbUrl hgeCmd) = do
       let defaultSourceConfig = maybeDefaultPgConnInfo <&> \(dbUrlConf, _) ->
             let pgSourceConnInfo = PostgresSourceConnInfo dbUrlConf
                                    (Just setPostgresPoolSettings{_ppsRetries = maybeRetries <|> Just 1})
+                                   False
             in PostgresConnConfiguration pgSourceConnInfo Nothing
       res <- runTxWithMinimalPool _gcMetadataDbConnInfo $ downgradeCatalog defaultSourceConfig opts initTime
       either (printErrJExit DowngradeProcessError) (liftIO . print) res
diff --git a/server/src-lib/Hasura/App.hs b/server/src-lib/Hasura/App.hs
index 26a841eb23a..a6d0a198114 100644
--- a/server/src-lib/Hasura/App.hs
+++ b/server/src-lib/Hasura/App.hs
@@ -278,7 +278,7 @@ initialiseServeCtx env GlobalCtx{..} so@ServeOptions{..} = do
                            , _ppsIdleTimeout    = Just $ Q.cpIdleTime soConnParams
                            , _ppsRetries        = snd _gcDefaultPostgresConnInfo <|> Just 1
                            }
-            sourceConnInfo = PostgresSourceConnInfo dbUrlConf (Just connSettings)
+            sourceConnInfo = PostgresSourceConnInfo dbUrlConf (Just connSettings) $ Q.cpAllowPrepare soConnParams
         in PostgresConnConfiguration sourceConnInfo Nothing
       sqlGenCtx = SQLGenCtx soStringifyNum
 
diff --git a/server/src-lib/Hasura/Backends/Postgres/Connection.hs b/server/src-lib/Hasura/Backends/Postgres/Connection.hs
index b55d435433b..f6956c0a2ad 100644
--- a/server/src-lib/Hasura/Backends/Postgres/Connection.hs
+++ b/server/src-lib/Hasura/Backends/Postgres/Connection.hs
@@ -349,8 +349,9 @@ getDefaultPGPoolSettingIfNotExists connSettings defaultPgPoolSettings =
 
 data PostgresSourceConnInfo
   = PostgresSourceConnInfo
-  { _psciDatabaseUrl  :: !UrlConf
-  , _psciPoolSettings :: !(Maybe PostgresPoolSettings)
+  { _psciDatabaseUrl           :: !UrlConf
+  , _psciPoolSettings          :: !(Maybe PostgresPoolSettings)
+  , _psciUsePreparedStatements :: !Bool
   } deriving (Show, Eq, Generic)
 instance Cacheable PostgresSourceConnInfo
 instance Hashable PostgresSourceConnInfo
@@ -362,6 +363,7 @@ instance FromJSON PostgresSourceConnInfo where
     PostgresSourceConnInfo
       <$> o .: "database_url"
       <*> o .:? "pool_settings"
+      <*> o .:? "use_prepared_statements" .!= False -- By default preparing statements is OFF for postgres source
 
 instance Arbitrary PostgresSourceConnInfo where
   arbitrary = genericArbitrary
diff --git a/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Dependencies.hs b/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Dependencies.hs
index 2f9cedd2ab4..6c04eccbe8a 100644
--- a/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Dependencies.hs
+++ b/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Dependencies.hs
@@ -81,7 +81,7 @@ pruneDanglingDependents
 pruneDanglingDependents cache = fmap (M.filter (not . null)) . traverse do
   partitionEithers . map \(metadataObject, dependency) -> case resolveDependency dependency of
     Right ()          -> Right (metadataObject, dependency)
-    Left errorMessage -> Left (InconsistentObject errorMessage metadataObject)
+    Left errorMessage -> Left (InconsistentObject errorMessage Nothing metadataObject)
   where
     resolveDependency :: SchemaDependency -> Either Text ()
     resolveDependency (SchemaDependency objectId _) = case objectId of
diff --git a/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Fields.hs b/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Fields.hs
index a2c2e11fb06..e3eb03d837e 100644
--- a/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Fields.hs
+++ b/server/src-lib/Hasura/RQL/DDL/Schema/Cache/Fields.hs
@@ -122,7 +122,7 @@ addNonColumnFields = proc ( source
       This columnInfo -> returnA -< FIColumn columnInfo
       That (fieldInfo, _) -> returnA -< fieldInfo
       These columnInfo (_, fieldMetadata) -> do
-        recordInconsistency -< (fieldMetadata, "field definition conflicts with postgres column")
+        recordInconsistency -< ((Nothing, fieldMetadata), "field definition conflicts with postgres column")
         returnA -< FIColumn columnInfo
 
 mkRelationshipMetadataObject
diff --git a/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs b/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs
index 341e3127482..fd9534c41d2 100644
--- a/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs
+++ b/server/src-lib/Hasura/RQL/DDL/Schema/Source.hs
@@ -23,13 +23,14 @@ import           Hasura.RQL.Types
 mkPgSourceResolver :: Q.PGLogger -> SourceResolver
 mkPgSourceResolver pgLogger _ config = runExceptT do
   env <- lift Env.getEnvironment
-  let PostgresSourceConnInfo urlConf connSettings = _pccConnectionInfo config
+  let PostgresSourceConnInfo urlConf connSettings allowPrepare = _pccConnectionInfo config
   -- If the user does not provide values for the pool settings, then use the default values
   let (maxConns, idleTimeout, retries) = getDefaultPGPoolSettingIfNotExists connSettings defaultPostgresPoolSettings
   urlText <- resolveUrlConf env urlConf
   let connInfo = Q.ConnInfo retries $ Q.CDDatabaseURI $ txtToBs urlText
       connParams = Q.defaultConnParams{ Q.cpIdleTime = idleTimeout
                                       , Q.cpConns = maxConns
+                                      , Q.cpAllowPrepare = allowPrepare
                                       }
   pgPool <- liftIO $ Q.initPGPool connInfo connParams pgLogger
   let pgExecCtx = mkPGExecCtx Q.ReadCommitted pgPool
diff --git a/server/src-lib/Hasura/RQL/Types/Metadata/Object.hs b/server/src-lib/Hasura/RQL/Types/Metadata/Object.hs
index ad02dcf4721..704bb88b0e1 100644
--- a/server/src-lib/Hasura/RQL/Types/Metadata/Object.hs
+++ b/server/src-lib/Hasura/RQL/Types/Metadata/Object.hs
@@ -154,7 +154,7 @@ data MetadataObject
 $(makeLenses ''MetadataObject)
 
 data InconsistentMetadata
-  = InconsistentObject !Text !MetadataObject
+  = InconsistentObject !Text !(Maybe Value) !MetadataObject
   | ConflictingObjects !Text ![MetadataObject]
   | DuplicateObjects !MetadataObjId ![Value]
   | DuplicateRestVariables !Text !MetadataObject
@@ -165,20 +165,20 @@ $(makePrisms ''InconsistentMetadata)
 
 getInconsistentRemoteSchemas :: [InconsistentMetadata] -> [RemoteSchemaName]
 getInconsistentRemoteSchemas =
-  toListOf (traverse._InconsistentObject._2.moId._MORemoteSchema)
+  toListOf (traverse._InconsistentObject._3.moId._MORemoteSchema)
 
 imObjectIds :: InconsistentMetadata -> [MetadataObjId]
 imObjectIds = \case
-  InconsistentObject _ metadata  -> [_moId metadata]
-  ConflictingObjects _ metadatas -> map _moId metadatas
-  DuplicateObjects objectId _    -> [objectId]
-  DuplicateRestVariables _ md    -> [_moId md]
-  InvalidRestSegments _ md       -> [_moId md]
-  AmbiguousRestEndpoints _ mds   -> take 1 $ map _moId mds -- TODO: Take 1 is a workaround to ensure that conflicts are not reported multiple times per endpoint.
+  InconsistentObject _ _ metadata -> [_moId metadata]
+  ConflictingObjects _ metadatas  -> map _moId metadatas
+  DuplicateObjects objectId _     -> [objectId]
+  DuplicateRestVariables _ md     -> [_moId md]
+  InvalidRestSegments _ md        -> [_moId md]
+  AmbiguousRestEndpoints _ mds    -> take 1 $ map _moId mds -- TODO: Take 1 is a workaround to ensure that conflicts are not reported multiple times per endpoint.
 
 imReason :: InconsistentMetadata -> Text
 imReason = \case
-  InconsistentObject reason _     -> reason
+  InconsistentObject reason _ _   -> reason
   ConflictingObjects reason _     -> reason
   DuplicateObjects objectId _     -> "multiple definitions for " <> moiName objectId
   DuplicateRestVariables reason _ -> reason
@@ -197,17 +197,18 @@ instance ToJSON InconsistentMetadata where
   toJSON inconsistentMetadata = object (("reason" .= imReason inconsistentMetadata) : extraFields)
     where
       extraFields = case inconsistentMetadata of
-        InconsistentObject _ metadata -> metadataObjectFields metadata
+        InconsistentObject _ internal metadata -> metadataObjectFields internal metadata
         ConflictingObjects _ metadatas ->
-          [ "objects" .= map (object . metadataObjectFields) metadatas ]
+          [ "objects" .= map (object . metadataObjectFields Nothing) metadatas ]
         DuplicateObjects objectId definitions ->
           [ "type" .= String (moiTypeName objectId)
           , "definitions" .= definitions ]
 
-        DuplicateRestVariables _ md  -> metadataObjectFields md
-        InvalidRestSegments _ md     -> metadataObjectFields md
+        DuplicateRestVariables _ md  -> metadataObjectFields Nothing md
+        InvalidRestSegments _ md     -> metadataObjectFields Nothing md
         AmbiguousRestEndpoints _ mds -> [ "conflicts" .= map _moDefinition mds ]
 
-      metadataObjectFields (MetadataObject objectId definition) =
+      metadataObjectFields (maybeInternal :: Maybe Value) (MetadataObject objectId definition) =
         [ "type" .= String (moiTypeName objectId)
         , "definition" .= definition ]
+        <> maybe [] (\internal -> ["internal" .= internal]) maybeInternal
diff --git a/server/src-lib/Hasura/RQL/Types/SchemaCache/Build.hs b/server/src-lib/Hasura/RQL/Types/SchemaCache/Build.hs
index f6e0ce85525..46e1ff6420c 100644
--- a/server/src-lib/Hasura/RQL/Types/SchemaCache/Build.hs
+++ b/server/src-lib/Hasura/RQL/Types/SchemaCache/Build.hs
@@ -35,7 +35,7 @@ import           Control.Lens
 import           Control.Monad.Morph
 import           Control.Monad.Trans.Control         (MonadBaseControl)
 import           Control.Monad.Unique
-import           Data.Aeson                          (toJSON)
+import           Data.Aeson                          (Value, toJSON)
 import           Data.Aeson.TH
 import           Data.List                           (nub)
 import           Data.Text.Extended
@@ -83,13 +83,17 @@ partitionCollectedInfo =
       in (inconsistencies, dependency:dependencies)
 
 recordInconsistency
-  :: (ArrowWriter (Seq w) arr, AsInconsistentMetadata w) => (MetadataObject, Text) `arr` ()
-recordInconsistency = first (arr (:[])) >>> recordInconsistencies
+  :: (ArrowWriter (Seq w) arr, AsInconsistentMetadata w) => ((Maybe Value, MetadataObject), Text) `arr` ()
+recordInconsistency = first (arr (:[])) >>> recordInconsistencies'
 
 recordInconsistencies
   :: (ArrowWriter (Seq w) arr, AsInconsistentMetadata w) => ([MetadataObject], Text) `arr` ()
-recordInconsistencies = proc (metadataObjects, reason) ->
-  tellA -< Seq.fromList $ map (review _InconsistentMetadata . InconsistentObject reason) metadataObjects
+recordInconsistencies = first (arr (map (Nothing,))) >>> recordInconsistencies'
+
+recordInconsistencies'
+  :: (ArrowWriter (Seq w) arr, AsInconsistentMetadata w) => ([(Maybe Value, MetadataObject)], Text) `arr` ()
+recordInconsistencies' = proc (metadataObjects, reason) ->
+  tellA -< Seq.fromList $ map (review _InconsistentMetadata . uncurry (InconsistentObject reason)) metadataObjects
 
 recordDependencies
   :: (ArrowWriter (Seq CollectedInfo) arr)
@@ -105,7 +109,7 @@ withRecordInconsistency f = proc (e, (metadataObject, s)) -> do
   result <- runErrorA f -< (e, s)
   case result of
     Left err -> do
-      recordInconsistency -< (metadataObject, qeError err)
+      recordInconsistency -< ((qeInternal err, metadataObject), qeError err)
       returnA -< Nothing
     Right v -> returnA -< Just v
 {-# INLINABLE withRecordInconsistency #-}