diff --git a/panel/param.py b/panel/param.py
index 4129a18ef8..a180b5dade 100644
--- a/panel/param.py
+++ b/panel/param.py
@@ -775,7 +775,8 @@ def __init__(self, object=None, **params):
         self._link_object_params()
         if object is not None:
             self._validate_object()
-            self._replace_pane()
+            if not self.defer_load:
+                self._replace_pane()
 
     @param.depends('object', watch=True)
     def _validate_object(self):
diff --git a/panel/tests/conftest.py b/panel/tests/conftest.py
index a20da0c56a..da56bca0e7 100644
--- a/panel/tests/conftest.py
+++ b/panel/tests/conftest.py
@@ -312,6 +312,7 @@ def server_cleanup():
         state._locations.clear()
         state._templates.clear()
         state._views.clear()
+        state._loaded.clear()
         state.cache.clear()
         state._scheduled.clear()
         if state._thread_pool is not None:
diff --git a/panel/tests/test_param.py b/panel/tests/test_param.py
index 171c7e65cf..a3479fa80e 100644
--- a/panel/tests/test_param.py
+++ b/panel/tests/test_param.py
@@ -10,9 +10,10 @@
     TextInput as BkTextInput, Toggle,
 )
 
+from panel.io.state import set_curdoc, state
 from panel.layout import Row, Tabs
 from panel.pane import (
-    HTML, Bokeh, Matplotlib, Pane, PaneBase, panel,
+    HTML, Bokeh, Matplotlib, Pane, PaneBase, Str, panel,
 )
 from panel.param import (
     JSONInit, Param, ParamFunction, ParamMethod,
@@ -1055,6 +1056,42 @@ def view(a):
     assert inner_pane._models == {}
 
 
+def test_param_function_pane_defer_load(document, comm):
+    test = View()
+
+    @param.depends(test.param.a)
+    def view(a):
+        return Div(text='%d' % a)
+
+    pane = panel(view, defer_load=True)
+    inner_pane = pane._pane
+    assert isinstance(inner_pane, Str)
+
+    # Ensure pane thinks page is not loaded
+    state._loaded[document] = False
+
+    # Create pane
+    with set_curdoc(document):
+        row = pane.get_root(document, comm=comm)
+    assert isinstance(row, BkRow)
+    assert len(row.children) == 1
+    model = row.children[0]
+    assert pane._models[row.ref['id']][0] is row
+    assert isinstance(model, Div)
+    assert model.text == '<pre> </pre>'
+
+    # Test on_load
+    state._on_load(document)
+    model = row.children[0]
+    assert isinstance(model, Div)
+    assert model.text == '0'
+
+    # Cleanup pane
+    pane._cleanup(row)
+    assert pane._models == {}
+    assert inner_pane._models == {}
+
+
 def test_param_function_pane_update(document, comm):
     test = View()
 
diff --git a/panel/tests/ui/test_param.py b/panel/tests/ui/test_param.py
new file mode 100644
index 0000000000..f6548f0ead
--- /dev/null
+++ b/panel/tests/ui/test_param.py
@@ -0,0 +1,29 @@
+import time
+
+import pytest
+
+pytestmark = pytest.mark.ui
+
+from panel.io.server import serve
+from panel.pane import panel
+
+
+def test_param_defer_load(page, port):
+    def defer_load():
+        time.sleep(0.5)
+        return 'I render after load!'
+
+    component = panel(defer_load, defer_load=True)
+
+    serve(component, port=port, threaded=True, show=False)
+
+    time.sleep(0.2)
+
+    page.goto(f"http://localhost:{port}")
+
+    assert page.locator(".bk.pn-loading")
+    assert page.locator('.bk.markdown').count() == 0
+
+    time.sleep(0.5)
+
+    assert page.text_content('.bk.markdown') == 'I render after load!'