In a medium saucepan, combine 1 cup of water, 1/2 cup of butter, and 1/4 teaspoon of salt. Bring the mixture to a boil over medium heat, stirring often to prevent burning.
Once boiling, remove from heat and add 1 1/4 cups of all-purpose flour all at once. Stir vigorously with a wooden spoon until the dough forms a ball and pulls away from the sides of the pan.
Allow the dough to cool for about 5 minutes. When slightly warm, add 4 large eggs one at a time, mixing well after each addition until dough is smooth and glossy.
Preheat oven to 400°F (200°C). Line a baking sheet with parchment paper. Transfer dough to a piping bag fitted with a large round tip.
Pipe small mounds about 1.5 inches in diameter onto the baking sheet, spacing them apart.
Bake for 20-25 minutes until golden brown and puffed. Do not open oven door during baking. Remove and cool on wire rack.
Prepare lemon filling by whisking 3.4 oz instant lemon pudding with 1 cup milk until smooth.
In a separate bowl, whip 1 1/2 cups heavy cream with 2 tablespoons sugar and 1 teaspoon vanilla extract until soft peaks form.
Gently fold whipped cream into lemon pudding mixture. Add zest of 1 lemon and combine well.
Once cream puffs are completely cool, make a small slit in the side of each puff with a sharp knife.
Fill a piping bag with lemon filling and pipe into each puff until generously filled.
Dust filled cream puffs with powdered sugar. Serve immediately or refrigerate until ready to serve.