diff --git a/src/testRunner/unittests/tsbuild/moduleResolution.ts b/src/testRunner/unittests/tsbuild/moduleResolution.ts
index 11403bdc18fdd..487f83196c36e 100644
--- a/src/testRunner/unittests/tsbuild/moduleResolution.ts
+++ b/src/testRunner/unittests/tsbuild/moduleResolution.ts
@@ -65,5 +65,25 @@ namespace ts.tscWatch {
             commandLineArgs: ["-b", "packages/pkg1", "--verbose", "--traceResolution"],
             changes: emptyArray
         });
+
+        verifyTsc({
+            scenario: "moduleResolution",
+            subScenario: `type reference resolution uses correct options for different resolution options referenced project`,
+            fs: () => loadProjectFromFiles({
+                "/src/packages/pkg1_index.ts": `export const theNum: TheNum = "type1";`,
+                "/src/packages/pkg1.tsconfig.json": JSON.stringify({
+                    compilerOptions: { composite: true, typeRoots: ["./typeroot1"] },
+                    files: ["./pkg1_index.ts"]
+                }),
+                "/src/packages/typeroot1/sometype/index.d.ts": Utils.dedent`declare type TheNum = "type1";`,
+                "/src/packages/pkg2_index.ts": `export const theNum: TheNum2 = "type2";`,
+                "/src/packages/pkg2.tsconfig.json": JSON.stringify({
+                    compilerOptions: { composite: true, typeRoots: ["./typeroot2"] },
+                    files: ["./pkg2_index.ts"]
+                }),
+                "/src/packages/typeroot2/sometype/index.d.ts": Utils.dedent`declare type TheNum2 = "type2";`,
+            }),
+            commandLineArgs: ["-b", "/src/packages/pkg1.tsconfig.json", "/src/packages/pkg2.tsconfig.json", "--verbose", "--traceResolution"],
+        });
     });
 }
diff --git a/tests/baselines/reference/tsbuild/moduleResolution/initial-build/type-reference-resolution-uses-correct-options-for-different-resolution-options-referenced-project.js b/tests/baselines/reference/tsbuild/moduleResolution/initial-build/type-reference-resolution-uses-correct-options-for-different-resolution-options-referenced-project.js
new file mode 100644
index 0000000000000..d45fadacea080
--- /dev/null
+++ b/tests/baselines/reference/tsbuild/moduleResolution/initial-build/type-reference-resolution-uses-correct-options-for-different-resolution-options-referenced-project.js
@@ -0,0 +1,173 @@
+Input::
+//// [/lib/lib.d.ts]
+/// <reference no-default-lib="true"/>
+interface Boolean {}
+interface Function {}
+interface CallableFunction {}
+interface NewableFunction {}
+interface IArguments {}
+interface Number { toExponential: any; }
+interface Object {}
+interface RegExp {}
+interface String { charAt: any; }
+interface Array<T> { length: number; [n: number]: T; }
+interface ReadonlyArray<T> {}
+declare const console: { log(msg: any): void; };
+
+//// [/src/packages/pkg1.tsconfig.json]
+{"compilerOptions":{"composite":true,"typeRoots":["./typeroot1"]},"files":["./pkg1_index.ts"]}
+
+//// [/src/packages/pkg1_index.ts]
+export const theNum: TheNum = "type1";
+
+//// [/src/packages/pkg2.tsconfig.json]
+{"compilerOptions":{"composite":true,"typeRoots":["./typeroot2"]},"files":["./pkg2_index.ts"]}
+
+//// [/src/packages/pkg2_index.ts]
+export const theNum: TheNum2 = "type2";
+
+//// [/src/packages/typeroot1/sometype/index.d.ts]
+declare type TheNum = "type1";
+
+//// [/src/packages/typeroot2/sometype/index.d.ts]
+declare type TheNum2 = "type2";
+
+
+
+Output::
+/lib/tsc -b /src/packages/pkg1.tsconfig.json /src/packages/pkg2.tsconfig.json --verbose --traceResolution
+[12:00:00 AM] Projects in this build: 
+    * src/packages/pkg1.tsconfig.json
+    * src/packages/pkg2.tsconfig.json
+
+[12:00:00 AM] Project 'src/packages/pkg1.tsconfig.json' is out of date because output file 'src/packages/pkg1_index.js' does not exist
+
+[12:00:00 AM] Building project '/src/packages/pkg1.tsconfig.json'...
+
+======== Resolving type reference directive 'sometype', containing file '/src/packages/__inferred type names__.ts', root directory '/src/packages/typeroot1'. ========
+Resolving with primary search path '/src/packages/typeroot1'.
+File '/src/packages/typeroot1/sometype/package.json' does not exist.
+File '/src/packages/typeroot1/sometype/index.d.ts' exist - use it as a name resolution result.
+Resolving real path for '/src/packages/typeroot1/sometype/index.d.ts', result '/src/packages/typeroot1/sometype/index.d.ts'.
+======== Type reference directive 'sometype' was successfully resolved to '/src/packages/typeroot1/sometype/index.d.ts', primary: true. ========
+[12:00:00 AM] Project 'src/packages/pkg2.tsconfig.json' is out of date because output file 'src/packages/pkg2_index.js' does not exist
+
+[12:00:00 AM] Building project '/src/packages/pkg2.tsconfig.json'...
+
+======== Resolving type reference directive 'sometype', containing file '/src/packages/__inferred type names__.ts', root directory '/src/packages/typeroot2'. ========
+Resolving with primary search path '/src/packages/typeroot2'.
+File '/src/packages/typeroot2/sometype/package.json' does not exist.
+File '/src/packages/typeroot2/sometype/index.d.ts' exist - use it as a name resolution result.
+Resolving real path for '/src/packages/typeroot2/sometype/index.d.ts', result '/src/packages/typeroot2/sometype/index.d.ts'.
+======== Type reference directive 'sometype' was successfully resolved to '/src/packages/typeroot2/sometype/index.d.ts', primary: true. ========
+exitCode:: ExitStatus.Success
+
+
+//// [/src/packages/pkg1.tsconfig.tsbuildinfo]
+{"program":{"fileNames":["../../lib/lib.d.ts","./pkg1_index.ts","./typeroot1/sometype/index.d.ts"],"fileInfos":[{"version":"3858781397-/// <reference no-default-lib=\"true\"/>\ninterface Boolean {}\ninterface Function {}\ninterface CallableFunction {}\ninterface NewableFunction {}\ninterface IArguments {}\ninterface Number { toExponential: any; }\ninterface Object {}\ninterface RegExp {}\ninterface String { charAt: any; }\ninterface Array<T> { length: number; [n: number]: T; }\ninterface ReadonlyArray<T> {}\ndeclare const console: { log(msg: any): void; };","affectsGlobalScope":true},"-9601687719-export const theNum: TheNum = \"type1\";",{"version":"-4557394441-declare type TheNum = \"type1\";","affectsGlobalScope":true}],"options":{"composite":true},"referencedMap":[],"exportedModulesMap":[],"semanticDiagnosticsPerFile":[1,2,3]},"version":"FakeTSVersion"}
+
+//// [/src/packages/pkg1.tsconfig.tsbuildinfo.readable.baseline.txt]
+{
+  "program": {
+    "fileNames": [
+      "../../lib/lib.d.ts",
+      "./pkg1_index.ts",
+      "./typeroot1/sometype/index.d.ts"
+    ],
+    "fileInfos": {
+      "../../lib/lib.d.ts": {
+        "version": "3858781397-/// <reference no-default-lib=\"true\"/>\ninterface Boolean {}\ninterface Function {}\ninterface CallableFunction {}\ninterface NewableFunction {}\ninterface IArguments {}\ninterface Number { toExponential: any; }\ninterface Object {}\ninterface RegExp {}\ninterface String { charAt: any; }\ninterface Array<T> { length: number; [n: number]: T; }\ninterface ReadonlyArray<T> {}\ndeclare const console: { log(msg: any): void; };",
+        "signature": "3858781397-/// <reference no-default-lib=\"true\"/>\ninterface Boolean {}\ninterface Function {}\ninterface CallableFunction {}\ninterface NewableFunction {}\ninterface IArguments {}\ninterface Number { toExponential: any; }\ninterface Object {}\ninterface RegExp {}\ninterface String { charAt: any; }\ninterface Array<T> { length: number; [n: number]: T; }\ninterface ReadonlyArray<T> {}\ndeclare const console: { log(msg: any): void; };",
+        "affectsGlobalScope": true
+      },
+      "./pkg1_index.ts": {
+        "version": "-9601687719-export const theNum: TheNum = \"type1\";",
+        "signature": "-9601687719-export const theNum: TheNum = \"type1\";"
+      },
+      "./typeroot1/sometype/index.d.ts": {
+        "version": "-4557394441-declare type TheNum = \"type1\";",
+        "signature": "-4557394441-declare type TheNum = \"type1\";",
+        "affectsGlobalScope": true
+      }
+    },
+    "options": {
+      "composite": true
+    },
+    "referencedMap": {},
+    "exportedModulesMap": {},
+    "semanticDiagnosticsPerFile": [
+      "../../lib/lib.d.ts",
+      "./pkg1_index.ts",
+      "./typeroot1/sometype/index.d.ts"
+    ]
+  },
+  "version": "FakeTSVersion",
+  "size": 868
+}
+
+//// [/src/packages/pkg1_index.d.ts]
+/// <reference types="sometype" />
+export declare const theNum: TheNum;
+
+
+//// [/src/packages/pkg1_index.js]
+"use strict";
+exports.__esModule = true;
+exports.theNum = void 0;
+exports.theNum = "type1";
+
+
+//// [/src/packages/pkg2.tsconfig.tsbuildinfo]
+{"program":{"fileNames":["../../lib/lib.d.ts","./pkg2_index.ts","./typeroot2/sometype/index.d.ts"],"fileInfos":[{"version":"3858781397-/// <reference no-default-lib=\"true\"/>\ninterface Boolean {}\ninterface Function {}\ninterface CallableFunction {}\ninterface NewableFunction {}\ninterface IArguments {}\ninterface Number { toExponential: any; }\ninterface Object {}\ninterface RegExp {}\ninterface String { charAt: any; }\ninterface Array<T> { length: number; [n: number]: T; }\ninterface ReadonlyArray<T> {}\ndeclare const console: { log(msg: any): void; };","affectsGlobalScope":true},"-12823281204-export const theNum: TheNum2 = \"type2\";",{"version":"-980425686-declare type TheNum2 = \"type2\";","affectsGlobalScope":true}],"options":{"composite":true},"referencedMap":[],"exportedModulesMap":[],"semanticDiagnosticsPerFile":[1,2,3]},"version":"FakeTSVersion"}
+
+//// [/src/packages/pkg2.tsconfig.tsbuildinfo.readable.baseline.txt]
+{
+  "program": {
+    "fileNames": [
+      "../../lib/lib.d.ts",
+      "./pkg2_index.ts",
+      "./typeroot2/sometype/index.d.ts"
+    ],
+    "fileInfos": {
+      "../../lib/lib.d.ts": {
+        "version": "3858781397-/// <reference no-default-lib=\"true\"/>\ninterface Boolean {}\ninterface Function {}\ninterface CallableFunction {}\ninterface NewableFunction {}\ninterface IArguments {}\ninterface Number { toExponential: any; }\ninterface Object {}\ninterface RegExp {}\ninterface String { charAt: any; }\ninterface Array<T> { length: number; [n: number]: T; }\ninterface ReadonlyArray<T> {}\ndeclare const console: { log(msg: any): void; };",
+        "signature": "3858781397-/// <reference no-default-lib=\"true\"/>\ninterface Boolean {}\ninterface Function {}\ninterface CallableFunction {}\ninterface NewableFunction {}\ninterface IArguments {}\ninterface Number { toExponential: any; }\ninterface Object {}\ninterface RegExp {}\ninterface String { charAt: any; }\ninterface Array<T> { length: number; [n: number]: T; }\ninterface ReadonlyArray<T> {}\ndeclare const console: { log(msg: any): void; };",
+        "affectsGlobalScope": true
+      },
+      "./pkg2_index.ts": {
+        "version": "-12823281204-export const theNum: TheNum2 = \"type2\";",
+        "signature": "-12823281204-export const theNum: TheNum2 = \"type2\";"
+      },
+      "./typeroot2/sometype/index.d.ts": {
+        "version": "-980425686-declare type TheNum2 = \"type2\";",
+        "signature": "-980425686-declare type TheNum2 = \"type2\";",
+        "affectsGlobalScope": true
+      }
+    },
+    "options": {
+      "composite": true
+    },
+    "referencedMap": {},
+    "exportedModulesMap": {},
+    "semanticDiagnosticsPerFile": [
+      "../../lib/lib.d.ts",
+      "./pkg2_index.ts",
+      "./typeroot2/sometype/index.d.ts"
+    ]
+  },
+  "version": "FakeTSVersion",
+  "size": 870
+}
+
+//// [/src/packages/pkg2_index.d.ts]
+/// <reference types="sometype" />
+export declare const theNum: TheNum2;
+
+
+//// [/src/packages/pkg2_index.js]
+"use strict";
+exports.__esModule = true;
+exports.theNum = void 0;
+exports.theNum = "type2";
+
+