diff --git a/packages/nx/src/daemon/client/client.ts b/packages/nx/src/daemon/client/client.ts
index f3a8bc8918234..a11f69f04dfd0 100644
--- a/packages/nx/src/daemon/client/client.ts
+++ b/packages/nx/src/daemon/client/client.ts
@@ -106,7 +106,8 @@ export class DaemonClient {
   async registerFileWatcher(
     config: {
       watchProjects: string[] | 'all';
-      includeGlobalWorkspaceFiles: boolean;
+      includeGlobalWorkspaceFiles?: boolean;
+      includeDependentProjects?: boolean;
     },
     callback: (
       error: Error | null | 'closed',
diff --git a/packages/nx/src/daemon/server/file-watching/file-watcher-sockets.ts b/packages/nx/src/daemon/server/file-watching/file-watcher-sockets.ts
index 38a86a0e94b0c..6a794c1ce2c60 100644
--- a/packages/nx/src/daemon/server/file-watching/file-watcher-sockets.ts
+++ b/packages/nx/src/daemon/server/file-watching/file-watcher-sockets.ts
@@ -1,6 +1,8 @@
 import { Socket } from 'net';
-import { ProjectGraphCache } from '../../../project-graph/nx-deps-cache';
+import { ProjectGraph } from '../../../config/project-graph';
+import { findAllProjectNodeDependencies } from '../../../utils/project-graph-utils';
 import { PromisedBasedQueue } from '../../../utils/promised-based-queue';
+import { currentProjectGraphCache } from '../project-graph-incremental-recomputation';
 import { handleResult } from '../server';
 import { getProjectsAndGlobalChanges } from './changed-projects';
 
@@ -11,6 +13,7 @@ export let registeredFileWatcherSockets: {
   config: {
     watchProjects: string[] | 'all';
     includeGlobalWorkspaceFiles: boolean;
+    includeDependentProjects: boolean;
   };
 }[] = [];
 
@@ -52,7 +55,20 @@ export function notifyFileWatcherSockets(
             changedFiles.push(...projectFiles);
           }
         } else {
-          for (const watchedProject of config.watchProjects) {
+          const watchedProjects = [...config.watchProjects];
+
+          if (config.includeDependentProjects) {
+            for (const project of watchedProjects) {
+              watchedProjects.push(
+                ...findAllProjectNodeDependencies(
+                  project,
+                  currentProjectGraphCache as ProjectGraph
+                )
+              );
+            }
+          }
+
+          for (const watchedProject of new Set(watchedProjects)) {
             if (!!projectAndGlobalChanges.projects[watchedProject]) {
               changedProjects.push(watchedProject);
 
diff --git a/packages/nx/src/daemon/server/project-graph-incremental-recomputation.ts b/packages/nx/src/daemon/server/project-graph-incremental-recomputation.ts
index dab493015f546..c935ca6e28ae3 100644
--- a/packages/nx/src/daemon/server/project-graph-incremental-recomputation.ts
+++ b/packages/nx/src/daemon/server/project-graph-incremental-recomputation.ts
@@ -24,7 +24,7 @@ let cachedSerializedProjectGraphPromise: Promise<{
 export let projectFileMapWithFiles:
   | { projectFileMap: ProjectFileMap; allWorkspaceFiles: FileData[] }
   | undefined;
-let currentProjectGraphCache: ProjectGraphCache | undefined;
+export let currentProjectGraphCache: ProjectGraphCache | undefined;
 
 const collectedUpdatedFiles = new Set<string>();
 const collectedDeletedFiles = new Set<string>();