diff --git a/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.js b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.js
new file mode 100644
index 0000000000000..9f09bea10cf20
--- /dev/null
+++ b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.js
@@ -0,0 +1,44 @@
+//// [tests/cases/compiler/moduleResolutionPackageIdWithRelativeAndAbsolutePath.ts] ////
+
+//// [package.json]
+{
+    "name": "troublesome-lib",
+    "version": "1.17.1"
+}
+//// [Compactable.d.ts]
+import { Option } from './Option';
+export class Compactable {
+    option: Option;
+}
+//// [Option.d.ts]
+export class Option {
+    someProperty: string;
+}
+//// [app.d.ts]
+import { Option } from "troublesome-lib/lib/Option";
+export class SharedOption extends Option { }
+export const makeSharedOption: () => SharedOption;
+//// [index.d.ts]
+import { Compactable } from "troublesome-lib/lib/Compactable"; // Including this will resolve Option as relative through the imports of compactable
+//// [package.json]
+{
+    "name": "troublesome-lib",
+    "version": "1.17.1"
+}
+//// [Compactable.d.ts]
+import { Option } from './Option';
+export class Compactable {
+    option: Option;
+}
+//// [Option.d.ts]
+export class Option {
+    someProperty: string;
+}
+//// [app.ts]
+import * as t from "anotherLib"; // Include the lib that recursively includes option as relative module resolution in this directory
+import { makeSharedOption } from "@shared/lib/app"; // Includes option as module in shared folder but as module in node_modules folder
+
+
+//// [/project/src/app.js]
+"use strict";
+exports.__esModule = true;
diff --git a/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.symbols b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.symbols
new file mode 100644
index 0000000000000..1e4d65e10b364
--- /dev/null
+++ b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.symbols
@@ -0,0 +1,48 @@
+=== /project/src/app.ts ===
+import * as t from "anotherLib"; // Include the lib that recursively includes option as relative module resolution in this directory
+>t : Symbol(t, Decl(app.ts, 0, 6))
+
+import { makeSharedOption } from "@shared/lib/app"; // Includes option as module in shared folder but as module in node_modules folder
+>makeSharedOption : Symbol(makeSharedOption, Decl(app.ts, 1, 8))
+
+=== /shared/node_modules/troublesome-lib/lib/Option.d.ts ===
+export class Option {
+>Option : Symbol(Option, Decl(Option.d.ts, 0, 0))
+
+    someProperty: string;
+>someProperty : Symbol(Option.someProperty, Decl(Option.d.ts, 0, 21))
+}
+=== /shared/lib/app.d.ts ===
+import { Option } from "troublesome-lib/lib/Option";
+>Option : Symbol(Option, Decl(app.d.ts, 0, 8))
+
+export class SharedOption extends Option { }
+>SharedOption : Symbol(SharedOption, Decl(app.d.ts, 0, 52))
+>Option : Symbol(Option, Decl(app.d.ts, 0, 8))
+
+export const makeSharedOption: () => SharedOption;
+>makeSharedOption : Symbol(makeSharedOption, Decl(app.d.ts, 2, 12))
+>SharedOption : Symbol(SharedOption, Decl(app.d.ts, 0, 52))
+
+=== /project/node_modules/anotherLib/index.d.ts ===
+import { Compactable } from "troublesome-lib/lib/Compactable"; // Including this will resolve Option as relative through the imports of compactable
+>Compactable : Symbol(Compactable, Decl(index.d.ts, 0, 8))
+
+=== /project/node_modules/troublesome-lib/lib/Compactable.d.ts ===
+import { Option } from './Option';
+>Option : Symbol(Option, Decl(Compactable.d.ts, 0, 8))
+
+export class Compactable {
+>Compactable : Symbol(Compactable, Decl(Compactable.d.ts, 0, 34))
+
+    option: Option;
+>option : Symbol(Compactable.option, Decl(Compactable.d.ts, 1, 26))
+>Option : Symbol(Option, Decl(Compactable.d.ts, 0, 8))
+}
+=== /project/node_modules/troublesome-lib/lib/Option.d.ts ===
+export class Option {
+>Option : Symbol(Option, Decl(Option.d.ts, 0, 0))
+
+    someProperty: string;
+>someProperty : Symbol(Option.someProperty, Decl(Option.d.ts, 0, 21))
+}
diff --git a/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json
new file mode 100644
index 0000000000000..b08a0f124565d
--- /dev/null
+++ b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json
@@ -0,0 +1,76 @@
+[
+    "======== Resolving module 'anotherLib' from '/project/src/app.ts'. ========",
+    "Module resolution kind is not specified, using 'NodeJs'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name 'anotherLib'.",
+    "'paths' option is specified, looking for a pattern to match module name 'anotherLib'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name 'anotherLib'.",
+    "Resolving module name 'anotherLib' relative to base url '/project' - '/project/anotherLib'.",
+    "Loading module as file / folder, candidate module location '/project/anotherLib', target file type 'TypeScript'.",
+    "File '/project/anotherLib.ts' does not exist.",
+    "File '/project/anotherLib.tsx' does not exist.",
+    "File '/project/anotherLib.d.ts' does not exist.",
+    "Directory '/project/anotherLib' does not exist, skipping all lookups in it.",
+    "Loading module 'anotherLib' from 'node_modules' folder, target file type 'TypeScript'.",
+    "Directory '/project/src/node_modules' does not exist, skipping all lookups in it.",
+    "File '/project/node_modules/anotherLib/package.json' does not exist.",
+    "File '/project/node_modules/anotherLib.ts' does not exist.",
+    "File '/project/node_modules/anotherLib.tsx' does not exist.",
+    "File '/project/node_modules/anotherLib.d.ts' does not exist.",
+    "File '/project/node_modules/anotherLib/index.ts' does not exist.",
+    "File '/project/node_modules/anotherLib/index.tsx' does not exist.",
+    "File '/project/node_modules/anotherLib/index.d.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/project/node_modules/anotherLib/index.d.ts', result '/project/node_modules/anotherLib/index.d.ts'.",
+    "======== Module name 'anotherLib' was successfully resolved to '/project/node_modules/anotherLib/index.d.ts'. ========",
+    "======== Resolving module '@shared/lib/app' from '/project/src/app.ts'. ========",
+    "Module resolution kind is not specified, using 'NodeJs'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name '@shared/lib/app'.",
+    "'paths' option is specified, looking for a pattern to match module name '@shared/lib/app'.",
+    "Module name '@shared/lib/app', matched pattern '@shared/*'.",
+    "Trying substitution '../shared/*', candidate module location: '../shared/lib/app'.",
+    "Loading module as file / folder, candidate module location '/shared/lib/app', target file type 'TypeScript'.",
+    "File '/shared/lib/app.ts' does not exist.",
+    "File '/shared/lib/app.tsx' does not exist.",
+    "File '/shared/lib/app.d.ts' exist - use it as a name resolution result.",
+    "======== Module name '@shared/lib/app' was successfully resolved to '/shared/lib/app.d.ts'. ========",
+    "======== Resolving module 'troublesome-lib/lib/Compactable' from '/project/node_modules/anotherLib/index.d.ts'. ========",
+    "Module resolution kind is not specified, using 'NodeJs'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name 'troublesome-lib/lib/Compactable'.",
+    "'paths' option is specified, looking for a pattern to match module name 'troublesome-lib/lib/Compactable'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name 'troublesome-lib/lib/Compactable'.",
+    "Resolving module name 'troublesome-lib/lib/Compactable' relative to base url '/project' - '/project/troublesome-lib/lib/Compactable'.",
+    "Loading module as file / folder, candidate module location '/project/troublesome-lib/lib/Compactable', target file type 'TypeScript'.",
+    "Loading module 'troublesome-lib/lib/Compactable' from 'node_modules' folder, target file type 'TypeScript'.",
+    "Directory '/project/node_modules/anotherLib/node_modules' does not exist, skipping all lookups in it.",
+    "'package.json' does not have a 'typesVersions' field.",
+    "Found 'package.json' at '/project/node_modules/troublesome-lib/package.json'. Package ID is 'troublesome-lib/lib/Compactable/index.d.ts@1.17.1'.",
+    "File '/project/node_modules/troublesome-lib/lib/Compactable.ts' does not exist.",
+    "File '/project/node_modules/troublesome-lib/lib/Compactable.tsx' does not exist.",
+    "File '/project/node_modules/troublesome-lib/lib/Compactable.d.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/project/node_modules/troublesome-lib/lib/Compactable.d.ts', result '/project/node_modules/troublesome-lib/lib/Compactable.d.ts'.",
+    "======== Module name 'troublesome-lib/lib/Compactable' was successfully resolved to '/project/node_modules/troublesome-lib/lib/Compactable.d.ts'. ========",
+    "======== Resolving module './Option' from '/project/node_modules/troublesome-lib/lib/Compactable.d.ts'. ========",
+    "Module resolution kind is not specified, using 'NodeJs'.",
+    "Loading module as file / folder, candidate module location '/project/node_modules/troublesome-lib/lib/Option', target file type 'TypeScript'.",
+    "File '/project/node_modules/troublesome-lib/lib/Option.ts' does not exist.",
+    "File '/project/node_modules/troublesome-lib/lib/Option.tsx' does not exist.",
+    "File '/project/node_modules/troublesome-lib/lib/Option.d.ts' exist - use it as a name resolution result.",
+    "'package.json' does not have a 'typesVersions' field.",
+    "Found 'package.json' at '/project/node_modules/troublesome-lib/package.json'. Package ID is 'troublesome-lib/lib/Option.d.ts@1.17.1'.",
+    "======== Module name './Option' was successfully resolved to '/project/node_modules/troublesome-lib/lib/Option.d.ts'. ========",
+    "======== Resolving module 'troublesome-lib/lib/Option' from '/shared/lib/app.d.ts'. ========",
+    "Module resolution kind is not specified, using 'NodeJs'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name 'troublesome-lib/lib/Option'.",
+    "'paths' option is specified, looking for a pattern to match module name 'troublesome-lib/lib/Option'.",
+    "'baseUrl' option is set to '/project', using this value to resolve non-relative module name 'troublesome-lib/lib/Option'.",
+    "Resolving module name 'troublesome-lib/lib/Option' relative to base url '/project' - '/project/troublesome-lib/lib/Option'.",
+    "Loading module as file / folder, candidate module location '/project/troublesome-lib/lib/Option', target file type 'TypeScript'.",
+    "Loading module 'troublesome-lib/lib/Option' from 'node_modules' folder, target file type 'TypeScript'.",
+    "Directory '/shared/lib/node_modules' does not exist, skipping all lookups in it.",
+    "'package.json' does not have a 'typesVersions' field.",
+    "Found 'package.json' at '/shared/node_modules/troublesome-lib/package.json'. Package ID is 'troublesome-lib/lib/Option/index.d.ts@1.17.1'.",
+    "File '/shared/node_modules/troublesome-lib/lib/Option.ts' does not exist.",
+    "File '/shared/node_modules/troublesome-lib/lib/Option.tsx' does not exist.",
+    "File '/shared/node_modules/troublesome-lib/lib/Option.d.ts' exist - use it as a name resolution result.",
+    "Resolving real path for '/shared/node_modules/troublesome-lib/lib/Option.d.ts', result '/shared/node_modules/troublesome-lib/lib/Option.d.ts'.",
+    "======== Module name 'troublesome-lib/lib/Option' was successfully resolved to '/shared/node_modules/troublesome-lib/lib/Option.d.ts'. ========"
+]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.types b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.types
new file mode 100644
index 0000000000000..f3aa22e7df2bc
--- /dev/null
+++ b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.types
@@ -0,0 +1,46 @@
+=== /project/src/app.ts ===
+import * as t from "anotherLib"; // Include the lib that recursively includes option as relative module resolution in this directory
+>t : typeof t
+
+import { makeSharedOption } from "@shared/lib/app"; // Includes option as module in shared folder but as module in node_modules folder
+>makeSharedOption : () => import("/shared/lib/app").SharedOption
+
+=== /shared/node_modules/troublesome-lib/lib/Option.d.ts ===
+export class Option {
+>Option : Option
+
+    someProperty: string;
+>someProperty : string
+}
+=== /shared/lib/app.d.ts ===
+import { Option } from "troublesome-lib/lib/Option";
+>Option : typeof Option
+
+export class SharedOption extends Option { }
+>SharedOption : SharedOption
+>Option : Option
+
+export const makeSharedOption: () => SharedOption;
+>makeSharedOption : () => SharedOption
+
+=== /project/node_modules/anotherLib/index.d.ts ===
+import { Compactable } from "troublesome-lib/lib/Compactable"; // Including this will resolve Option as relative through the imports of compactable
+>Compactable : typeof Compactable
+
+=== /project/node_modules/troublesome-lib/lib/Compactable.d.ts ===
+import { Option } from './Option';
+>Option : typeof Option
+
+export class Compactable {
+>Compactable : Compactable
+
+    option: Option;
+>option : Option
+}
+=== /project/node_modules/troublesome-lib/lib/Option.d.ts ===
+export class Option {
+>Option : Option
+
+    someProperty: string;
+>someProperty : string
+}
diff --git a/tests/cases/compiler/moduleResolutionPackageIdWithRelativeAndAbsolutePath.ts b/tests/cases/compiler/moduleResolutionPackageIdWithRelativeAndAbsolutePath.ts
new file mode 100644
index 0000000000000..acbde7b1c7b9f
--- /dev/null
+++ b/tests/cases/compiler/moduleResolutionPackageIdWithRelativeAndAbsolutePath.ts
@@ -0,0 +1,51 @@
+// @noImplicitReferences: true
+// @fullEmitPaths: true
+// @traceResolution: true
+// @filename: /shared/node_modules/troublesome-lib/package.json
+{
+    "name": "troublesome-lib",
+    "version": "1.17.1"
+}
+// @filename: /shared/node_modules/troublesome-lib/lib/Compactable.d.ts
+import { Option } from './Option';
+export class Compactable {
+    option: Option;
+}
+// @filename: /shared/node_modules/troublesome-lib/lib/Option.d.ts
+export class Option {
+    someProperty: string;
+}
+// @filename: /shared/lib/app.d.ts
+import { Option } from "troublesome-lib/lib/Option";
+export class SharedOption extends Option { }
+export const makeSharedOption: () => SharedOption;
+// @filename: /project/node_modules/anotherLib/index.d.ts
+import { Compactable } from "troublesome-lib/lib/Compactable"; // Including this will resolve Option as relative through the imports of compactable
+// @filename: /project/node_modules/troublesome-lib/package.json
+{
+    "name": "troublesome-lib",
+    "version": "1.17.1"
+}
+// @filename: /project/node_modules/troublesome-lib/lib/Compactable.d.ts
+import { Option } from './Option';
+export class Compactable {
+    option: Option;
+}
+// @filename: /project/node_modules/troublesome-lib/lib/Option.d.ts
+export class Option {
+    someProperty: string;
+}
+// @filename: /project/src/app.ts
+import * as t from "anotherLib"; // Include the lib that recursively includes option as relative module resolution in this directory
+import { makeSharedOption } from "@shared/lib/app"; // Includes option as module in shared folder but as module in node_modules folder
+
+// @filename: /project/tsconfig.json
+{
+    "compilerOptions": {
+        "baseUrl": ".",
+        "paths": {
+            "@shared/*": ["../shared/*"]
+        }
+    },
+   //"files": ["src/app.ts"]
+}
\ No newline at end of file