diff --git a/.changeset/serious-chairs-try.md b/.changeset/serious-chairs-try.md
new file mode 100644
index 0000000000..05bd579a84
--- /dev/null
+++ b/.changeset/serious-chairs-try.md
@@ -0,0 +1,5 @@
+---
+'xstate': patch
+---
+
+Fix types to allow for string state name in service onDone/onError config (#34)
diff --git a/packages/core/src/types.ts b/packages/core/src/types.ts
index 42aed4d5ea..979d8f1078 100644
--- a/packages/core/src/types.ts
+++ b/packages/core/src/types.ts
@@ -514,13 +514,13 @@ export interface InvokeConfig<TContext, TEvent extends EventObject> {
    */
   onDone?:
     | string
-    | SingleOrArray<TransitionConfig<TContext, DoneInvokeEvent<any>>>;
+    | SingleOrArray<TransitionConfigOrTarget<TContext, DoneInvokeEvent<any>>>;
   /**
    * The transition to take upon the invoked child machine sending an error event.
    */
   onError?:
     | string
-    | SingleOrArray<TransitionConfig<TContext, DoneInvokeEvent<any>>>;
+    | SingleOrArray<TransitionConfigOrTarget<TContext, DoneInvokeEvent<any>>>;
   /**
    * Meta data related to this invocation
    */
diff --git a/packages/core/test/types.test.ts b/packages/core/test/types.test.ts
index 4708242bb8..49d3315cac 100644
--- a/packages/core/test/types.test.ts
+++ b/packages/core/test/types.test.ts
@@ -668,3 +668,50 @@ describe('spawn', () => {
     });
   });
 });
+
+describe('service-targets', () => {
+  it('should work with a service that uses strings for both targets', () => {
+    const machine = createMachine({
+      invoke: {
+        src: () => new Promise((resolve) => resolve(1)),
+        onDone: ['a', 'b']
+      },
+      states: {
+        a: {},
+        b: {}
+      }
+    });
+    noop(machine);
+    expect(true).toBeTruthy();
+  });
+
+  it('should work with a service that uses TransitionConfigs for both targets', () => {
+    const machine = createMachine({
+      invoke: {
+        src: () => new Promise((resolve) => resolve(1)),
+        onDone: [{ target: 'a' }, { target: 'b' }]
+      },
+      states: {
+        a: {},
+        b: {}
+      }
+    });
+    noop(machine);
+    expect(true).toBeTruthy();
+  });
+
+  it('should work with a service that uses a string for one target and a TransitionConfig for another', () => {
+    const machine = createMachine({
+      invoke: {
+        src: () => new Promise((resolve) => resolve(1)),
+        onDone: [{ target: 'a' }, 'b']
+      },
+      states: {
+        a: {},
+        b: {}
+      }
+    });
+    noop(machine);
+    expect(true).toBeTruthy();
+  });
+});