diff --git a/src/index.ts b/src/index.ts
index 2817d42..4490118 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -20,17 +20,47 @@ const isPathPattern = /^\.{0,2}\//;
 const isTsFilePatten = /\.[cm]?tsx?$/;
 const nodeModulesPath = `${path.sep}node_modules${path.sep}`;
 
-const tsconfig = (
-	process.env.ESBK_TSCONFIG_PATH
-		? {
-			path: path.resolve(process.env.ESBK_TSCONFIG_PATH),
-			config: parseTsconfig(process.env.ESBK_TSCONFIG_PATH),
-		}
-		: getTsconfig()
-);
+function getProjectsMap(tsconfigPath?: string, projectsMap?: Map<string, {
+	tsconfig: ReturnType<typeof getTsconfig>;
+	tsconfigPathsMatcher: ReturnType<typeof createPathsMatcher>;
+	fileMatcher: ReturnType<typeof createFilesMatcher>;
+}>) {
+	if (!projectsMap) {
+		projectsMap = new Map();
+	}
+
+	const tsconfig = (
+		tsconfigPath
+			? {
+				path: path.resolve(tsconfigPath),
+				config: parseTsconfig(tsconfigPath),
+			}
+			: getTsconfig()
+	);
+
+	if (!tsconfig) {
+		return projectsMap;
+	}
+
+	if (projectsMap.has(tsconfig.path)) {
+		return projectsMap;
+	}
 
-const fileMatcher = tsconfig && createFilesMatcher(tsconfig);
-const tsconfigPathsMatcher = tsconfig && createPathsMatcher(tsconfig);
+	projectsMap.set(tsconfig.path, {
+		tsconfig,
+		tsconfigPathsMatcher: tsconfig && createPathsMatcher(tsconfig),
+		fileMatcher: tsconfig && createFilesMatcher(tsconfig),
+	});
+
+	tsconfig?.config?.references?.forEach((reference) => {
+		const referencedTsconfigPath = reference.path.endsWith('.json') ? reference.path : path.join(reference.path, 'tsconfig.json');
+		projectsMap = getProjectsMap(referencedTsconfigPath, projectsMap);
+	});
+
+	return projectsMap;
+}
+
+export const projectsMap = getProjectsMap(process.env.ESBK_TSCONFIG_PATH);
 
 const applySourceMap = installSourceMapSupport();
 
@@ -67,11 +97,18 @@ function transformer(
 			code = applySourceMap(transformed, filePath);
 		}
 	} else {
+		let tsconfigRaw: TransformOptions['tsconfigRaw'];
+		for (const project of projectsMap.values()) {
+			tsconfigRaw = project.fileMatcher(filePath) as TransformOptions['tsconfigRaw'];
+			if (tsconfigRaw) {
+				break;
+			}
+		}
 		const transformed = transformSync(
 			code,
 			filePath,
 			{
-				tsconfigRaw: fileMatcher?.(filePath) as TransformOptions['tsconfigRaw'],
+				tsconfigRaw,
 			},
 		);
 
@@ -131,7 +168,7 @@ Module._resolveFilename = function (request, parent, isMain, options) {
 	}
 
 	if (
-		tsconfigPathsMatcher
+		projectsMap.size > 0
 
 		// bare specifier
 		&& !isPathPattern.test(request)
@@ -139,7 +176,15 @@ Module._resolveFilename = function (request, parent, isMain, options) {
 		// Dependency paths should not be resolved using tsconfig.json
 		&& !parent?.filename?.includes(nodeModulesPath)
 	) {
-		const possiblePaths = tsconfigPathsMatcher(request);
+		const possiblePaths: string[] = [];
+		projectsMap.forEach((project) => {
+			if (project.tsconfigPathsMatcher) {
+				const possibleProjectPaths = project.tsconfigPathsMatcher(request);
+				if (possibleProjectPaths) {
+					possiblePaths.push(...possibleProjectPaths);
+				}
+			}
+		});
 
 		for (const possiblePath of possiblePaths) {
 			const tsFilename = resolveTsFilename.call(this, possiblePath, parent, isMain, options);
@@ -155,7 +200,7 @@ Module._resolveFilename = function (request, parent, isMain, options) {
 					isMain,
 					options,
 				);
-			} catch {}
+			} catch { }
 		}
 	}
 
diff --git a/tests/fixtures/tsconfig/dependency-resolve-project-reference.ts b/tests/fixtures/tsconfig/dependency-resolve-project-reference.ts
new file mode 100644
index 0000000..41964bc
--- /dev/null
+++ b/tests/fixtures/tsconfig/dependency-resolve-project-reference.ts
@@ -0,0 +1,3 @@
+import { resolve } from "resolve-project-reference";
+
+console.log(resolve);
\ No newline at end of file
diff --git a/tests/fixtures/tsconfig/resolve-project-reference/package.json b/tests/fixtures/tsconfig/resolve-project-reference/package.json
new file mode 100644
index 0000000..6a22b7b
--- /dev/null
+++ b/tests/fixtures/tsconfig/resolve-project-reference/package.json
@@ -0,0 +1,3 @@
+{
+  "main": "src/index.ts"
+}
\ No newline at end of file
diff --git a/tests/fixtures/tsconfig/resolve-project-reference/src/index.ts b/tests/fixtures/tsconfig/resolve-project-reference/src/index.ts
new file mode 100644
index 0000000..2e62b04
--- /dev/null
+++ b/tests/fixtures/tsconfig/resolve-project-reference/src/index.ts
@@ -0,0 +1 @@
+export * from "~/resolve";
\ No newline at end of file
diff --git a/tests/fixtures/tsconfig/resolve-project-reference/src/resolve.ts b/tests/fixtures/tsconfig/resolve-project-reference/src/resolve.ts
new file mode 100644
index 0000000..1326533
--- /dev/null
+++ b/tests/fixtures/tsconfig/resolve-project-reference/src/resolve.ts
@@ -0,0 +1 @@
+export const resolve = "resolved";
\ No newline at end of file
diff --git a/tests/fixtures/tsconfig/resolve-project-reference/tsconfig.json b/tests/fixtures/tsconfig/resolve-project-reference/tsconfig.json
new file mode 100644
index 0000000..f6bfa42
--- /dev/null
+++ b/tests/fixtures/tsconfig/resolve-project-reference/tsconfig.json
@@ -0,0 +1,11 @@
+{
+  "compilerOptions": {
+    "composite": true,
+    "baseUrl": ".",
+    "paths": {
+      "~/*": [
+        "src/*",
+      ],
+    },
+  },
+}
\ No newline at end of file
diff --git a/tests/fixtures/tsconfig/tsconfig.json b/tests/fixtures/tsconfig/tsconfig.json
index 9d0c412..267cad9 100644
--- a/tests/fixtures/tsconfig/tsconfig.json
+++ b/tests/fixtures/tsconfig/tsconfig.json
@@ -5,9 +5,23 @@
 		"jsxFragmentFactory": "null",
 		"baseUrl": "./src",
 		"paths": {
-			"paths-exact-match": ["resolve-target"],
-			"p/*": ["utils/*"],
-			"*/s": ["utils/*"]
+			"paths-exact-match": [
+				"resolve-target"
+			],
+			"p/*": [
+				"utils/*"
+			],
+			"*/s": [
+				"utils/*"
+			],
+			"resolve-project-reference": [
+				"../resolve-project-reference/src/index.ts"
+			]
 		},
 	},
-}
+	"references": [
+		{
+			"path": "./resolve-project-reference"
+		}
+	]
+}
\ No newline at end of file
diff --git a/tests/specs/typescript/tsconfig.ts b/tests/specs/typescript/tsconfig.ts
index 20882eb..a8e7892 100644
--- a/tests/specs/typescript/tsconfig.ts
+++ b/tests/specs/typescript/tsconfig.ts
@@ -181,6 +181,13 @@ export default testSuite(async ({ describe }, node: NodeApis) => {
 					});
 					expect(nodeProcess.stdout).toBe('resolved');
 				});
+
+				test('should resolve project reference', async () => {
+					const nodeProcess = await node.load('./dependency-resolve-project-reference', {
+						cwd: './tsconfig',
+					});
+					expect(nodeProcess.stdout).toBe('resolved');
+				});
 			});
 		});
 	});