diff --git a/packages/typescript/src/index.ts b/packages/typescript/src/index.ts
index 6b0eb2652..339a8ba40 100644
--- a/packages/typescript/src/index.ts
+++ b/packages/typescript/src/index.ts
@@ -178,20 +178,8 @@ export default function typescript(options: RollupTypescriptOptions = {}): Plugi
         if (outputOptions.dir) {
           baseDir = outputOptions.dir;
         } else if (outputOptions.file) {
-          // find common path of output.file and configured declation output
-          const outputDir = path.dirname(outputOptions.file);
-          const configured = path.resolve(
-            parsedOptions.options.declarationDir ||
-              parsedOptions.options.outDir ||
-              tsconfig ||
-              process.cwd()
-          );
-          const backwards = path
-            .relative(outputDir, configured)
-            .split(path.sep)
-            .filter((v) => v === '..')
-            .join(path.sep);
-          baseDir = path.normalize(`${outputDir}/${backwards}`);
+          // the bundle output directory used by rollup when outputOptions.file is used instead of outputOptions.dir
+          baseDir = path.dirname(outputOptions.file);
         }
         if (!baseDir) return;
 
diff --git a/packages/typescript/src/options/validate.ts b/packages/typescript/src/options/validate.ts
index 7dbc3367c..d0f22e3de 100644
--- a/packages/typescript/src/options/validate.ts
+++ b/packages/typescript/src/options/validate.ts
@@ -1,4 +1,4 @@
-import { relative } from 'path';
+import { relative, dirname } from 'path';
 
 import type { OutputOptions, PluginContext } from 'rollup';
 
@@ -51,14 +51,24 @@ export function validatePaths(
     );
   }
 
+  let outputDir: string | undefined = outputOptions.dir;
+  if (outputOptions.file) {
+    outputDir = dirname(outputOptions.file);
+  }
   for (const dirProperty of DIRECTORY_PROPS) {
-    if (compilerOptions[dirProperty] && outputOptions.dir) {
+    if (compilerOptions[dirProperty] && outputDir) {
       // Checks if the given path lies within Rollup output dir
-      const fromRollupDirToTs = relative(outputOptions.dir, compilerOptions[dirProperty]!);
+      const fromRollupDirToTs = relative(outputDir, compilerOptions[dirProperty]!);
       if (fromRollupDirToTs.startsWith('..')) {
-        context.error(
-          `@rollup/plugin-typescript: Path of Typescript compiler option '${dirProperty}' must be located inside Rollup 'dir' option.`
-        );
+        if (outputOptions.dir) {
+          context.error(
+            `@rollup/plugin-typescript: Path of Typescript compiler option '${dirProperty}' must be located inside Rollup 'dir' option.`
+          );
+        } else {
+          context.error(
+            `@rollup/plugin-typescript: Path of Typescript compiler option '${dirProperty}' must be located inside the same directory as the Rollup 'file' option.`
+          );
+        }
       }
     }
   }
diff --git a/packages/typescript/test/test.js b/packages/typescript/test/test.js
index 127f98e19..d5ac91086 100644
--- a/packages/typescript/test/test.js
+++ b/packages/typescript/test/test.js
@@ -101,6 +101,34 @@ test.serial('ensures declarationDir is located in Rollup output dir', async (t)
   );
 });
 
+test.serial(
+  'ensures declarationDir is located in Rollup output directory when output.file is used',
+  async (t) => {
+    const bundle = await rollup({
+      input: 'fixtures/basic/main.ts',
+      plugins: [
+        typescript({
+          tsconfig: 'fixtures/basic/tsconfig.json',
+          declarationDir: 'fixtures/basic/other/',
+          declaration: true
+        })
+      ],
+      onwarn
+    });
+
+    // this should throw an error just like the equivalent setup using output.dir above
+    const wrongDirError = await t.throwsAsync(() =>
+      getCode(bundle, { format: 'es', file: 'fixtures/basic/dist/index.js' }, true)
+    );
+    t.true(
+      wrongDirError.message.includes(
+        `Path of Typescript compiler option 'declarationDir' must be located inside the same directory as the Rollup 'file' option`
+      ),
+      `Unexpected error message: ${wrongDirError.message}`
+    );
+  }
+);
+
 test.serial('ensures multiple outputs can be built', async (t) => {
   // In a rollup.config.js we would pass an array
   // The rollup method that's exported as a library won't do that so we must make two calls