diff --git a/packages/compiler-sfc/__tests__/compileScript/resolveType.spec.ts b/packages/compiler-sfc/__tests__/compileScript/resolveType.spec.ts
index 5dd02a66d3f..93bd20879ae 100644
--- a/packages/compiler-sfc/__tests__/compileScript/resolveType.spec.ts
+++ b/packages/compiler-sfc/__tests__/compileScript/resolveType.spec.ts
@@ -1022,6 +1022,53 @@ describe('resolveType', () => {
       expect(deps && [...deps]).toStrictEqual(['/user.ts'])
     })
 
+    test('ts module resolve w/ project reference folder', () => {
+      const files = {
+        '/tsconfig.json': JSON.stringify({
+          references: [
+            {
+              path: './web',
+            },
+            {
+              path: './empty',
+            },
+            {
+              path: './noexists-should-ignore',
+            },
+          ],
+        }),
+        '/web/tsconfig.json': JSON.stringify({
+          include: ['../**/*.ts', '../**/*.vue'],
+          compilerOptions: {
+            composite: true,
+            paths: {
+              bar: ['../user.ts'],
+            },
+          },
+        }),
+        // tsconfig with no include / paths defined, should match nothing
+        '/empty/tsconfig.json': JSON.stringify({
+          compilerOptions: {
+            composite: true,
+          },
+        }),
+        '/user.ts': 'export type User = { bar: string }',
+      }
+
+      const { props, deps } = resolve(
+        `
+        import { User } from 'bar'
+        defineProps<User>() 
+        `,
+        files,
+      )
+
+      expect(props).toStrictEqual({
+        bar: ['String'],
+      })
+      expect(deps && [...deps]).toStrictEqual(['/user.ts'])
+    })
+
     test('ts module resolve w/ path aliased vue file', () => {
       const files = {
         '/tsconfig.json': JSON.stringify({
diff --git a/packages/compiler-sfc/src/script/resolveType.ts b/packages/compiler-sfc/src/script/resolveType.ts
index 5566744526a..a17598a82ef 100644
--- a/packages/compiler-sfc/src/script/resolveType.ts
+++ b/packages/compiler-sfc/src/script/resolveType.ts
@@ -1014,11 +1014,11 @@ function resolveWithTS(
           (c.config.options.pathsBasePath as string) ||
             dirname(c.config.options.configFilePath as string),
         )
-        const included: string[] = c.config.raw?.include
-        const excluded: string[] = c.config.raw?.exclude
+        const included: string[] | undefined = c.config.raw?.include
+        const excluded: string[] | undefined = c.config.raw?.exclude
         if (
           (!included && (!base || containingFile.startsWith(base))) ||
-          included.some(p => isMatch(containingFile, joinPaths(base, p)))
+          included?.some(p => isMatch(containingFile, joinPaths(base, p)))
         ) {
           if (
             excluded &&
@@ -1089,8 +1089,12 @@ function loadTSConfig(
   const res = [config]
   if (config.projectReferences) {
     for (const ref of config.projectReferences) {
-      tsConfigRefMap.set(ref.path, configPath)
-      res.unshift(...loadTSConfig(ref.path, ts, fs))
+      const refPath = ts.resolveProjectReferencePath(ref)
+      if (!fs.fileExists(refPath)) {
+        continue
+      }
+      tsConfigRefMap.set(refPath, configPath)
+      res.unshift(...loadTSConfig(refPath, ts, fs))
     }
   }
   return res