diff --git a/src/transformer.ts b/src/transformer.ts
index 68c156ae..c4074d9d 100755
--- a/src/transformer.ts
+++ b/src/transformer.ts
@@ -2,11 +2,12 @@
 import {} from "ts-expose-internals";
 import path from "path";
 import ts from "typescript";
-import { cast, getImplicitExtensions } from "./utils";
+import { cast } from "./utils";
 import { TsTransformPathsConfig, TsTransformPathsContext, TypeScriptThree, VisitorContext } from "./types";
 import { nodeVisitor } from "./visitor";
 import { createHarmonyFactory } from "./utils/harmony-factory";
 import { Minimatch } from "minimatch";
+import { createParsedCommandLineForProgram } from "./utils/ts-helpers";
 
 /* ****************************************************************************************************************** *
  * Transformer
@@ -20,27 +21,31 @@ export default function transformer(
   if (!tsInstance) tsInstance = ts;
 
   const compilerOptions = program.getCompilerOptions();
-  const implicitExtensions = getImplicitExtensions(compilerOptions);
   const rootDirs = compilerOptions.rootDirs?.filter(path.isAbsolute);
 
   return (transformationContext: ts.TransformationContext) => {
+    const pathsBasePath = compilerOptions.pathsBasePath ?? compilerOptions.baseUrl;
+
+    if (!pathsBasePath || !compilerOptions.paths) return (sourceFile: ts.SourceFile) => sourceFile;
+
     const tsTransformPathsContext: TsTransformPathsContext = {
       compilerOptions,
       config,
       elisionMap: new Map(),
       tsFactory: transformationContext.factory,
-      implicitExtensions,
       program,
       rootDirs,
       transformationContext,
       tsInstance,
+      pathsBasePath,
+      getCanonicalFileName: tsInstance.createGetCanonicalFileName(tsInstance.sys.useCaseSensitiveFileNames),
       tsThreeInstance: cast<TypeScriptThree>(tsInstance),
       excludeMatchers: config.exclude?.map((globPattern) => new Minimatch(globPattern, { matchBase: true })),
+      parsedCommandLine: createParsedCommandLineForProgram(tsInstance, program),
+      outputFileNamesCache: new Map(),
     };
 
     return (sourceFile: ts.SourceFile) => {
-      if (!compilerOptions.baseUrl || !compilerOptions.paths) return sourceFile;
-
       const visitorContext: VisitorContext = {
         ...tsTransformPathsContext,
         sourceFile,
diff --git a/src/types.ts b/src/types.ts
index 35d2397a..9dcd3009 100755
--- a/src/types.ts
+++ b/src/types.ts
@@ -1,5 +1,5 @@
 import tsThree from "./declarations/typescript3";
-import ts, { CompilerOptions } from "typescript";
+import ts, { CompilerOptions, GetCanonicalFileName, ParsedCommandLine } from 'typescript';
 import { PluginConfig } from "ts-patch";
 import { HarmonyFactory } from "./utils/harmony-factory";
 import { IMinimatch } from "minimatch";
@@ -42,12 +42,15 @@ export interface TsTransformPathsContext {
   readonly tsFactory?: ts.NodeFactory;
   readonly program: ts.Program | tsThree.Program;
   readonly config: TsTransformPathsConfig;
-  readonly implicitExtensions: readonly string[];
   readonly compilerOptions: CompilerOptions;
   readonly elisionMap: Map<ts.SourceFile, Map<ImportOrExportDeclaration, ImportOrExportDeclaration>>;
   readonly transformationContext: ts.TransformationContext;
   readonly rootDirs?: string[];
   readonly excludeMatchers: IMinimatch[] | undefined;
+  readonly parsedCommandLine: ParsedCommandLine;
+  readonly outputFileNamesCache: Map<string, string>;
+  readonly pathsBasePath: string;
+  readonly getCanonicalFileName: GetCanonicalFileName;
 }
 
 export interface VisitorContext extends TsTransformPathsContext {
diff --git a/src/utils/general-utils.ts b/src/utils/general-utils.ts
index bcda80ba..5f4729aa 100755
--- a/src/utils/general-utils.ts
+++ b/src/utils/general-utils.ts
@@ -1,4 +1,3 @@
-import ts from "typescript";
 import url from "url";
 import path from "path";
 
@@ -7,21 +6,8 @@ import path from "path";
  * ****************************************************************************************************************** */
 
 export const isURL = (s: string): boolean => !!s && (!!url.parse(s).host || !!url.parse(s).hostname);
-export const isBaseDir = (base: string, dir: string) => path.relative(base, dir)?.[0] !== ".";
 export const cast = <T>(v: any): T => v;
-
-/**
- * @returns Array of implicit extensions, given CompilerOptions
- */
-export function getImplicitExtensions(options: ts.CompilerOptions) {
-  let res: string[] = [".ts", ".d.ts"];
-
-  let { allowJs, jsx } = options;
-  const allowJsx = !!jsx && (<any>jsx !== ts.JsxEmit.None);
-
-  allowJs && res.push(".js", ".cjs", ".mjs");
-  allowJsx && res.push(".tsx");
-  allowJs && allowJsx && res.push(".jsx");
-
-  return res;
-}
+export const isBaseDir = (baseDir: string, testDir: string): boolean => {
+  const relative = path.relative(baseDir, testDir);
+  return relative ? !relative.startsWith("..") && !path.isAbsolute(relative) : true;
+};
diff --git a/src/utils/resolve-module-name.ts b/src/utils/resolve-module-name.ts
new file mode 100755
index 00000000..efc0d9b6
--- /dev/null
+++ b/src/utils/resolve-module-name.ts
@@ -0,0 +1,151 @@
+import { VisitorContext } from "../types";
+import { isBaseDir, isURL } from "./general-utils";
+import * as path from "path";
+import { removeFileExtension, removeSuffix, ResolvedModuleFull } from "typescript";
+import { getOutputFile } from "./ts-helpers";
+
+/* ****************************************************************************************************************** */
+// region: Types
+/* ****************************************************************************************************************** */
+
+export interface ResolvedModule {
+  /**
+   * Absolute path to resolved module
+   */
+  resolvedPath: string | undefined;
+  /**
+   * Output path
+   */
+  outputPath: string;
+  /**
+   * Resolved to URL
+   */
+  isURL: boolean;
+}
+
+enum IndexType {
+  NonIndex,
+  Explicit,
+  Implicit,
+  ImplicitPackage,
+}
+
+// endregion
+
+/* ****************************************************************************************************************** */
+// region: Helpers
+/* ****************************************************************************************************************** */
+
+function getPathDetail(moduleName: string, resolvedModule: ResolvedModuleFull) {
+  let resolvedFileName = resolvedModule.originalPath ?? resolvedModule.resolvedFileName;
+  const implicitPackageIndex = resolvedModule.packageId?.subModuleName;
+
+  const resolvedDir = implicitPackageIndex
+    ? removeSuffix(resolvedFileName, `/${implicitPackageIndex}`)
+    : path.dirname(resolvedFileName);
+  const resolvedBaseName = implicitPackageIndex ? void 0 : path.basename(resolvedFileName);
+  const resolvedBaseNameNoExtension = resolvedBaseName && removeFileExtension(resolvedBaseName);
+  const resolvedExtName = resolvedBaseName && path.extname(resolvedFileName);
+
+  const baseName = !implicitPackageIndex ? path.basename(moduleName) : void 0;
+  const baseNameNoExtension = baseName && removeFileExtension(baseName);
+  const extName = baseName && path.extname(moduleName);
+
+  // prettier-ignore
+  const indexType =
+    implicitPackageIndex ? IndexType.ImplicitPackage :
+      baseNameNoExtension === 'index' && resolvedBaseNameNoExtension === 'index' ? IndexType.Explicit :
+        baseNameNoExtension !== 'index' && resolvedBaseNameNoExtension === 'index' ? IndexType.Implicit :
+          IndexType.NonIndex;
+
+  return {
+    baseName,
+    baseNameNoExtension,
+    extName,
+    resolvedBaseName,
+    resolvedBaseNameNoExtension,
+    resolvedExtName,
+    resolvedDir,
+    indexType,
+    implicitPackageIndex,
+    resolvedFileName,
+  };
+}
+
+// endregion
+
+/* ****************************************************************************************************************** */
+// region: Utils
+/* ****************************************************************************************************************** */
+
+/**
+ * Resolve a module name
+ */
+export function resolveModuleName(context: VisitorContext, moduleName: string): ResolvedModule | undefined {
+  const { tsInstance, compilerOptions, sourceFile, config, rootDirs } = context;
+  const { removeSuffix } = tsInstance;
+
+  // Attempt to resolve with TS Compiler API
+  const { resolvedModule, failedLookupLocations } = tsInstance.resolveModuleName(
+    moduleName,
+    sourceFile.fileName,
+    compilerOptions,
+    tsInstance.sys
+  );
+
+  // Handle non-resolvable module
+  if (!resolvedModule) {
+    const maybeURL = failedLookupLocations[0];
+    if (!isURL(maybeURL)) return void 0;
+    return {
+      isURL: true,
+      resolvedPath: void 0,
+      outputPath: maybeURL,
+    };
+  }
+
+  const {
+    indexType,
+    resolvedBaseNameNoExtension,
+    resolvedFileName,
+    implicitPackageIndex,
+    extName,
+    resolvedDir,
+  } = getPathDetail(moduleName, resolvedModule);
+
+  /* Determine output filename */
+  let outputBaseName = resolvedBaseNameNoExtension ?? "";
+
+  if (indexType === IndexType.Implicit) outputBaseName = removeSuffix(outputBaseName, "/index");
+  if (outputBaseName && extName) outputBaseName = `${outputBaseName}${extName}`;
+
+  /* Determine output dir */
+  let srcFileOutputDir = path.dirname(getOutputFile(context, sourceFile.fileName));
+  let moduleFileOutputDir = implicitPackageIndex ? resolvedDir : path.dirname(getOutputFile(context, resolvedFileName));
+
+  // Handle rootDirs remapping
+  if (config.useRootDirs && rootDirs) {
+    let fileRootDir = "";
+    let moduleRootDir = "";
+    for (const rootDir of rootDirs) {
+      if (isBaseDir(rootDir, moduleFileOutputDir) && rootDir.length > moduleRootDir.length) moduleRootDir = rootDir;
+      if (isBaseDir(rootDir, srcFileOutputDir) && rootDir.length > fileRootDir.length) fileRootDir = rootDir;
+    }
+
+    /* Remove base dirs to make relative to root */
+    if (fileRootDir && moduleRootDir) {
+      srcFileOutputDir = path.relative(fileRootDir, srcFileOutputDir);
+      moduleFileOutputDir = path.relative(moduleRootDir, moduleFileOutputDir);
+    }
+  }
+
+  const outputDir = path.relative(srcFileOutputDir, moduleFileOutputDir);
+
+  /* Compose final output path */
+  let outputPath = tsInstance.normalizePath(path.join(outputDir, outputBaseName));
+  outputPath = outputPath[0] === "." ? outputPath : `./${outputPath}`;
+
+  return { isURL: false, outputPath, resolvedPath: resolvedFileName };
+}
+
+// endregion
diff --git a/src/utils/resolve-path-update-node.ts b/src/utils/resolve-path-update-node.ts
index c5bda7e1..ecba900b 100755
--- a/src/utils/resolve-path-update-node.ts
+++ b/src/utils/resolve-path-update-node.ts
@@ -1,16 +1,8 @@
 import ts from "typescript";
-import tsThree from "../declarations/typescript3";
-import path from "path";
 import { VisitorContext } from "../types";
-import { isBaseDir, isURL } from "./general-utils";
-
-/* ****************************************************************************************************************** */
-// region: Config
-/* ****************************************************************************************************************** */
-
-const explicitExtensions = [".js", ".jsx", ".cjs", ".mjs"];
-
-// endregion
+import { isURL } from "./general-utils";
+import { isModulePathsMatch } from "./ts-helpers";
+import { resolveModuleName } from "./resolve-module-name";
 
 /* ****************************************************************************************************************** */
 // region: Node Updater Utility
@@ -23,116 +15,44 @@ export function resolvePathAndUpdateNode(
   context: VisitorContext,
   node: ts.Node,
   moduleName: string,
-  updaterFn: (newPath: ts.StringLiteral) => ts.Node | tsThree.Node | undefined
+  updaterFn: (newPath: ts.StringLiteral) => ts.Node | undefined
 ): ts.Node | undefined {
-  const { sourceFile, compilerOptions, tsInstance, config, implicitExtensions, factory } = context;
+  const { sourceFile, tsInstance, factory } = context;
+  const { normalizePath } = tsInstance;
+
+  /* Handle JSDoc statement tags */
   const tags = getStatementTags();
 
   // Skip if @no-transform-path specified
-  if (tags?.shouldSkip) return node;
+  if (tags.shouldSkip) return node;
+
+  // Accommodate direct override via @transform-path tag
+  if (tags.overridePath) {
+    let transformedPath = !isURL(tags.overridePath) ? normalizePath(tags.overridePath) : tags.overridePath;
+    transformedPath = transformedPath[0] === "." || isURL(transformedPath) ? transformedPath : `./${transformedPath}`;
+    return updaterFn(factory.createStringLiteral(transformedPath));
+  }
 
-  const resolutionResult = resolvePath(tags?.overridePath);
+  /* Resolve Module */
+  // Skip if no paths match found
+  if (!isModulePathsMatch(context, moduleName)) return node;
 
-  // Skip if can't be resolved
-  if (!resolutionResult || !resolutionResult.outputPath) return node;
+  const res = resolveModuleName(context, moduleName);
+  if (!res) return void 0;
 
-  const { outputPath, filePath } = resolutionResult;
+  const { outputPath, resolvedPath } = res;
 
-  // Check if matches exclusion
-  if (filePath && context.excludeMatchers)
-    for (const matcher of context.excludeMatchers) if (matcher.match(filePath)) return node;
+  /* Skip if matches exclusion */
+  if (context.excludeMatchers)
+    for (const matcher of context.excludeMatchers)
+      if (matcher.match(outputPath) || (resolvedPath && matcher.match(resolvedPath))) return node;
 
-  return updaterFn(factory.createStringLiteral(outputPath)) as ts.Node | undefined;
+  return updaterFn(factory.createStringLiteral(outputPath));
 
   /* ********************************************************* *
    * Helpers
    * ********************************************************* */
 
-  function resolvePath(overridePath: string | undefined): { outputPath: string; filePath?: string } | undefined {
-    /* Handle overridden path -- ie. @transform-path ../my/path) */
-    if (overridePath) {
-      return {
-        outputPath: filePathToOutputPath(overridePath, path.extname(overridePath)),
-        filePath: overridePath,
-      };
-    }
-
-    /* Have Compiler API attempt to resolve */
-    const { resolvedModule, failedLookupLocations } = tsInstance.resolveModuleName(
-      moduleName,
-      sourceFile.fileName,
-      compilerOptions,
-      tsInstance.sys
-    );
-
-    // No transform for node-modules
-    if (resolvedModule?.isExternalLibraryImport) return void 0;
-
-    /* Handle non-resolvable module */
-    if (!resolvedModule) {
-      const maybeURL = failedLookupLocations[0];
-      if (!isURL(maybeURL)) return void 0;
-      return { outputPath: maybeURL };
-    }
-
-    /* Handle resolved module */
-    const { extension, resolvedFileName } = resolvedModule;
-    return {
-      outputPath: filePathToOutputPath(resolvedFileName, extension),
-      filePath: resolvedFileName,
-    };
-  }
-
-  function filePathToOutputPath(filePath: string, extension: string | undefined) {
-    if (path.isAbsolute(filePath)) {
-      let sourceFileDir = tsInstance.normalizePath(path.dirname(sourceFile.fileName));
-      let moduleDir = path.dirname(filePath);
-
-      /* Handle rootDirs mapping */
-      if (config.useRootDirs && context.rootDirs) {
-        let fileRootDir = "";
-        let moduleRootDir = "";
-        for (const rootDir of context.rootDirs) {
-          if (isBaseDir(rootDir, filePath) && rootDir.length > moduleRootDir.length) moduleRootDir = rootDir;
-          if (isBaseDir(rootDir, sourceFile.fileName) && rootDir.length > fileRootDir.length) fileRootDir = rootDir;
-        }
-
-        /* Remove base dirs to make relative to root */
-        if (fileRootDir && moduleRootDir) {
-          sourceFileDir = path.relative(fileRootDir, sourceFileDir);
-          moduleDir = path.relative(moduleRootDir, moduleDir);
-        }
-      }
-
-      /* Make path relative */
-      filePath = tsInstance.normalizePath(path.join(path.relative(sourceFileDir, moduleDir), path.basename(filePath)));
-    }
-
-    /* Fixup filename */
-    if (extension) {
-      const isImplicitIndex =
-        path.basename(filePath, extension) === 'index' &&
-        path.basename(moduleName, path.extname(moduleName)) !== 'index';
-
-      // Remove implicit index
-      if (isImplicitIndex) filePath = path.dirname(filePath);
-      // Remove implicit extension
-      else if (implicitExtensions.includes(extension))
-        filePath = filePath.slice(0, -extension.length) + maybeGetExplicitExtension(filePath, extension);
-    }
-
-    return filePath[0] === "." || isURL(filePath) ? filePath : `./${filePath}`;
-  }
-
-  function maybeGetExplicitExtension(filePath: string, resolvedExtension: string): string {
-    const moduleExtension = path.extname(moduleName);
-    if (moduleExtension && !explicitExtensions.includes(moduleExtension)) return "";
-
-    return path.basename(moduleName, moduleExtension) === path.basename(filePath, resolvedExtension)
-      ? moduleExtension
-      : "";
-  }
-
   function getStatementTags() {
     let targetNode = tsInstance.isStatement(node)
       ? node
diff --git a/src/utils/ts-helpers.ts b/src/utils/ts-helpers.ts
new file mode 100755
index 00000000..4accc83f
--- /dev/null
+++ b/src/utils/ts-helpers.ts
@@ -0,0 +1,80 @@
+import ts, { ParsedCommandLine, Program } from 'typescript';
+import path from 'path';
+import { VisitorContext } from '../types';
+
+/* ****************************************************************************************************************** */
+// region: TS Helpers
+/* ****************************************************************************************************************** */
+
+/**
+ * Generates a ParsedCommandLine for Program
+ */
+export function createParsedCommandLineForProgram(tsInstance: typeof ts, program: Program): ParsedCommandLine {
+  const compilerOptions = program.getCompilerOptions();
+  const maybePcl: ParsedCommandLine | undefined = compilerOptions.configFilePath
+    ? tsInstance.getParsedCommandLineOfConfigFile(compilerOptions.configFilePath, {}, tsInstance.sys as any)
+    : void 0;
+
+  return (
+    maybePcl ??
+    tsInstance.parseJsonConfigFileContent(
+      { files: program.getRootFileNames(), compilerOptions },
+      tsInstance.sys as any,
+      program.getCurrentDirectory()
+    )
+  );
+}
+
+/**
+ * Determine output file path for source file
+ */
+export function getOutputFile(
+  context: VisitorContext,
+  fileName: string
+): string {
+  const { tsInstance, parsedCommandLine, outputFileNamesCache, program, compilerOptions } = context;
+  if (outputFileNamesCache.has(fileName)) return outputFileNamesCache.get(fileName)!;
+
+  let res: string | undefined = void 0;
+  const [tsMajor, tsMinor] = tsInstance.versionMajorMinor.split(".");
+
+  // TS 3.7+ supports getOutputFileNames
+  if (isTsProjectSourceFile(context, fileName) && (+tsMajor >= 4 || +tsMinor >= 7)) {
+    try {
+      res = tsInstance.getOutputFileNames(parsedCommandLine, fileName, tsInstance.sys?.useCaseSensitiveFileNames)[0];
+    } catch (e) {
+      console.warn(
+        `Failed to resolve output name for ${fileName}. Please report a GH issue at: `
+        + `https://github.com/LeDDGroup/typescript-transform-paths/issues`
+      );
+      debugger;
+    }
+  }
+
+  if (!res) res = manualResolve();
+
+  outputFileNamesCache.set(fileName, res);
+
+  return tsInstance.normalizePath(res);
+
+  function manualResolve(): string {
+    const srcDir = program.getCommonSourceDirectory();
+    const destDir = compilerOptions.outDir ?? srcDir;
+    return path.resolve(destDir, path.relative(srcDir, fileName));
+  }
+}
+
+/**
+ * Determine if moduleName matches config in paths
+ */
+export function isModulePathsMatch(context: VisitorContext, moduleName: string): boolean {
+  const { matchPatternOrExact, getOwnKeys } = context.tsInstance;
+  return !!matchPatternOrExact(getOwnKeys(context.compilerOptions.paths!), moduleName);
+}
+
+export function isTsProjectSourceFile(context: VisitorContext, filePath: string): boolean {
+  const { tsInstance, program } = context;
+  return !!program.getRootFileNames().find((f) => tsInstance.normalizePath(filePath) === tsInstance.normalizePath(f));
+}
+
+// endregion
diff --git a/test/projects/specific/src/index.ts b/test/projects/specific/src/index.ts
index dc8ca148..1dca9f24 100755
--- a/test/projects/specific/src/index.ts
+++ b/test/projects/specific/src/index.ts
@@ -24,4 +24,4 @@ export { GeneralConstB } from "#root/general.js";
 
 export const b = 3;
 
-export { ConstB } from '#elision'
+export { ConstB } from "#elision";
diff --git a/test/projects/specific/src/packages/pkg-a/index.d.ts b/test/projects/specific/src/packages/pkg-a/index.d.ts
new file mode 100755
index 00000000..cb6ca4d7
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-a/index.d.ts
@@ -0,0 +1,2 @@
+export type PackageAType = null
+export declare const packageAConst: PackageAType
diff --git a/test/projects/specific/src/packages/pkg-a/index.js b/test/projects/specific/src/packages/pkg-a/index.js
new file mode 100755
index 00000000..08f0c5a5
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-a/index.js
@@ -0,0 +1,3 @@
+module.exports = {
+  packageAConst: null,
+};
diff --git a/test/projects/specific/src/packages/pkg-a/package.json b/test/projects/specific/src/packages/pkg-a/package.json
new file mode 100755
index 00000000..b1207ef2
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-a/package.json
@@ -0,0 +1,6 @@
+{
+  "name": "pkg-a",
+  "version": "0.0.0-alpha",
+  "private": "true",
+  "main": "./index.js"
+}
diff --git a/test/projects/specific/src/packages/pkg-a/sub-pkg/main.d.ts b/test/projects/specific/src/packages/pkg-a/sub-pkg/main.d.ts
new file mode 100755
index 00000000..8a398064
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-a/sub-pkg/main.d.ts
@@ -0,0 +1,2 @@
+export type SubPackageType = null
+export declare const subPackageConst: SubPackageType
diff --git a/test/projects/specific/src/packages/pkg-a/sub-pkg/main.js b/test/projects/specific/src/packages/pkg-a/sub-pkg/main.js
new file mode 100755
index 00000000..18eb020b
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-a/sub-pkg/main.js
@@ -0,0 +1,3 @@
+module.exports = {
+  subPackageConst: null,
+};
diff --git a/test/projects/specific/src/packages/pkg-a/sub-pkg/package.json b/test/projects/specific/src/packages/pkg-a/sub-pkg/package.json
new file mode 100755
index 00000000..b53f2aed
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-a/sub-pkg/package.json
@@ -0,0 +1,6 @@
+{
+  "name": "sub-pkg",
+  "version": "0.0.0-alpha",
+  "private": "true",
+  "main": "main.js"
+}
diff --git a/test/projects/specific/src/packages/pkg-b/package.json b/test/projects/specific/src/packages/pkg-b/package.json
new file mode 100755
index 00000000..65a449b5
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-b/package.json
@@ -0,0 +1,6 @@
+{
+  "name": "pkg-b",
+  "version": "0.0.0-alpha",
+  "private": "true",
+  "main": "./subdir/main.js"
+}
diff --git a/test/projects/specific/src/packages/pkg-b/subdir/main.d.ts b/test/projects/specific/src/packages/pkg-b/subdir/main.d.ts
new file mode 100755
index 00000000..929df8c8
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-b/subdir/main.d.ts
@@ -0,0 +1,2 @@
+export type PackageBType = null
+export declare const packageBConst: PackageBType
diff --git a/test/projects/specific/src/packages/pkg-b/subdir/main.js b/test/projects/specific/src/packages/pkg-b/subdir/main.js
new file mode 100755
index 00000000..3b89af4b
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-b/subdir/main.js
@@ -0,0 +1,3 @@
+module.exports = {
+  packageBConst: null,
+};
diff --git a/test/projects/specific/src/packages/pkg-c/main.d.ts b/test/projects/specific/src/packages/pkg-c/main.d.ts
new file mode 100755
index 00000000..20249846
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-c/main.d.ts
@@ -0,0 +1,2 @@
+export type PackageCType = null
+export declare const packageCConst: PackageCType
diff --git a/test/projects/specific/src/packages/pkg-c/main.js b/test/projects/specific/src/packages/pkg-c/main.js
new file mode 100755
index 00000000..363f8780
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-c/main.js
@@ -0,0 +1,3 @@
+module.exports = {
+  packageCConst: null,
+};
diff --git a/test/projects/specific/src/packages/pkg-c/package.json b/test/projects/specific/src/packages/pkg-c/package.json
new file mode 100755
index 00000000..18b3a7df
--- /dev/null
+++ b/test/projects/specific/src/packages/pkg-c/package.json
@@ -0,0 +1,6 @@
+{
+  "name": "pkg-c",
+  "version": "0.0.0-alpha",
+  "private": "true",
+  "main": "./main.js"
+}
diff --git a/test/projects/specific/src/sub-packages.ts b/test/projects/specific/src/sub-packages.ts
new file mode 100755
index 00000000..36f16d60
--- /dev/null
+++ b/test/projects/specific/src/sub-packages.ts
@@ -0,0 +1,13 @@
+export { packageAConst, PackageAType } from "#packages/pkg-a";
+export { packageBConst, PackageBType } from "#packages/pkg-b";
+export { packageCConst, PackageCType } from "#packages/pkg-c";
+export { SubPackageType, subPackageConst } from "#packages/pkg-a/sub-pkg";
+
+// This path should resolve to './packages/pkg-c/main'
+export { packageCConst as C2 } from "#packages/pkg-c/main";
+// This path should resolve to './packages/pkg-c/main.js', due to explicit extension
+export { packageCConst as C3 } from "#packages/pkg-c/main.js";
+// This path should resolve to './packages/pkg-a/sub-pkg/main'
+export { subPackageConst as C4 } from "#packages/pkg-a/sub-pkg/main";
+// This path should resolve to './packages/pkg-a/sub-pkg/main.js', due to explicit extension
+export { subPackageConst as C5 } from "#packages/pkg-a/sub-pkg/main.js";
diff --git a/test/projects/specific/tsconfig.json b/test/projects/specific/tsconfig.json
index 03638111..4ea47cbb 100755
--- a/test/projects/specific/tsconfig.json
+++ b/test/projects/specific/tsconfig.json
@@ -17,7 +17,8 @@
       "#root/*": [ "./src/*", "./generated/*" ],
       "#exclusion/*": [ "./src/excluded/*" ],
       "#elision": [ "./src/type-elision" ],
-      "#elision/*": [ "./src/type-elision/*" ]
+      "#elision/*": [ "./src/type-elision/*" ],
+      "#packages/*": [ "./src/packages/*" ]
     },
     "resolveJsonModule": true
   }
diff --git a/test/tests/transformer/specific.test.ts b/test/tests/transformer/specific.test.ts
index c81f6f5a..1d90274f 100755
--- a/test/tests/transformer/specific.test.ts
+++ b/test/tests/transformer/specific.test.ts
@@ -25,6 +25,7 @@ describe(`Transformer -> Specific Cases`, () => {
   const indexFile = ts.normalizePath(path.join(projectRoot, "src/index.ts"));
   const tagFile = ts.normalizePath(path.join(projectRoot, "src/tags.ts"));
   const typeElisionIndex = ts.normalizePath(path.join(projectRoot, "src/type-elision/index.ts"));
+  const subPackagesFile = ts.normalizePath(path.join(projectRoot, "src/sub-packages.ts"));
   const baseConfig: TsTransformPathsConfig = { exclude: ["**/excluded/**", "excluded-file.*"] };
 
   describe.each(testTsModules)(`TypeScript %s`, (s, tsInstance) => {
@@ -135,7 +136,7 @@ describe(`Transformer -> Specific Cases`, () => {
       );
     });
 
-    test(`Preserves explicit js/jsx extensions`, () => {
+    test(`Preserves explicit extensions`, () => {
       expect(normalEmit[indexFile].js).toMatch(`export { JsonValue } from "./data.json";`);
       expect(normalEmit[indexFile].js).toMatch(`export { GeneralConstA } from "./general";`);
       expect(normalEmit[indexFile].js).toMatch(`export { GeneralConstB } from "./general.js";`);
@@ -148,5 +149,26 @@ describe(`Transformer -> Specific Cases`, () => {
       expect(normalEmit[indexFile].js).toMatch(`export { ConstB } from "./type-elision"`);
       expect(normalEmit[indexFile].dts).toMatch(`export { ConstB } from "./type-elision"`);
     });
+
+    test(`Resolves sub-modules properly`, () => {
+      const { js, dts } = normalEmit[subPackagesFile];
+      expect(js).toMatch(`export { packageBConst } from "./packages/pkg-b";`);
+      expect(js).toMatch(`export { packageAConst } from "./packages/pkg-a";`);
+      expect(js).toMatch(`export { packageCConst } from "./packages/pkg-c";`);
+      expect(js).toMatch(`export { subPackageConst } from "./packages/pkg-a/sub-pkg";`);
+      expect(js).toMatch(`export { packageCConst as C2 } from "./packages/pkg-c/main";`);
+      expect(js).toMatch(`export { packageCConst as C3 } from "./packages/pkg-c/main.js";`);
+      expect(js).toMatch(`export { subPackageConst as C4 } from "./packages/pkg-a/sub-pkg/main";`);
+      expect(js).toMatch(`export { subPackageConst as C5 } from "./packages/pkg-a/sub-pkg/main.js;"`);
+
+      expect(dts).toMatch(`export { packageAConst, PackageAType } from "./packages/pkg-a";`);
+      expect(dts).toMatch(`export { packageBConst, PackageBType } from "./packages/pkg-b";`);
+      expect(dts).toMatch(`export { packageCConst, PackageCType } from "./packages/pkg-c";`);
+      expect(dts).toMatch(`export { SubPackageType, subPackageConst } from "./packages/pkg-a/sub-pkg";`);
+      expect(dts).toMatch(`export { packageCConst as C2 } from "./packages/pkg-c/main";`);
+      expect(dts).toMatch(`export { packageCConst as C3 } from "./packages/pkg-c/main.js";`);
+      expect(dts).toMatch(`export { subPackageConst as C4 } from "./packages/pkg-a/sub-pkg/main";`);
+      expect(dts).toMatch(`export { subPackageConst as C5 } from "./packages/pkg-a/sub-pkg/main.js";`);
+    });
   });
 });