diff --git a/lib/spec/openapi/utils.js b/lib/spec/openapi/utils.js
index 5583022d..509e1561 100644
--- a/lib/spec/openapi/utils.js
+++ b/lib/spec/openapi/utils.js
@@ -99,7 +99,10 @@ function transformDefsToComponents (jsonSchema) {
           jsonSchema[key][prop] = transformDefsToComponents(jsonSchema[key][prop])
         })
       } else if (key === '$ref') {
+        // replace the top-lvl path
         jsonSchema[key] = jsonSchema[key].replace('definitions', 'components/schemas')
+        // replace the path for nested defs
+        jsonSchema[key] = jsonSchema[key].replaceAll('definitions', 'properties')
       } else if (key === 'examples' && Array.isArray(jsonSchema[key]) && (jsonSchema[key].length > 1)) {
         jsonSchema.examples = convertExamplesArrayToObject(jsonSchema.examples)
       } else if (key === 'examples' && Array.isArray(jsonSchema[key]) && (jsonSchema[key].length === 1)) {
@@ -402,16 +405,34 @@ function prepareOpenapiSchemas (schemas, ref) {
   return Object.entries(schemas)
     .reduce((res, [name, schema]) => {
       const _ = { ...schema }
-      const resolved = transformDefsToComponents(ref.resolve(_, { externalSchemas: [schemas] }))
 
-      // Swagger doesn't accept $id on /definitions schemas.
-      // The $ids are needed by Ref() to check the URI so we need
-      // to remove them at the end of the process
-      // definitions are added by resolve but they are replace by components.schemas
-      delete resolved.$id
-      delete resolved.definitions
+      // 'definitions' keyword is not supported by openapi in schema item
+      // but we can receive it from json-schema input
+      if (_.definitions) {
+        _.properties = {
+          ..._.properties,
+          ..._.definitions
+        }
+      }
+
+      // ref.resolve call does 3 things:
+      // modifies underlying cache of ref
+      // adds 'definitions' with resolved schema(which we don't need here anymore)
+      // mutates $ref to point to the resolved schema
+      // ($ref will be mutated again by transformDefsToComponents)
+      const resolvedRef = ref.resolve(_, { externalSchemas: [schemas] })
+
+      // swagger doesn't accept $id on components schemas
+      // $ids are needed by ref.resolve to check the URI
+      // definitions are added by resolve, but they are not needed, as we resolve
+      // the $ref to already existing schemas in components.schemas using method below, not the definition ones
+      // therefore, we delete both $id and definitions at the end of the process
+      delete resolvedRef.$id
+      delete resolvedRef.definitions
+
+      const components = transformDefsToComponents(resolvedRef)
 
-      res[name] = resolved
+      res[name] = components
       return res
     }, {})
 }
diff --git a/test/spec/openapi/refs.js b/test/spec/openapi/refs.js
index a7d758ef..0481385f 100644
--- a/test/spec/openapi/refs.js
+++ b/test/spec/openapi/refs.js
@@ -282,3 +282,42 @@ test('uses examples if has property required in body', async (t) => {
   t.ok(schema.parameters)
   t.same(schema.parameters[0].in, 'query')
 })
+
+test('support schema with definitions keyword and $ref inside', async (t) => {
+  const fastify = Fastify()
+
+  await fastify.register(fastifySwagger, openapiOption)
+  fastify.register(async (instance) => {
+    instance.addSchema({
+      $id: 'NestedSchema',
+      definitions: {
+        SchemaA: {
+          type: 'object',
+          properties: {
+            id: { type: 'string' }
+          }
+        },
+        SchemaB: {
+          type: 'object',
+          properties: {
+            example: { $ref: 'NestedSchema#/definitions/SchemaA' }
+          }
+        }
+      }
+    })
+    instance.post('/url1', { schema: { body: { $ref: 'NestedSchema#/definitions/SchemaB' }, response: { 200: { $ref: 'NestedSchema#/definitions/SchemaA' } } } }, () => {})
+  })
+
+  await fastify.ready()
+
+  const openapiObject = fastify.swagger()
+  t.equal(typeof openapiObject, 'object')
+  t.match(Object.keys(openapiObject.components.schemas), ['NestedSchema'])
+  t.match(Object.keys(openapiObject.components.schemas.NestedSchema), ['properties'])
+  t.match(Object.keys(openapiObject.components.schemas.NestedSchema.properties), ['SchemaA', 'SchemaB'])
+
+  //  ref must be prefixed by '#/components/schemas/'
+  t.equal(openapiObject.components.schemas.NestedSchema.properties.SchemaB.properties.example.$ref, '#/components/schemas/NestedSchema/properties/SchemaA')
+
+  await Swagger.validate(openapiObject)
+})