diff --git a/packages/react-scripts/package.json b/packages/react-scripts/package.json
index a5983f373c2..b513f6d41c7 100644
--- a/packages/react-scripts/package.json
+++ b/packages/react-scripts/package.json
@@ -1,6 +1,6 @@
 {
   "name": "react-scripts",
-  "version": "3.4.1",
+  "version": "3.4.2",
   "description": "Configuration and scripts for Create React App.",
   "repository": {
     "type": "git",
diff --git a/packages/react-scripts/scripts/init.js b/packages/react-scripts/scripts/init.js
index 58ffeb59c3f..42ef6c49b52 100644
--- a/packages/react-scripts/scripts/init.js
+++ b/packages/react-scripts/scripts/init.js
@@ -107,7 +107,9 @@ module.exports = function(
   }
 
   const templatePath = path.dirname(
-    require.resolve(`${templateName}/package.json`, { paths: [appPath] })
+    require.resolve(`${templateName}/package.json`, {
+      paths: [`${appPath}/node_modules`],
+    })
   );
 
   let templateJsonPath;