diff --git a/.github/workflows/ci.yml b/.github/workflows/ci.yml
index b0aadf9..5ffee54 100644
--- a/.github/workflows/ci.yml
+++ b/.github/workflows/ci.yml
@@ -18,6 +18,9 @@ jobs:
       matrix:
         node-version: [18.x, 20.x, 21.x]
         os: [ubuntu-latest, windows-latest]
+        exclude:
+          - os: windows-latest
+            node-version: 21.x
     steps:
       - uses: actions/checkout@v4
 
diff --git a/fixtures/monorepo/package-lock.json b/fixtures/monorepo/package-lock.json
new file mode 100644
index 0000000..244287a
--- /dev/null
+++ b/fixtures/monorepo/package-lock.json
@@ -0,0 +1,35 @@
+{
+  "name": "project-build",
+  "version": "1.0.0",
+  "lockfileVersion": 3,
+  "requires": true,
+  "packages": {
+    "": {
+      "name": "project-build",
+      "version": "1.0.0",
+      "license": "ISC",
+      "workspaces": [
+        "package*"
+      ]
+    },
+    "node_modules/package1": {
+      "resolved": "package1",
+      "link": true
+    },
+    "node_modules/package2": {
+      "resolved": "package2",
+      "link": true
+    },
+    "package1": {
+      "version": "1.0.0",
+      "license": "ISC"
+    },
+    "package2": {
+      "version": "1.0.0",
+      "license": "ISC",
+      "dependencies": {
+        "package1": "file:../package1"
+      }
+    }
+  }
+}
diff --git a/fixtures/monorepo/package.json b/fixtures/monorepo/package.json
new file mode 100644
index 0000000..3f2d277
--- /dev/null
+++ b/fixtures/monorepo/package.json
@@ -0,0 +1,15 @@
+{
+  "name": "project-build",
+  "version": "1.0.0",
+  "description": "",
+  "main": "index.js",
+  "scripts": {
+    "test": "echo \"Error: no test specified\" && exit 1"
+  },
+  "keywords": [],
+  "author": "",
+  "workspaces": [
+    "package*"
+  ],
+  "license": "ISC"
+}
diff --git a/fixtures/monorepo/package1/package.json b/fixtures/monorepo/package1/package.json
new file mode 100644
index 0000000..13423f6
--- /dev/null
+++ b/fixtures/monorepo/package1/package.json
@@ -0,0 +1,13 @@
+{
+  "name": "package1",
+  "version": "1.0.0",
+  "description": "",
+  "main": "dist/src/lib/add.js",
+  "types": "dist/src/lib/add.d.ts",
+  "scripts": {
+    "test": "echo \"Error: no test specified\" && exit 1"
+  },
+  "keywords": [],
+  "author": "",
+  "license": "ISC"
+}
diff --git a/fixtures/monorepo/package1/src/lib/add.ts b/fixtures/monorepo/package1/src/lib/add.ts
new file mode 100644
index 0000000..95c44a7
--- /dev/null
+++ b/fixtures/monorepo/package1/src/lib/add.ts
@@ -0,0 +1,4 @@
+
+export function add (x: number, y: number): number {
+  return x + y
+}
diff --git a/fixtures/monorepo/package1/src/test/add.test.ts b/fixtures/monorepo/package1/src/test/add.test.ts
new file mode 100644
index 0000000..efd7568
--- /dev/null
+++ b/fixtures/monorepo/package1/src/test/add.test.ts
@@ -0,0 +1,7 @@
+import { test } from 'node:test'
+import { add } from '../lib/add.js'
+import { strictEqual } from 'node:assert'
+
+test('add', () => {
+  strictEqual(add(1, 2), 3)
+})
diff --git a/fixtures/monorepo/package1/src/test/add2.test.ts b/fixtures/monorepo/package1/src/test/add2.test.ts
new file mode 100644
index 0000000..d938558
--- /dev/null
+++ b/fixtures/monorepo/package1/src/test/add2.test.ts
@@ -0,0 +1,7 @@
+import { test } from 'node:test'
+import { add } from '../lib/add.js'
+import { strictEqual } from 'node:assert'
+
+test('add2', () => {
+  strictEqual(add(3, 2), 5)
+})
diff --git a/fixtures/monorepo/package1/tsconfig.json b/fixtures/monorepo/package1/tsconfig.json
new file mode 100644
index 0000000..305bde5
--- /dev/null
+++ b/fixtures/monorepo/package1/tsconfig.json
@@ -0,0 +1,10 @@
+{
+    "$schema": "https://json.schemastore.org/tsconfig",
+    "extends": "../tsconfig.base.json",
+    "compilerOptions": {
+      "outDir": "./dist"
+    },
+    "references": [
+    ]
+  }
+  
\ No newline at end of file
diff --git a/fixtures/monorepo/package2/package.json b/fixtures/monorepo/package2/package.json
new file mode 100644
index 0000000..5965e85
--- /dev/null
+++ b/fixtures/monorepo/package2/package.json
@@ -0,0 +1,15 @@
+{
+  "name": "package2",
+  "version": "1.0.0",
+  "description": "",
+  "main": "index.js",
+  "scripts": {
+    "test": "echo \"Error: no test specified\" && exit 1"
+  },
+  "dependencies": {
+    "package1": "file:../package1"
+  },
+  "keywords": [],
+  "author": "",
+  "license": "ISC"
+}
diff --git a/fixtures/monorepo/package2/src/lib/add.ts b/fixtures/monorepo/package2/src/lib/add.ts
new file mode 100644
index 0000000..9987d46
--- /dev/null
+++ b/fixtures/monorepo/package2/src/lib/add.ts
@@ -0,0 +1,4 @@
+import { add as add2 } from 'package1'
+export function add (x: number, y: number): number {
+  return add2(x, y)
+}
diff --git a/fixtures/monorepo/package2/src/test/add.test.ts b/fixtures/monorepo/package2/src/test/add.test.ts
new file mode 100644
index 0000000..2fd45fc
--- /dev/null
+++ b/fixtures/monorepo/package2/src/test/add.test.ts
@@ -0,0 +1,7 @@
+import { test } from 'node:test'
+import { add } from '../lib/add.js'
+import { strictEqual } from 'node:assert'
+
+test('package2-add', () => {
+  strictEqual(add(1, 2), 3)
+})
diff --git a/fixtures/monorepo/package2/src/test/add2.test.ts b/fixtures/monorepo/package2/src/test/add2.test.ts
new file mode 100644
index 0000000..89e190c
--- /dev/null
+++ b/fixtures/monorepo/package2/src/test/add2.test.ts
@@ -0,0 +1,7 @@
+import { test } from 'node:test'
+import { add } from '../lib/add.js'
+import { strictEqual } from 'node:assert'
+
+test('package2-add2', () => {
+  strictEqual(add(3, 2), 5)
+})
diff --git a/fixtures/monorepo/package2/tsconfig.json b/fixtures/monorepo/package2/tsconfig.json
new file mode 100644
index 0000000..df3ecf5
--- /dev/null
+++ b/fixtures/monorepo/package2/tsconfig.json
@@ -0,0 +1,11 @@
+{
+    "$schema": "https://json.schemastore.org/tsconfig",
+    "extends": "../tsconfig.base.json",
+    "compilerOptions": {
+      "outDir": "./dist"
+    },
+    "references": [
+      { "path": "../package1" }
+    ]
+  }
+  
\ No newline at end of file
diff --git a/fixtures/monorepo/tsconfig.base.json b/fixtures/monorepo/tsconfig.base.json
new file mode 100644
index 0000000..9e6283c
--- /dev/null
+++ b/fixtures/monorepo/tsconfig.base.json
@@ -0,0 +1,24 @@
+{
+  "$schema": "https://json.schemastore.org/tsconfig",
+  "compilerOptions": {
+    "sourceMap": true,
+    "target": "ES2022",
+    "composite": true,
+    "module": "NodeNext",
+    "moduleResolution": "NodeNext",
+    "esModuleInterop": true,
+    "strict": true,
+    "resolveJsonModule": true,
+    "removeComments": true,
+    "newLine": "lf",
+    "noUnusedLocals": true,
+    "noFallthroughCasesInSwitch": true,
+    "isolatedModules": true,
+    "forceConsistentCasingInFileNames": true,
+    "skipLibCheck": true,
+    "lib": [
+      "ESNext"
+    ],
+    "incremental": true
+  }
+}
diff --git a/fixtures/monorepo/tsconfig.json b/fixtures/monorepo/tsconfig.json
new file mode 100644
index 0000000..22054e7
--- /dev/null
+++ b/fixtures/monorepo/tsconfig.json
@@ -0,0 +1,7 @@
+{
+  "files": [],
+  "references": [
+    { "path": "package1" },
+    { "path": "package2" }
+  ]
+}
diff --git a/lib/run.js b/lib/run.js
index e7a9841..90cd231 100644
--- a/lib/run.js
+++ b/lib/run.js
@@ -27,8 +27,10 @@ export default async function runWithTypeScript (config) {
 
   let prefix = ''
   let tscPath
+  const typescriptCliArgs = []
 
   if (tsconfigPath && config.typescript !== false) {
+    const tsconfig = JSON.parse(await readFile(tsconfigPath))
     const _require = createRequire(tsconfigPath)
     const typescriptPathCWD = _require.resolve('typescript')
     tscPath = join(typescriptPathCWD, '..', '..', 'bin', 'tsc')
@@ -38,19 +40,22 @@ export default async function runWithTypeScript (config) {
 
       // Watch is handled aftterwards
       if (!config.watch) {
+        if (Array.isArray(tsconfig.references) && tsconfig.references.length > 0) {
+          typescriptCliArgs.push('--build')
+        }
         const start = Date.now()
-        await execa('node', [tscPath], { cwd: dirname(tsconfigPath) })
+        await execa('node', [tscPath, ...typescriptCliArgs], { cwd: dirname(tsconfigPath) })
         process.stdout.write(`TypeScript compilation complete (${Date.now() - start}ms)\n`)
         pushable.push({
           type: 'test:diagnostic',
           data: {
             nesting: 0,
-            message: `TypeScript compilation complete (${Date.now() - start}ms)`
+            message: `TypeScript compilation complete (${Date.now() - start}ms)`,
+            typescriptCliArgs
           }
         })
       }
     }
-    const tsconfig = JSON.parse(await readFile(tsconfigPath))
     const outDir = tsconfig.compilerOptions.outDir
     if (outDir) {
       prefix = join(dirname(tsconfigPath), outDir)
@@ -83,17 +88,21 @@ export default async function runWithTypeScript (config) {
   let p
 
   if (config.watch) {
+    typescriptCliArgs.push('--watch')
     p = deferred()
-    const start = Date.now()
-    tscChild = execa('node', [tscPath, '--watch'], { cwd })
+    let start = Date.now()
+    tscChild = execa('node', [tscPath, ...typescriptCliArgs], { cwd })
     tscChild.stdout.setEncoding('utf8')
     tscChild.stdout.on('data', (data) => {
-      if (data.includes('Watching for file changes')) {
+      if (data.includes('File change detected')) {
+        start = Date.now()
+      } else if (data.includes('Watching for file changes')) {
         pushable.push({
           type: 'test:diagnostic',
           data: {
             nesting: 0,
-            message: `TypeScript compilation complete (${Date.now() - start}ms)`
+            message: `TypeScript compilation complete (${Date.now() - start}ms)`,
+            typescriptCliArgs
           }
         })
 
diff --git a/test/basic.test.js b/test/basic.test.js
index 3972300..6885c62 100644
--- a/test/basic.test.js
+++ b/test/basic.test.js
@@ -2,6 +2,7 @@ import { test } from 'node:test'
 import { tspl } from '@matteo.collina/tspl'
 import runWithTypeScript from '../lib/run.js'
 import { join } from 'desm'
+import { execa } from 'execa'
 
 test('ts-esm', async (t) => {
   const { strictEqual, completed, match } = tspl(t, { plan: 4 })
@@ -141,7 +142,31 @@ test('src-to-dist', async (t) => {
 
   await completed
 })
+test('monorepo', async (t) => {
+  const { strictEqual, completed, match, deepEqual } = tspl(t, { plan: 5 })
+  const config = {
+    files: [],
+    cwd: join(import.meta.url, '..', 'fixtures', 'monorepo/package2')
+  }
+
+  await execa('npm', ['install'], { cwd: join(import.meta.url, '..', 'fixtures', 'monorepo') })
+  const stream = await runWithTypeScript(config)
+
+  const names = new Set(['package2-add', 'package2-add2'])
+
+  stream.once('data', (test) => {
+    strictEqual(test.type, 'test:diagnostic')
+    match(test.data.message, /TypeScript compilation complete \(\d+ms\)/)
+    deepEqual(test.data.typescriptCliArgs, ['--build'])
+  })
 
+  stream.on('test:pass', (test) => {
+    strictEqual(names.has(test.name), true)
+    names.delete(test.name)
+  })
+
+  await completed
+})
 test('only-src', async (t) => {
   const { strictEqual, completed, match } = tspl(t, { plan: 4 })
   const config = {