diff --git a/src/compiler/sourcemapDecoder.ts b/src/compiler/sourcemapDecoder.ts
index 28cbbe39cf5..dd0d65c8092 100644
--- a/src/compiler/sourcemapDecoder.ts
+++ b/src/compiler/sourcemapDecoder.ts
@@ -57,6 +57,7 @@ namespace ts.sourcemaps {
         fileExists(path: string): boolean;
         getCanonicalFileName(path: string): string;
         log(text: string): void;
+        useCaseSensitiveFileNames: boolean;
     }
 
     export function decode(host: SourceMapDecodeHost, mapPath: string, map: SourceMapData, program?: Program, fallbackCache = createSourceFileLikeCache(host)): SourceMapper {
@@ -79,7 +80,7 @@ namespace ts.sourcemaps {
                 // if no exact match, closest is 2's compliment of result
                 targetIndex = ~targetIndex;
             }
-            if (!maps[targetIndex] || comparePaths(loc.fileName, maps[targetIndex].sourcePath, sourceRoot) !== 0) {
+            if (!maps[targetIndex] || comparePaths(loc.fileName, maps[targetIndex].sourcePath, sourceRoot, !host.useCaseSensitiveFileNames) !== 0) {
                 return loc;
             }
             return { fileName: toPath(map.file!, sourceRoot, host.getCanonicalFileName), position: maps[targetIndex].emittedPosition }; // Closest pos
@@ -129,7 +130,7 @@ namespace ts.sourcemaps {
         }
 
         function compareProcessedPositionSourcePositions(a: ProcessedSourceMapPosition, b: ProcessedSourceMapPosition) {
-            return comparePaths(a.sourcePath, b.sourcePath, sourceRoot) ||
+            return comparePaths(a.sourcePath, b.sourcePath, sourceRoot, !host.useCaseSensitiveFileNames) ||
                 compareValues(a.sourcePosition, b.sourcePosition);
         }
 
diff --git a/src/services/services.ts b/src/services/services.ts
index 4367bd11985..afcdc7b4f16 100644
--- a/src/services/services.ts
+++ b/src/services/services.ts
@@ -1139,7 +1139,7 @@ namespace ts {
         const useCaseSensitiveFileNames = hostUsesCaseSensitiveFileNames(host);
         const getCanonicalFileName = createGetCanonicalFileName(useCaseSensitiveFileNames);
 
-        const sourceMapper = getSourceMapper(getCanonicalFileName, currentDirectory, log, host, () => program);
+        const sourceMapper = getSourceMapper(useCaseSensitiveFileNames, currentDirectory, log, host, () => program);
 
         function getValidSourceFile(fileName: string): SourceFile {
             const sourceFile = program.getSourceFile(fileName);
diff --git a/src/services/sourcemaps.ts b/src/services/sourcemaps.ts
index 1833c415be4..25e6fb9c124 100644
--- a/src/services/sourcemaps.ts
+++ b/src/services/sourcemaps.ts
@@ -13,12 +13,13 @@ namespace ts {
     }
 
     export function getSourceMapper(
-        getCanonicalFileName: GetCanonicalFileName,
+        useCaseSensitiveFileNames: boolean,
         currentDirectory: string,
         log: (message: string) => void,
         host: LanguageServiceHost,
         getProgram: () => Program,
     ): SourceMapper {
+        const getCanonicalFileName = createGetCanonicalFileName(useCaseSensitiveFileNames);
         let sourcemappedFileCache: SourceFileLikeCache;
         return { tryGetOriginalLocation, tryGetGeneratedLocation, toLineColumnOffset, clearCache };
 
@@ -56,6 +57,7 @@ namespace ts {
             return file.sourceMapper = sourcemaps.decode({
                 readFile: s => host.readFile!(s), // TODO: GH#18217
                 fileExists: s => host.fileExists!(s), // TODO: GH#18217
+                useCaseSensitiveFileNames,
                 getCanonicalFileName,
                 log,
             }, mapFileName, maps, getProgram(), sourcemappedFileCache);
@@ -105,7 +107,11 @@ namespace ts {
 
         function tryGetGeneratedLocation(info: sourcemaps.SourceMappableLocation): sourcemaps.SourceMappableLocation | undefined {
             const program = getProgram();
-            const declarationPath = getDeclarationEmitOutputFilePathWorker(info.fileName, program.getCompilerOptions(), currentDirectory, program.getCommonSourceDirectory(), getCanonicalFileName);
+            const options = program.getCompilerOptions();
+            const outPath = options.outFile || options.out;
+            const declarationPath = outPath ?
+                removeFileExtension(outPath) + Extension.Dts :
+                getDeclarationEmitOutputFilePathWorker(info.fileName, program.getCompilerOptions(), currentDirectory, program.getCommonSourceDirectory(), getCanonicalFileName);
             if (declarationPath === undefined) return undefined;
             const declarationFile = getFile(declarationPath);
             if (!declarationFile) return undefined;
diff --git a/src/testRunner/unittests/tsserverProjectSystem.ts b/src/testRunner/unittests/tsserverProjectSystem.ts
index 9f569f46d4d..28d39ccf032 100644
--- a/src/testRunner/unittests/tsserverProjectSystem.ts
+++ b/src/testRunner/unittests/tsserverProjectSystem.ts
@@ -10481,13 +10481,15 @@ declare class TestLib {
                 TestFSWithWatch.getTsBuildProjectFile(project, "index.ts"),
             ];
         }
-        it("does not error on container only project", () => {
-            const project = "container";
-            const containerLib = getProjectFiles("container/lib");
-            const containerExec = getProjectFiles("container/exec");
-            const containerCompositeExec = getProjectFiles("container/compositeExec");
-            const containerConfig = TestFSWithWatch.getTsBuildProjectFile(project, "tsconfig.json");
-            const files = [libFile, ...containerLib, ...containerExec, ...containerCompositeExec, containerConfig];
+
+        const project = "container";
+        const containerLib = getProjectFiles("container/lib");
+        const containerExec = getProjectFiles("container/exec");
+        const containerCompositeExec = getProjectFiles("container/compositeExec");
+        const containerConfig = TestFSWithWatch.getTsBuildProjectFile(project, "tsconfig.json");
+        const files = [libFile, ...containerLib, ...containerExec, ...containerCompositeExec, containerConfig];
+
+        function createHost() {
             const host = createServerHost(files);
 
             // ts build should succeed
@@ -10495,6 +10497,12 @@ declare class TestLib {
             solutionBuilder.buildAllProjects();
             assert.equal(host.getOutput().length, 0);
 
+            return host;
+        }
+
+        it("does not error on container only project", () => {
+            const host = createHost();
+
             // Open external project for the folder
             const session = createSession(host);
             const service = session.getProjectService();
@@ -10521,6 +10529,30 @@ declare class TestLib {
                 assert.deepEqual(semanticDiagnostics, []);
             });
         });
+
+        it("can successfully find references with --out options", () => {
+            const host = createHost();
+            const session = createSession(host);
+            openFilesForSession([containerCompositeExec[1]], session);
+            const service = session.getProjectService();
+            checkNumberOfProjects(service, { configuredProjects: 1 });
+            const locationOfMyConst = protocolLocationFromSubstring(containerCompositeExec[1].content, "myConst");
+            const response = session.executeCommandSeq<protocol.RenameRequest>({
+                command: protocol.CommandTypes.Rename,
+                arguments: {
+                    file: containerCompositeExec[1].path,
+                    ...locationOfMyConst
+               }
+            }).response as protocol.RenameResponseBody;
+
+
+            const myConstLen = "myConst".length;
+            const locationOfMyConstInLib = protocolLocationFromSubstring(containerLib[1].content, "myConst");
+            assert.deepEqual(response.locs, [
+                { file: containerCompositeExec[1].path, locs: [{ start: locationOfMyConst, end: { line: locationOfMyConst.line, offset: locationOfMyConst.offset + myConstLen } }] },
+                { file: containerLib[1].path, locs: [{ start: locationOfMyConstInLib, end: { line: locationOfMyConstInLib.line, offset: locationOfMyConstInLib.offset + myConstLen } }] }
+            ]);
+        });
     });
 
     describe("tsserverProjectSystem duplicate packages", () => {
diff --git a/tests/projects/container/compositeExec/tsconfig.json b/tests/projects/container/compositeExec/tsconfig.json
index f28a9e44eee..4f44b8a562d 100644
--- a/tests/projects/container/compositeExec/tsconfig.json
+++ b/tests/projects/container/compositeExec/tsconfig.json
@@ -1,7 +1,8 @@
 {
     "compilerOptions": {
         "outFile": "../built/local/compositeExec.js",
-        "composite": true
+        "composite": true,
+        "declarationMap": true
     },
     "files": [
         "index.ts"