diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index c70477b4a17..703add00025 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -2358,7 +2358,7 @@ namespace ts {
             if (sourceFile === undefined) {
                 return undefined;
             }
-
+            sourceFile.path = toPath(refPath);
             const commandLine = parseJsonSourceFileConfigFileContent(sourceFile, configParsingHost, basePath, /*existingOptions*/ undefined, refPath);
             return { commandLine, sourceFile };
         }
diff --git a/src/compiler/sourcemapDecoder.ts b/src/compiler/sourcemapDecoder.ts
index 76f5943be66..28cbbe39cf5 100644
--- a/src/compiler/sourcemapDecoder.ts
+++ b/src/compiler/sourcemapDecoder.ts
@@ -100,7 +100,8 @@ namespace ts.sourcemaps {
             // Lookup file in program, if provided
             const path = toPath(fileName, location, host.getCanonicalFileName);
             const file = program && program.getSourceFile(path);
-            if (!file) {
+            // file returned here could be .d.ts when asked for .ts file if projectReferences and module resolution created this source file
+            if (!file || file.resolvedPath !== path) {
                 // Otherwise check the cache (which may hit disk)
                 return fallbackCache.get(path);
             }
@@ -373,4 +374,4 @@ namespace ts.sourcemaps {
             encodedText.charCodeAt(pos) === CharacterCodes.comma ||
             encodedText.charCodeAt(pos) === CharacterCodes.semicolon);
     }
-}
\ No newline at end of file
+}
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index d841669b07b..a0ea670dc7c 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -2243,6 +2243,20 @@ namespace ts.server {
                     toRemoveConfiguredProjects.delete(project.canonicalConfigFilePath);
                     markOriginalProjectsAsUsed(project);
                 }
+                else {
+                    // If the configured project for project reference has more than zero references, keep it alive
+                    const resolvedProjectReferences = project.getResolvedProjectReferences();
+                    if (resolvedProjectReferences) {
+                        for (const ref of resolvedProjectReferences) {
+                            if (ref) {
+                                const refProject = this.configuredProjects.get(ref.sourceFile.path);
+                                if (refProject && refProject.hasOpenRef()) {
+                                    toRemoveConfiguredProjects.delete(project.canonicalConfigFilePath);
+                                }
+                            }
+                        }
+                    }
+                }
             });
 
             // Remove all the non marked projects
diff --git a/src/server/project.ts b/src/server/project.ts
index a8db5d80511..6cbe97db7be 100644
--- a/src/server/project.ts
+++ b/src/server/project.ts
@@ -572,6 +572,14 @@ namespace ts.server {
                 for (const f of this.program.getSourceFiles()) {
                     this.detachScriptInfoIfNotRoot(f.fileName);
                 }
+                const projectReferences = this.program.getProjectReferences();
+                if (projectReferences) {
+                    for (const ref of projectReferences) {
+                        if (ref) {
+                            this.detachScriptInfoFromProject(ref.sourceFile.fileName);
+                        }
+                    }
+                }
             }
             // Release external files
             forEach(this.externalFiles, externalFile => this.detachScriptInfoIfNotRoot(externalFile));
@@ -1367,6 +1375,12 @@ namespace ts.server {
             this.projectReferences = refs;
         }
 
+        /*@internal*/
+        getResolvedProjectReferences() {
+            const program = this.getCurrentProgram();
+            return program && program.getProjectReferences();
+        }
+
         enablePlugins() {
             const host = this.projectService.host;
             const options = this.getCompilationSettings();
diff --git a/src/testRunner/unittests/tsserverProjectSystem.ts b/src/testRunner/unittests/tsserverProjectSystem.ts
index 7ae8fea9d59..eb6b5cdfe90 100644
--- a/src/testRunner/unittests/tsserverProjectSystem.ts
+++ b/src/testRunner/unittests/tsserverProjectSystem.ts
@@ -9183,8 +9183,21 @@ export function Test2() {
             content: 'import { fnA, instanceA } from "../a/bin/a";\nimport { fnB } from "../b/bin/b";\nexport function fnUser() { fnA(); fnB(); instanceA; }',
         };
 
-        function makeSampleProjects() {
-            const host = createServerHost([aTs, aTsconfig, aDtsMap, aDts, bTsconfig, bTs, bDtsMap, bDts, userTs, dummyFile]);
+        const userTsForConfigProject: File = {
+            path: "/user/user.ts",
+            content: 'import { fnA, instanceA } from "../a/a";\nimport { fnB } from "../b/b";\nexport function fnUser() { fnA(); fnB(); instanceA; }',
+        };
+
+        const userTsconfig: File = {
+            path: "/user/tsconfig.json",
+            content: JSON.stringify({
+                file: ["user.ts"],
+                references: [{ path: "../a" }, { path: "../b" }]
+            })
+        };
+
+        function makeSampleProjects(addUserTsConfig?: boolean) {
+            const host = createServerHost([aTs, aTsconfig, aDtsMap, aDts, bTsconfig, bTs, bDtsMap, bDts, ...(addUserTsConfig ? [userTsForConfigProject, userTsconfig] : [userTs]), dummyFile]);
             const session = createSession(host);
 
             checkDeclarationFiles(aTs, session, [aDtsMap, aDts]);
@@ -9195,7 +9208,7 @@ export function Test2() {
 
             openFilesForSession([userTs], session);
             const service = session.getProjectService();
-            checkNumberOfProjects(service, { inferredProjects: 1 });
+            checkNumberOfProjects(service, addUserTsConfig ? { configuredProjects: 1 } : { inferredProjects: 1 });
             return session;
         }
 
@@ -9247,6 +9260,10 @@ export function Test2() {
             verifyATsConfigProject(session); // ATsConfig should still be alive
         }
 
+        function verifyUserTsConfigProject(session: TestSession) {
+            checkProjectActualFiles(session.getProjectService().configuredProjects.get(userTsconfig.path)!, [userTs.path, aDts.path, userTsconfig.path]);
+        }
+
         it("goToDefinition", () => {
             const session = makeSampleProjects();
             const response = executeSessionRequest<protocol.DefinitionRequest, protocol.DefinitionResponse>(session, protocol.CommandTypes.Definition, protocolFileLocationFromSubstring(userTs, "fnA()"));
@@ -9264,6 +9281,29 @@ export function Test2() {
             verifySingleInferredProject(session);
         });
 
+        it("getDefinitionAndBoundSpan with file navigation", () => {
+            const session = makeSampleProjects(/*addUserTsConfig*/ true);
+            const response = executeSessionRequest<protocol.DefinitionAndBoundSpanRequest, protocol.DefinitionAndBoundSpanResponse>(session, protocol.CommandTypes.DefinitionAndBoundSpan, protocolFileLocationFromSubstring(userTs, "fnA()"));
+            assert.deepEqual(response, {
+                textSpan: protocolTextSpanFromSubstring(userTs.content, "fnA", { index: 1 }),
+                definitions: [protocolFileSpanFromSubstring(aTs, "fnA")],
+            });
+            checkNumberOfProjects(session.getProjectService(), { configuredProjects: 1 }); debugger;
+            verifyUserTsConfigProject(session);
+
+            // Navigate to the definition
+            closeFilesForSession([userTs], session);
+            openFilesForSession([aTs], session);
+
+            // UserTs configured project should be alive
+            checkNumberOfProjects(session.getProjectService(), { configuredProjects: 2 });
+            verifyUserTsConfigProject(session);
+            verifyATsConfigProject(session);
+
+            closeFilesForSession([aTs], session);
+            verifyOnlyOrphanInferredProject(session);
+        });
+
         it("goToType", () => {
             const session = makeSampleProjects();
             const response = executeSessionRequest<protocol.TypeDefinitionRequest, protocol.TypeDefinitionResponse>(session, protocol.CommandTypes.TypeDefinition, protocolFileLocationFromSubstring(userTs, "instanceA"));