diff --git a/src/compiler/moduleSpecifiers.ts b/src/compiler/moduleSpecifiers.ts
index 57df15b5ee0..b173bb13364 100644
--- a/src/compiler/moduleSpecifiers.ts
+++ b/src/compiler/moduleSpecifiers.ts
@@ -319,33 +319,30 @@ namespace ts.moduleSpecifiers {
             return undefined;
         }
 
-        let packageJsonContent: any | undefined;
-        const packageRootPath = moduleFileName.substring(0, parts.packageRootIndex);
+        // Simplify the full file path to something that can be resolved by Node.
+
+        let moduleSpecifier = moduleFileName;
         if (!packageNameOnly) {
-            const packageJsonPath = combinePaths(packageRootPath, "package.json");
-            packageJsonContent = host.fileExists(packageJsonPath)
-                ? JSON.parse(host.readFile(packageJsonPath)!)
-                : undefined;
-            const versionPaths = packageJsonContent && packageJsonContent.typesVersions
-                ? getPackageJsonTypesVersionsPaths(packageJsonContent.typesVersions)
-                : undefined;
-            if (versionPaths) {
-                const subModuleName = moduleFileName.slice(parts.packageRootIndex + 1);
-                const fromPaths = tryGetModuleNameFromPaths(
-                    removeFileExtension(subModuleName),
-                    removeExtensionAndIndexPostFix(subModuleName, Ending.Minimal, options),
-                    versionPaths.paths
-                );
-                if (fromPaths !== undefined) {
-                    moduleFileName = combinePaths(moduleFileName.slice(0, parts.packageRootIndex), fromPaths);
+            let packageRootIndex = parts.packageRootIndex;
+            let moduleFileNameForExtensionless: string | undefined;
+            while (true) {
+                // If the module could be imported by a directory name, use that directory's name
+                const { moduleFileToTry, packageRootPath } = tryDirectoryWithPackageJson(packageRootIndex);
+                if (packageRootPath) {
+                    moduleSpecifier = packageRootPath;
+                    break;
+                }
+                if (!moduleFileNameForExtensionless) moduleFileNameForExtensionless = moduleFileToTry;
+
+                // try with next level of directory
+                packageRootIndex = moduleFileName.indexOf(directorySeparator, packageRootIndex + 1);
+                if (packageRootIndex === -1) {
+                    moduleSpecifier = getExtensionlessFileName(moduleFileNameForExtensionless);
+                    break;
                 }
             }
         }
 
-        // Simplify the full file path to something that can be resolved by Node.
-
-        // If the module could be imported by a directory name, use that directory's name
-        const moduleSpecifier = packageNameOnly ? moduleFileName : getDirectoryOrExtensionlessFileName(moduleFileName);
         const globalTypingsCacheLocation = host.getGlobalTypingsCacheLocation && host.getGlobalTypingsCacheLocation();
         // Get a path that's relative to node_modules or the importing file's path
         // if node_modules folder is in this folder or any of its parent folders, no need to keep it.
@@ -360,18 +357,40 @@ namespace ts.moduleSpecifiers {
         // For classic resolution, only allow importing from node_modules/@types, not other node_modules
         return getEmitModuleResolutionKind(options) !== ModuleResolutionKind.NodeJs && packageName === nodeModulesDirectoryName ? undefined : packageName;
 
-        function getDirectoryOrExtensionlessFileName(path: string): string {
-            // If the file is the main module, it can be imported by the package name
-            if (packageJsonContent) {
+        function tryDirectoryWithPackageJson(packageRootIndex: number) {
+            const packageRootPath = moduleFileName.substring(0, packageRootIndex);
+            const packageJsonPath = combinePaths(packageRootPath, "package.json");
+            let moduleFileToTry = moduleFileName;
+            if (host.fileExists(packageJsonPath)) {
+                const packageJsonContent = JSON.parse(host.readFile!(packageJsonPath)!);
+                const versionPaths = packageJsonContent.typesVersions
+                    ? getPackageJsonTypesVersionsPaths(packageJsonContent.typesVersions)
+                    : undefined;
+                if (versionPaths) {
+                    const subModuleName = moduleFileName.slice(packageRootPath.length + 1);
+                    const fromPaths = tryGetModuleNameFromPaths(
+                        removeFileExtension(subModuleName),
+                        removeExtensionAndIndexPostFix(subModuleName, Ending.Minimal, options),
+                        versionPaths.paths
+                    );
+                    if (fromPaths !== undefined) {
+                        moduleFileToTry = combinePaths(packageRootPath, fromPaths);
+                    }
+                }
+
+                // If the file is the main module, it can be imported by the package name
                 const mainFileRelative = packageJsonContent.typings || packageJsonContent.types || packageJsonContent.main;
                 if (isString(mainFileRelative)) {
                     const mainExportFile = toPath(mainFileRelative, packageRootPath, getCanonicalFileName);
-                    if (removeFileExtension(mainExportFile) === removeFileExtension(getCanonicalFileName(path))) {
-                        return packageRootPath;
+                    if (removeFileExtension(mainExportFile) === removeFileExtension(getCanonicalFileName(moduleFileToTry))) {
+                        return { packageRootPath, moduleFileToTry };
                     }
                 }
             }
+            return { moduleFileToTry };
+        }
 
+        function getExtensionlessFileName(path: string): string {
             // We still have a file name - remove the extension
             const fullModulePathWithoutExtension = removeFileExtension(path);
 
diff --git a/tests/cases/fourslash/importFixesWithPackageJsonInSideAnotherPackage.ts b/tests/cases/fourslash/importFixesWithPackageJsonInSideAnotherPackage.ts
new file mode 100644
index 00000000000..73522574b46
--- /dev/null
+++ b/tests/cases/fourslash/importFixesWithPackageJsonInSideAnotherPackage.ts
@@ -0,0 +1,36 @@
+/// <reference path="fourslash.ts" />
+
+// @Filename: /project/tsconfig.json
+////{
+////  "compilerOptions": {
+////    "jsx": "react",
+////    "jsxFactory": "h"
+////  }
+////}
+
+// @Filename: /project/app.tsx
+////const state = useMemo(() => 'Hello', []);
+
+// @Filename: /project/component.tsx
+////import { useEffect } from "preact/hooks";
+
+// @Filename: /project/node_modules/preact/package.json
+////{ "name": "preact", "version": "10.3.4", "types": "src/index.d.ts" }
+
+// @Filename: /project/node_modules/preact/hooks/package.json
+////{ "name": "hooks", "version": "0.1.0", "types": "src/index.d.ts" }
+
+// @Filename: /project/node_modules/preact/hooks/src/index.d.ts
+////export function useEffect(): void;
+////export function useMemo<T>(factory: () => T, inputs: ReadonlyArray<unknown> | undefined): T;
+
+goTo.file("/project/app.tsx");
+verify.importFixAtPosition([
+    getImportFixContent("preact/hooks"),
+]);
+
+function getImportFixContent(from: string) {
+    return `import { useMemo } from "${from}";
+
+const state = useMemo(() => 'Hello', []);`;
+}