When resolving references, the Ivy compiler has a few strategies it could use. For relative path, one of strategies is [`RelativePathStrategy`]( https://github.com/angular/angular/blob/master/packages/compiler-cli/src/ ngtsc/imports/README.md#relativepathstrategy). This strategy relies on `compilerOptions.rootDir` and `compilerOptions.rootDirs` to perform the resolution, but language service only passes `rootDirs` to the compiler, and not `rootDir`. In reality, `rootDir` is very different from `rootDirs` even though they sound the same. According to the official [TS documentation][1], > `rootDir` specifies the root directory of input files. Only use to control > the output directory structure with --outDir. > `rootDirs` is a list of root folders whose combined content represent the > structure of the project at runtime. See [Module Resolution documentation]( > https://www.typescriptlang.org/docs/handbook/ > module-resolution.html#virtual-directories-with-rootdirs) > for more details. For now, we keep the behavior between compiler and language service consistent, but we will revisit the notion of `rootDir` and how it is used later. Fix angular/vscode-ng-language-service#1039 [1]: https://www.typescriptlang.org/docs/handbook/compiler-options.html PR Close #40243