diff --git a/src/compiler/program.ts b/src/compiler/program.ts
index 9a4e26a2903..2ddf191a327 100644
--- a/src/compiler/program.ts
+++ b/src/compiler/program.ts
@@ -814,7 +814,7 @@ namespace ts {
         let projectReferenceRedirects: Map<ResolvedProjectReference | false> | undefined;
         let mapFromFileToProjectReferenceRedirects: Map<Path> | undefined;
         let mapFromToProjectReferenceRedirectSource: Map<SourceOfProjectReferenceRedirect> | undefined;
-        const useSourceOfReference = host.useSourceInsteadOfReferenceRedirect && host.useSourceInsteadOfReferenceRedirect();
+        const useSourceOfReference = useSourceInsteadOfReferenceRedirect(host);
 
         const shouldCreateNewSourceFile = shouldProgramCreateNewSourceFiles(oldProgram, options);
         const structuralIsReused = tryReuseStructureFromOldProgram();
diff --git a/src/compiler/utilities.ts b/src/compiler/utilities.ts
index 0e2488a0233..ecf7d431a2e 100644
--- a/src/compiler/utilities.ts
+++ b/src/compiler/utilities.ts
@@ -4614,6 +4614,10 @@ namespace ts {
                 return false;
         }
     }
+
+    export function useSourceInsteadOfReferenceRedirect(host: { useSourceInsteadOfReferenceRedirect?(): boolean; }) {
+        return host.useSourceInsteadOfReferenceRedirect && host.useSourceInsteadOfReferenceRedirect();
+    }
 }
 
 namespace ts {
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index 8c7462d857b..e379d1fda2c 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -2570,7 +2570,9 @@ namespace ts.server {
 
         /*@internal*/
         getOriginalLocationEnsuringConfiguredProject(project: Project, location: DocumentPosition): DocumentPosition | undefined {
-            const originalLocation = project.getSourceMapper().tryGetSourcePosition(location);
+            const originalLocation = useSourceInsteadOfReferenceRedirect(project) && project.getResolvedProjectReferenceToRedirect(location.fileName) ?
+                location :
+                project.getSourceMapper().tryGetSourcePosition(location);
             if (!originalLocation) return undefined;
 
             const { fileName } = originalLocation;
@@ -2581,7 +2583,8 @@ namespace ts.server {
             if (!configFileName) return undefined;
 
             const configuredProject = this.findConfiguredProjectByProjectName(configFileName) ||
-                this.createAndLoadConfiguredProject(configFileName, `Creating project for original file: ${originalFileInfo.fileName} for location: ${location.fileName}`);
+                this.createAndLoadConfiguredProject(configFileName, `Creating project for original file: ${originalFileInfo.fileName}${location !== originalLocation ? " for location " + location.fileName : ""}`);
+            if (configuredProject === project) return originalLocation;
             updateProjectIfDirty(configuredProject);
             // Keep this configured project as referenced from project
             addOriginalConfiguredProject(configuredProject);
diff --git a/src/server/project.ts b/src/server/project.ts
index 8f8e6e5da8e..c6c8ab84b20 100644
--- a/src/server/project.ts
+++ b/src/server/project.ts
@@ -196,6 +196,14 @@ namespace ts.server {
         /*@internal*/
         originalConfiguredProjects: Map<true> | undefined;
 
+        /*@internal*/
+        useSourceInsteadOfReferenceRedirect?: () => boolean;
+
+        /*@internal*/
+        getResolvedProjectReferenceToRedirect(_fileName: string): ResolvedProjectReference | undefined {
+            return undefined;
+        }
+
         private readonly cancellationToken: ThrottledCancellationToken;
 
         public isNonTsProject() {
@@ -1526,9 +1534,7 @@ namespace ts.server {
         }
 
         /* @internal */
-        useSourceInsteadOfReferenceRedirect() {
-            return !!this.languageServiceEnabled;
-        }
+        useSourceInsteadOfReferenceRedirect = () => !!this.languageServiceEnabled;
 
         fileExists(file: string): boolean {
             // Project references go to source file instead of .d.ts file
@@ -1590,6 +1596,12 @@ namespace ts.server {
             return program && program.forEachResolvedProjectReference(cb);
         }
 
+        /*@internal*/
+        getResolvedProjectReferenceToRedirect(fileName: string): ResolvedProjectReference | undefined {
+            const program = this.getCurrentProgram();
+            return program && program.getResolvedProjectReferenceToRedirect(fileName);
+        }
+
         /*@internal*/
         enablePluginsWithOptions(options: CompilerOptions, pluginConfigOverrides: Map<any> | undefined) {
             const host = this.projectService.host;
diff --git a/src/server/session.ts b/src/server/session.ts
index 5064b529560..792ec2cbce9 100644
--- a/src/server/session.ts
+++ b/src/server/session.ts
@@ -443,7 +443,9 @@ namespace ts.server {
 
     function getDefinitionInProject(definition: DocumentPosition | undefined, definingProject: Project, project: Project): DocumentPosition | undefined {
         if (!definition || project.containsFile(toNormalizedPath(definition.fileName))) return definition;
-        const mappedDefinition = definingProject.getLanguageService().getSourceMapper().tryGetGeneratedPosition(definition);
+        const mappedDefinition = useSourceInsteadOfReferenceRedirect(definingProject) && definingProject.getResolvedProjectReferenceToRedirect(definition.fileName) ?
+            definition :
+            definingProject.getLanguageService().getSourceMapper().tryGetGeneratedPosition(definition);
         return mappedDefinition && project.containsFile(toNormalizedPath(mappedDefinition.fileName)) ? mappedDefinition : undefined;
     }
 
@@ -472,7 +474,7 @@ namespace ts.server {
                     for (const symlinkedProject of symlinkedProjects) addToTodo({ project: symlinkedProject, location: originalLocation as TLocation }, toDo!, seenProjects);
                 });
             }
-            return originalLocation;
+            return originalLocation === location ? undefined : originalLocation;
         });
         return toDo;
     }
diff --git a/src/services/sourcemaps.ts b/src/services/sourcemaps.ts
index de590d4e5b4..c4c14e58686 100644
--- a/src/services/sourcemaps.ts
+++ b/src/services/sourcemaps.ts
@@ -72,9 +72,10 @@ namespace ts {
 
             const program = host.getProgram()!;
             // If this is source file of project reference source (instead of redirect) there is no generated position
-            if (host.useSourceInsteadOfReferenceRedirect &&
-                host.useSourceInsteadOfReferenceRedirect() &&
-                program.getResolvedProjectReferenceToRedirect(sourceFile.fileName)) return undefined;
+            if (useSourceInsteadOfReferenceRedirect(host) &&
+                program.getResolvedProjectReferenceToRedirect(sourceFile.fileName)) {
+                return undefined;
+            }
 
             const options = program.getCompilerOptions();
             const outPath = options.outFile || options.out;
diff --git a/src/testRunner/unittests/tsserver/events/projectLoading.ts b/src/testRunner/unittests/tsserver/events/projectLoading.ts
index 7a881ff1380..53fe28240f8 100644
--- a/src/testRunner/unittests/tsserver/events/projectLoading.ts
+++ b/src/testRunner/unittests/tsserver/events/projectLoading.ts
@@ -110,7 +110,7 @@ namespace ts.projectSystem {
                 checkNumberOfProjects(service, { configuredProjects: 2 });
                 const project = service.configuredProjects.get(configA.path)!;
                 assert.isDefined(project);
-                verifyEvent(project, `Creating project for original file: ${aTs.path} for location: ${aDTs.path}`);
+                verifyEvent(project, `Creating project for original file: ${aTs.path}`);
             });
 
             describe("with external projects and config files ", () => {