diff --git a/packages/schematics/angular/library/files/tsconfig.lib.json.template b/packages/schematics/angular/library/files/tsconfig.lib.json.template
index 869212b917f4..79a2168d3492 100644
--- a/packages/schematics/angular/library/files/tsconfig.lib.json.template
+++ b/packages/schematics/angular/library/files/tsconfig.lib.json.template
@@ -9,6 +9,9 @@
     "inlineSources": true,
     "types": []
   },
+  "include": [
+    "src/**/*.ts"
+  ],
   "exclude": [
     "**/*.spec.ts"
   ]
diff --git a/packages/schematics/angular/library/files/tsconfig.spec.json.template b/packages/schematics/angular/library/files/tsconfig.spec.json.template
index 4fd01f8f600c..11ab3b8614ff 100644
--- a/packages/schematics/angular/library/files/tsconfig.spec.json.template
+++ b/packages/schematics/angular/library/files/tsconfig.spec.json.template
@@ -9,7 +9,6 @@
     ]
   },
   "include": [
-    "**/*.spec.ts",
-    "**/*.d.ts"
+    "src/**/*.ts"
   ]
 }
diff --git a/packages/schematics/angular/library/index.ts b/packages/schematics/angular/library/index.ts
index 52ca74bc65ce..b409d986dd57 100644
--- a/packages/schematics/angular/library/index.ts
+++ b/packages/schematics/angular/library/index.ts
@@ -43,6 +43,21 @@ function updateTsConfig(packageName: string, ...paths: string[]) {
   };
 }
 
+function addTsProjectReference(...paths: string[]) {
+  return (host: Tree) => {
+    if (!host.exists('tsconfig.json')) {
+      return host;
+    }
+
+    const newReferences = paths.map((path) => ({ path }));
+
+    const file = new JSONFile(host, 'tsconfig.json');
+    const jsonPath = ['references'];
+    const value = file.get(jsonPath);
+    file.modify(jsonPath, Array.isArray(value) ? [...value, ...newReferences] : newReferences);
+  };
+}
+
 function addDependenciesToPackageJson() {
   return (host: Tree) => {
     [
@@ -162,6 +177,12 @@ export default function (options: LibraryOptions): Rule {
       addLibToWorkspaceFile(options, libDir, packageName),
       options.skipPackageJson ? noop() : addDependenciesToPackageJson(),
       options.skipTsConfig ? noop() : updateTsConfig(packageName, './' + distRoot),
+      options.skipTsConfig
+        ? noop()
+        : addTsProjectReference(
+            './' + join(libDir, 'tsconfig.lib.json'),
+            './' + join(libDir, 'tsconfig.spec.json'),
+          ),
       options.standalone
         ? noop()
         : schematic('module', {
diff --git a/packages/schematics/angular/library/index_spec.ts b/packages/schematics/angular/library/index_spec.ts
index caedfb2b1739..1d5503d70b38 100644
--- a/packages/schematics/angular/library/index_spec.ts
+++ b/packages/schematics/angular/library/index_spec.ts
@@ -293,6 +293,24 @@ describe('Library Schematic', () => {
 
       const tsConfigJson = getJsonFileContent(tree, 'tsconfig.json');
       expect(tsConfigJson.compilerOptions.paths).toBeUndefined();
+      expect(tsConfigJson.references).not.toContain(
+        jasmine.objectContaining({ path: './projects/foo/tsconfig.lib.json' }),
+      );
+      expect(tsConfigJson.references).not.toContain(
+        jasmine.objectContaining({ path: './projects/foo/tsconfig.spec.json' }),
+      );
+    });
+
+    it('should add project references in the root tsconfig.json', async () => {
+      const tree = await schematicRunner.runSchematic('library', defaultOptions, workspaceTree);
+
+      const { references } = getJsonFileContent(tree, '/tsconfig.json');
+      expect(references).toContain(
+        jasmine.objectContaining({ path: './projects/foo/tsconfig.lib.json' }),
+      );
+      expect(references).toContain(
+        jasmine.objectContaining({ path: './projects/foo/tsconfig.spec.json' }),
+      );
     });
   });