diff --git a/src/Microsoft.OpenApi.Readers/V3/OpenApiV3VersionService.cs b/src/Microsoft.OpenApi.Readers/V3/OpenApiV3VersionService.cs
index 1e729f30a..ebe372d40 100644
--- a/src/Microsoft.OpenApi.Readers/V3/OpenApiV3VersionService.cs
+++ b/src/Microsoft.OpenApi.Readers/V3/OpenApiV3VersionService.cs
@@ -109,6 +109,8 @@ public OpenApiReference ConvertToOpenApiReference(
                     }
                     // Where fragments point into a non-OpenAPI document, the id will be the complete fragment identifier
                     string id = segments[1];
+                    var openApiReference = new OpenApiReference();
+
                     // $ref: externalSource.yaml#/Pet
                     if (id.StartsWith("/components/"))
                     {
@@ -127,13 +129,16 @@ public OpenApiReference ConvertToOpenApiReference(
                         }
                         id = localSegments[3];
                     }
-
-                    return new OpenApiReference
+                    else
                     {
-                        ExternalResource = segments[0],
-                        Type = type,
-                        Id = id
-                    };
+                        openApiReference.IsFragrament = true;
+                    }
+
+                    openApiReference.ExternalResource = segments[0];
+                    openApiReference.Type = type;
+                    openApiReference.Id = id;
+
+                    return openApiReference;
                 }
             }
 
diff --git a/src/Microsoft.OpenApi/Models/OpenApiReference.cs b/src/Microsoft.OpenApi/Models/OpenApiReference.cs
index ecc643dc3..e8798cc64 100644
--- a/src/Microsoft.OpenApi/Models/OpenApiReference.cs
+++ b/src/Microsoft.OpenApi/Models/OpenApiReference.cs
@@ -45,6 +45,11 @@ public class OpenApiReference : IOpenApiSerializable
         /// </summary>
         public bool IsLocal => ExternalResource == null;
 
+        /// <summary>
+        /// Gets a flag indicating whether a file is a valid OpenAPI document or a fragment
+        /// </summary>
+        public bool IsFragrament = false;
+
         /// <summary>
         /// The OpenApiDocument that is hosting the OpenApiReference instance. This is used to enable dereferencing the reference.
         /// </summary>
@@ -196,7 +201,12 @@ private string GetExternalReferenceV3()
         {
             if (Id != null)
             {
-                    return ExternalResource + "#/components/" + Type.GetDisplayName() + "/"+ Id;
+                if (IsFragrament)
+                {
+                    return ExternalResource + "#" + Id;
+                }
+                
+                return ExternalResource + "#/components/" + Type.GetDisplayName() + "/"+ Id;
             }
 
             return ExternalResource;
diff --git a/test/Microsoft.OpenApi.Readers.Tests/Microsoft.OpenApi.Readers.Tests.csproj b/test/Microsoft.OpenApi.Readers.Tests/Microsoft.OpenApi.Readers.Tests.csproj
index 2e73118b2..b5d1167f3 100644
--- a/test/Microsoft.OpenApi.Readers.Tests/Microsoft.OpenApi.Readers.Tests.csproj
+++ b/test/Microsoft.OpenApi.Readers.Tests/Microsoft.OpenApi.Readers.Tests.csproj
@@ -149,6 +149,9 @@
       <EmbeddedResource Include="V3Tests\Samples\OpenApiDocument\petStoreWithTagAndSecurity.yaml">
         <CopyToOutputDirectory>Never</CopyToOutputDirectory>
       </EmbeddedResource>
+      <EmbeddedResource Include="V3Tests\Samples\OpenApiDocument\documentWithExternalRefs.yaml">
+        <CopyToOutputDirectory>Never</CopyToOutputDirectory>
+      </EmbeddedResource>
       <EmbeddedResource Include="V3Tests\Samples\OpenApiDocument\securedApi.yaml" />
       <EmbeddedResource Include="V3Tests\Samples\OpenApiEncoding\advancedEncoding.yaml">
         <CopyToOutputDirectory>Never</CopyToOutputDirectory>
diff --git a/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiDocumentTests.cs b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiDocumentTests.cs
index 6fbb7065a..362609291 100644
--- a/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiDocumentTests.cs
+++ b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiDocumentTests.cs
@@ -6,6 +6,7 @@
 using System.Globalization;
 using System.IO;
 using System.Linq;
+using System.Text;
 using System.Threading;
 using FluentAssertions;
 using Microsoft.OpenApi.Any;
@@ -1327,5 +1328,24 @@ public void HeaderParameterShouldAllowExample()
                     });
             }
         }
+
+        [Fact]
+        public void DoesNotChangeExternalReferences()
+        {
+            // Arrange
+            using var stream = Resources.GetStream(Path.Combine(SampleFolderPath, "documentWithExternalRefs.yaml"));
+            
+            // Act
+            var doc = new OpenApiStreamReader(
+                new OpenApiReaderSettings { ReferenceResolution = ReferenceResolutionSetting.DoNotResolveReferences})
+                .Read(stream, out var diagnostic);
+
+            var externalRef = doc.Components.Schemas["Nested"].Properties["AnyOf"].AnyOf.First().Reference.ReferenceV3;
+            var externalRef2 = doc.Components.Schemas["Nested"].Properties["AnyOf"].AnyOf.Last().Reference.ReferenceV3;
+
+            // Assert
+            Assert.Equal("file:///C:/MySchemas.json#/definitions/ArrayObject", externalRef);
+            Assert.Equal("../foo/schemas.yaml#/components/schemas/Number", externalRef2);
+        }
     }
 }
diff --git a/test/Microsoft.OpenApi.Readers.Tests/V3Tests/Samples/OpenApiDocument/documentWithExternalRefs.yaml b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/Samples/OpenApiDocument/documentWithExternalRefs.yaml
new file mode 100644
index 000000000..c0b7b3a25
--- /dev/null
+++ b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/Samples/OpenApiDocument/documentWithExternalRefs.yaml
@@ -0,0 +1,16 @@
+    openapi: 3.0.1
+    info:
+      title: anyOf-oneOf
+      license:
+        name: MIT
+      version: 1.0.0
+    paths: { }
+    components:
+      schemas:
+        Nested:
+          type: object
+          properties:
+            AnyOf:
+              anyOf:
+                - $ref: file:///C:/MySchemas.json#/definitions/ArrayObject
+                - $ref: ../foo/schemas.yaml#/components/schemas/Number     
\ No newline at end of file
diff --git a/test/Microsoft.OpenApi.Tests/PublicApi/PublicApi.approved.txt b/test/Microsoft.OpenApi.Tests/PublicApi/PublicApi.approved.txt
index 75e12f480..4eb7a060d 100755
--- a/test/Microsoft.OpenApi.Tests/PublicApi/PublicApi.approved.txt
+++ b/test/Microsoft.OpenApi.Tests/PublicApi/PublicApi.approved.txt
@@ -773,6 +773,7 @@ namespace Microsoft.OpenApi.Models
     }
     public class OpenApiReference : Microsoft.OpenApi.Interfaces.IOpenApiElement, Microsoft.OpenApi.Interfaces.IOpenApiSerializable
     {
+        public bool IsFragrament;
         public OpenApiReference() { }
         public OpenApiReference(Microsoft.OpenApi.Models.OpenApiReference reference) { }
         public string ExternalResource { get; set; }