diff --git a/src/compiler/types.ts b/src/compiler/types.ts
index 30a0dc4e7e952..d9468bd51234e 100644
--- a/src/compiler/types.ts
+++ b/src/compiler/types.ts
@@ -8058,7 +8058,7 @@ namespace ts {
         readonly importModuleSpecifierEnding?: "auto" | "minimal" | "index" | "js";
         readonly allowTextChangesInNewFiles?: boolean;
         readonly providePrefixAndSuffixTextForRename?: boolean;
-        readonly includePackageJsonAutoImports?: "exclude-dev" | "all" | "none";
+        readonly includePackageJsonAutoImports?: "auto" | "on" | "off";
         readonly provideRefactorNotApplicableReason?: boolean;
     }
 
diff --git a/src/server/editorServices.ts b/src/server/editorServices.ts
index fc79dc7c49159..236751b2b0198 100644
--- a/src/server/editorServices.ts
+++ b/src/server/editorServices.ts
@@ -3825,9 +3825,9 @@ namespace ts.server {
         /*@internal*/
         includePackageJsonAutoImports(): PackageJsonAutoImportPreference {
             switch (this.hostConfiguration.preferences.includePackageJsonAutoImports) {
-                case "none": return PackageJsonAutoImportPreference.None;
-                case "all": return PackageJsonAutoImportPreference.All;
-                default: return PackageJsonAutoImportPreference.ExcludeDevDependencies;
+                case "on": return PackageJsonAutoImportPreference.On;
+                case "off": return PackageJsonAutoImportPreference.Off;
+                default: return PackageJsonAutoImportPreference.Auto;
             }
         }
 
diff --git a/src/server/project.ts b/src/server/project.ts
index 16f3178d7f786..e868005544229 100644
--- a/src/server/project.ts
+++ b/src/server/project.ts
@@ -1631,11 +1631,11 @@ namespace ts.server {
 
         /*@internal*/
         includePackageJsonAutoImports(): PackageJsonAutoImportPreference {
-            if (this.projectService.includePackageJsonAutoImports() === PackageJsonAutoImportPreference.None ||
+            if (this.projectService.includePackageJsonAutoImports() === PackageJsonAutoImportPreference.Off ||
                 !this.languageServiceEnabled ||
                 isInsideNodeModules(this.currentDirectory) ||
                 !this.isDefaultProjectForOpenFiles()) {
-                return PackageJsonAutoImportPreference.None;
+                return PackageJsonAutoImportPreference.Off;
             }
             return this.projectService.includePackageJsonAutoImports();
         }
@@ -1831,6 +1831,9 @@ namespace ts.server {
     export class AutoImportProviderProject extends Project {
         private static readonly newName = createProjectNameFactoryWithCounter(makeAutoImportProviderProjectName);
 
+        /*@internal*/
+        private static readonly maxDependencies = 10;
+
         /*@internal*/
         static getRootFileNames(dependencySelection: PackageJsonAutoImportPreference, hostProject: Project, moduleResolutionHost: ModuleResolutionHost, compilerOptions: CompilerOptions): string[] {
             if (!dependencySelection) {
@@ -1844,9 +1847,6 @@ namespace ts.server {
             for (const packageJson of packageJsons) {
                 packageJson.dependencies?.forEach((_, dependenyName) => addDependency(dependenyName));
                 packageJson.peerDependencies?.forEach((_, dependencyName) => addDependency(dependencyName));
-                if (dependencySelection === PackageJsonAutoImportPreference.All) {
-                    packageJson.devDependencies?.forEach((_, dependencyName) => addDependency(dependencyName));
-                }
             }
 
             if (dependencyNames) {
@@ -1862,6 +1862,10 @@ namespace ts.server {
                     const fileName = moduleResolutionHost.realpath?.(resolvedFileName) || resolvedFileName;
                     if (!hostProject.getCurrentProgram()!.getSourceFile(fileName) && !hostProject.getCurrentProgram()!.getSourceFile(resolvedFileName)) {
                         rootNames = append(rootNames, fileName);
+                        // Avoid creating a large project that would significantly slow down time to editor interactivity
+                        if (dependencySelection === PackageJsonAutoImportPreference.Auto && rootNames.length > this.maxDependencies) {
+                            return ts.emptyArray;
+                        }
                     }
                 }
             }
@@ -1877,7 +1881,7 @@ namespace ts.server {
 
         /*@internal*/
         static create(dependencySelection: PackageJsonAutoImportPreference, hostProject: Project, moduleResolutionHost: ModuleResolutionHost, documentRegistry: DocumentRegistry): AutoImportProviderProject | undefined {
-            if (dependencySelection === PackageJsonAutoImportPreference.None) {
+            if (dependencySelection === PackageJsonAutoImportPreference.Off) {
                 return undefined;
             }
 
@@ -1974,7 +1978,7 @@ namespace ts.server {
 
         /*@internal*/
         includePackageJsonAutoImports() {
-            return PackageJsonAutoImportPreference.None;
+            return PackageJsonAutoImportPreference.Off;
         }
 
         getTypeAcquisition(): TypeAcquisition {
diff --git a/src/server/protocol.ts b/src/server/protocol.ts
index cdeaad1a4fc22..b288124049e67 100644
--- a/src/server/protocol.ts
+++ b/src/server/protocol.ts
@@ -3218,7 +3218,7 @@ namespace ts.server.protocol {
         readonly lazyConfiguredProjectsFromExternalProject?: boolean;
         readonly providePrefixAndSuffixTextForRename?: boolean;
         readonly allowRenameOfImportPath?: boolean;
-        readonly includePackageJsonAutoImports?: "exclude-dev" | "all" | "none";
+        readonly includePackageJsonAutoImports?: "auto" | "on" | "off";
     }
 
     export interface CompilerOptions {
diff --git a/src/services/types.ts b/src/services/types.ts
index 0ebd80372cbea..41884a729c4e8 100644
--- a/src/services/types.ts
+++ b/src/services/types.ts
@@ -211,9 +211,9 @@ namespace ts {
 
     /* @internal */
     export const enum PackageJsonAutoImportPreference {
-        None,
-        ExcludeDevDependencies,
-        All
+        Off,
+        On,
+        Auto,
     }
 
     export interface PerformanceEvent {
diff --git a/src/testRunner/unittests/tsserver/autoImportProvider.ts b/src/testRunner/unittests/tsserver/autoImportProvider.ts
index 031af230c5239..3325f88e958ee 100644
--- a/src/testRunner/unittests/tsserver/autoImportProvider.ts
+++ b/src/testRunner/unittests/tsserver/autoImportProvider.ts
@@ -229,6 +229,26 @@ namespace ts.projectSystem {
             host.writeFile(packageJson.path, packageJson.content);
             assert.ok(projectService.configuredProjects.get(tsconfig.path)!.getLanguageService().getAutoImportProvider());
         });
+
+        it("Does not create an auto import provider if there are too many dependencies", () => {
+            const createPackage = (i: number): File[] => ([
+                { path: `/node_modules/package${i}/package.json`, content: `{ "name": "package${i}" }` },
+                { path: `/node_modules/package${i}/index.d.ts`, content: `` }
+            ]);
+
+            const packages = [];
+            for (let i = 0; i < 11; i++) {
+                packages.push(createPackage(i));
+            }
+
+            const dependencies = packages.reduce((hash, p) => ({ ...hash, [JSON.parse(p[0].content).name]: "*" }), {});
+            const packageJson: File = { path: "/package.json", content: JSON.stringify(dependencies) };
+            const { projectService, session } = setup([ ...flatten(packages), indexTs, tsconfig, packageJson ]);
+
+            openFilesForSession([indexTs], session);
+            const project = projectService.configuredProjects.get(tsconfig.path)!;
+            assert.isUndefined(project.getPackageJsonAutoImportProvider());
+        });
     });
 
     describe("unittests:: tsserver:: autoImportProvider - monorepo", () => {
diff --git a/src/testRunner/unittests/tsserver/cachingFileSystemInformation.ts b/src/testRunner/unittests/tsserver/cachingFileSystemInformation.ts
index c3fcfb5192ce1..b4a6c2f12f20a 100644
--- a/src/testRunner/unittests/tsserver/cachingFileSystemInformation.ts
+++ b/src/testRunner/unittests/tsserver/cachingFileSystemInformation.ts
@@ -544,7 +544,7 @@ namespace ts.projectSystem {
                 const otherFiles = [packageJson];
                 const host = createServerHost(projectFiles.concat(otherFiles));
                 const projectService = createProjectService(host);
-                projectService.setHostConfiguration({ preferences: { includePackageJsonAutoImports: "none" } });
+                projectService.setHostConfiguration({ preferences: { includePackageJsonAutoImports: "off" } });
                 const { configFileName } = projectService.openClientFile(app.path);
                 assert.equal(configFileName, tsconfigJson.path as server.NormalizedPath, `should find config`); // TODO: GH#18217
                 const recursiveWatchedDirectories: string[] = [`${appFolder}`, `${appFolder}/node_modules`].concat(getNodeModuleDirectories(getDirectoryPath(appFolder)));
diff --git a/src/testRunner/unittests/tsserver/typingsInstaller.ts b/src/testRunner/unittests/tsserver/typingsInstaller.ts
index 1ca1ce143a75c..e9c77566b70ba 100644
--- a/src/testRunner/unittests/tsserver/typingsInstaller.ts
+++ b/src/testRunner/unittests/tsserver/typingsInstaller.ts
@@ -130,7 +130,7 @@ namespace ts.projectSystem {
             })();
 
             const projectService = createProjectService(host, { useSingleInferredProject: true, typingsInstaller: installer });
-            projectService.setHostConfiguration({ preferences: { includePackageJsonAutoImports: "none" } });
+            projectService.setHostConfiguration({ preferences: { includePackageJsonAutoImports: "off" } });
             projectService.openClientFile(file1.path);
 
             checkNumberOfProjects(projectService, { configuredProjects: 1 });
diff --git a/tests/baselines/reference/api/tsserverlibrary.d.ts b/tests/baselines/reference/api/tsserverlibrary.d.ts
index 5a803b4c659ed..f3ec0a6b0cec1 100644
--- a/tests/baselines/reference/api/tsserverlibrary.d.ts
+++ b/tests/baselines/reference/api/tsserverlibrary.d.ts
@@ -3818,7 +3818,7 @@ declare namespace ts {
         readonly importModuleSpecifierEnding?: "auto" | "minimal" | "index" | "js";
         readonly allowTextChangesInNewFiles?: boolean;
         readonly providePrefixAndSuffixTextForRename?: boolean;
-        readonly includePackageJsonAutoImports?: "exclude-dev" | "all" | "none";
+        readonly includePackageJsonAutoImports?: "auto" | "on" | "off";
         readonly provideRefactorNotApplicableReason?: boolean;
     }
     /** Represents a bigint literal value without requiring bigint support */
@@ -8897,7 +8897,7 @@ declare namespace ts.server.protocol {
         readonly lazyConfiguredProjectsFromExternalProject?: boolean;
         readonly providePrefixAndSuffixTextForRename?: boolean;
         readonly allowRenameOfImportPath?: boolean;
-        readonly includePackageJsonAutoImports?: "exclude-dev" | "all" | "none";
+        readonly includePackageJsonAutoImports?: "auto" | "on" | "off";
     }
     interface CompilerOptions {
         allowJs?: boolean;
diff --git a/tests/baselines/reference/api/typescript.d.ts b/tests/baselines/reference/api/typescript.d.ts
index bb9aa1f2d2537..8863114c90e3f 100644
--- a/tests/baselines/reference/api/typescript.d.ts
+++ b/tests/baselines/reference/api/typescript.d.ts
@@ -3818,7 +3818,7 @@ declare namespace ts {
         readonly importModuleSpecifierEnding?: "auto" | "minimal" | "index" | "js";
         readonly allowTextChangesInNewFiles?: boolean;
         readonly providePrefixAndSuffixTextForRename?: boolean;
-        readonly includePackageJsonAutoImports?: "exclude-dev" | "all" | "none";
+        readonly includePackageJsonAutoImports?: "auto" | "on" | "off";
         readonly provideRefactorNotApplicableReason?: boolean;
     }
     /** Represents a bigint literal value without requiring bigint support */