diff --git a/Sources/SKSwiftPMWorkspace/SwiftPMBuildSystem.swift b/Sources/SKSwiftPMWorkspace/SwiftPMBuildSystem.swift
index bd9df1e0d..2690a39e9 100644
--- a/Sources/SKSwiftPMWorkspace/SwiftPMBuildSystem.swift
+++ b/Sources/SKSwiftPMWorkspace/SwiftPMBuildSystem.swift
@@ -400,7 +400,7 @@ extension SwiftPMBuildSystem {
     )
 
     self.fileToTargets = [DocumentURI: [SwiftBuildTarget]](
-      modulesGraph.allTargets.flatMap { target in
+      modulesGraph.allModules.flatMap { target in
         return target.sources.paths.compactMap { (filePath) -> (key: DocumentURI, value: [SwiftBuildTarget])? in
           guard let buildTarget = buildDescription.getBuildTarget(for: target, in: modulesGraph) else {
             return nil
@@ -412,7 +412,7 @@ extension SwiftPMBuildSystem {
     )
 
     self.sourceDirToTargets = [DocumentURI: [SwiftBuildTarget]](
-      modulesGraph.allTargets.compactMap { (target) -> (DocumentURI, [SwiftBuildTarget])? in
+      modulesGraph.allModules.compactMap { (target) -> (DocumentURI, [SwiftBuildTarget])? in
         guard let buildTarget = buildDescription.getBuildTarget(for: target, in: modulesGraph) else {
           return nil
         }
@@ -545,7 +545,9 @@ extension SwiftPMBuildSystem: SKCore.BuildSystem {
       return targets.map(ConfiguredTarget.init)
     }
 
-    if path.basename == "Package.swift" {
+    if path.basename == "Package.swift"
+      && projectRoot == (try? TSCBasic.resolveSymlinks(TSCBasic.AbsolutePath(path.parentDirectory)))
+    {
       // We use an empty target name to represent the package manifest since an empty target name is not valid for any
       // user-defined target.
       return [ConfiguredTarget.forPackageManifest]
diff --git a/Tests/SourceKitLSPTests/WorkspaceTests.swift b/Tests/SourceKitLSPTests/WorkspaceTests.swift
index 5542c44f1..6a81b2338 100644
--- a/Tests/SourceKitLSPTests/WorkspaceTests.swift
+++ b/Tests/SourceKitLSPTests/WorkspaceTests.swift
@@ -191,6 +191,49 @@ final class WorkspaceTests: XCTestCase {
     XCTAssertEqual(diags, .full(RelatedFullDocumentDiagnosticReport(items: [])))
   }
 
+  func testCorrectWorkspaceForPackageSwiftInMultiSwiftPMWorkspaceSetup() async throws {
+    let project = try await MultiFileTestProject(
+      files: [
+        // PackageA
+        "PackageA/Sources/MyLibrary/libA.swift": "",
+        "PackageA/Package.swift": SwiftPMTestProject.defaultPackageManifest,
+
+        // PackageB
+        "PackageB/Sources/MyLibrary/libB.swift": "",
+        "PackageB/Package.swift": SwiftPMTestProject.defaultPackageManifest,
+      ],
+      workspaces: { scratchDir in
+        return [
+          WorkspaceFolder(uri: DocumentURI(scratchDir)),
+          WorkspaceFolder(uri: DocumentURI(scratchDir.appendingPathComponent("PackageA"))),
+          WorkspaceFolder(uri: DocumentURI(scratchDir.appendingPathComponent("PackageB"))),
+        ]
+      }
+    )
+
+    let pkgA = DocumentURI(
+      project.scratchDirectory
+        .appendingPathComponent("PackageA")
+        .appendingPathComponent("Package.swift")
+    )
+
+    let pkgB = DocumentURI(
+      project.scratchDirectory
+        .appendingPathComponent("PackageB")
+        .appendingPathComponent("Package.swift")
+    )
+
+    assertEqual(
+      await project.testClient.server.workspaceForDocument(uri: pkgA)?.rootUri,
+      DocumentURI(project.scratchDirectory.appendingPathComponent("PackageA"))
+    )
+
+    assertEqual(
+      await project.testClient.server.workspaceForDocument(uri: pkgB)?.rootUri,
+      DocumentURI(project.scratchDirectory.appendingPathComponent("PackageB"))
+    )
+  }
+
   func testSwiftPMPackageInSubfolder() async throws {
     let packageManifest = """
       // swift-tools-version: 5.7