diff --git a/src/Workspaces/Core/Portable/Workspace/Solution/SolutionState.cs b/src/Workspaces/Core/Portable/Workspace/Solution/SolutionState.cs
index 0bd0edb555cd9ce74e0833b7d83f609cb572c063..90daf1913729ed85a9d4814078e60966a9c64ccd 100644
--- a/src/Workspaces/Core/Portable/Workspace/Solution/SolutionState.cs
+++ b/src/Workspaces/Core/Portable/Workspace/Solution/SolutionState.cs
@@ -419,7 +419,23 @@ private SolutionState AddProject(ProjectId projectId, ProjectState projectState)
             var newStateMap = _projectIdToProjectStateMap.Add(projectId, projectState);
             var newDependencyGraph = _dependencyGraph
                                         .WithAdditionalProjects(SpecializedCollections.SingletonEnumerable(projectId))
-                                        .WithAdditionalProjectReferences(projectId, projectState.ProjectReferences.Select(r => r.ProjectId).ToList());
+                                        .WithAdditionalProjectReferences(projectId,
+                                            projectState.ProjectReferences.Where(r => _projectIdToProjectStateMap.ContainsKey(r.ProjectId)).Select(r => r.ProjectId).ToList());
+
+            // It's possible that another project already in newStateMap has a reference to this project that we're adding, since we allow
+            // dangling references like that. If so, we'll need to link those in too.
+            foreach (var newState in newStateMap)
+            {
+                foreach (var projectReference in newState.Value.ProjectReferences)
+                { 
+                    if (projectReference.ProjectId == projectId)
+                    {
+                        newDependencyGraph = newDependencyGraph.WithAdditionalProjectReferences(newState.Key, ImmutableArray.Create(projectId));
+                        break;
+                    }
+                }
+            }
+            
             var newTrackerMap = CreateCompilationTrackerMap(projectId, newDependencyGraph);
             var newLinkedFilesMap = CreateLinkedFilesMapWithAddedProject(newStateMap[projectId]);
 
diff --git a/src/Workspaces/CoreTest/SolutionTests/ProjectDependencyGraphTests.cs b/src/Workspaces/CoreTest/SolutionTests/ProjectDependencyGraphTests.cs
index 488d052cd1f44cb76d164e6e8cae4db95b3a25cc..925ddfe807f0d3da718cf7e4646d5bb8940e4dbe 100644
--- a/src/Workspaces/CoreTest/SolutionTests/ProjectDependencyGraphTests.cs
+++ b/src/Workspaces/CoreTest/SolutionTests/ProjectDependencyGraphTests.cs
@@ -178,7 +178,6 @@ void VerifyAllTransitiveReferences()
             VerifyDirectReferences(solution, "A", new string[] { "B", "C" });
         }
 
-
         [Fact, Trait(Traits.Feature, Traits.Features.Workspace)]
         public void TestTransitiveReferencesIncrementalUpdateWithProjectThatHasUnknownReferences()
         {
@@ -208,6 +207,32 @@ public void TestTransitiveReferencesIncrementalUpdateWithProjectThatHasUnknownRe
             VerifyTransitiveReferences(solution, dependencyGraph, project: "A", expectedResults: new string[] { "B" });
         }
 
+        [Fact, Trait(Traits.Feature, Traits.Features.Workspace)]
+        public void TestTransitiveReferencesWithDanglingProjectReference()
+        {
+            // We are going to create a solution with the references:
+            //
+            // A -> B
+            //
+            // but we're going to add A as a reference with B not existing yet. Then we'll add in B and ask.
+
+            var solution = CreateSolution();
+            var projectAId = ProjectId.CreateNewId("A");
+            var projectBId = ProjectId.CreateNewId("B");
+
+            var projectAInfo = ProjectInfo.Create(projectAId, VersionStamp.Create(), "A", "A", LanguageNames.CSharp,
+                                    projectReferences: new[] { new ProjectReference(projectBId) });
+
+            solution = solution.AddProject(projectAInfo);
+
+            VerifyDirectReferences(solution, "A", new string[] { });
+            VerifyTransitiveReferences(solution, "A", new string[] { });
+
+            solution = solution.AddProject(projectBId, "B", "B", LanguageNames.CSharp);
+
+            VerifyTransitiveReferences(solution, "A", new string[] { "B" });
+        }
+
         private void VerifyDirectReferences(Solution solution, string project, string[] expectedResults)
         {
             var projectDependencyGraph = solution.GetProjectDependencyGraph();