diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/angular.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/angular.spec.ts.snap
index c86b94d43..bc695be4b 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/angular.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/angular.spec.ts.snap
@@ -49,6 +49,10 @@ exports[`angular configuration for android 1`] = `
     mainFields: [
       'module',
       'main'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -349,6 +353,10 @@ exports[`angular configuration for ios 1`] = `
     mainFields: [
       'module',
       'main'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/base.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/base.spec.ts.snap
index 4955469d6..6d2f74332 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/base.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/base.spec.ts.snap
@@ -43,6 +43,10 @@ exports[`base configuration for android 1`] = `
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -329,6 +333,10 @@ exports[`base configuration for ios 1`] = `
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/javascript.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/javascript.spec.ts.snap
index a35aeb83b..e202175cd 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/javascript.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/javascript.spec.ts.snap
@@ -43,6 +43,10 @@ exports[`javascript configuration for android 1`] = `
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -367,6 +371,10 @@ exports[`javascript configuration for ios 1`] = `
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/react.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/react.spec.ts.snap
index 67de0a79f..e5dd0b3b2 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/react.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/react.spec.ts.snap
@@ -46,6 +46,10 @@ exports[`react configuration > android > adds ReactRefreshWebpackPlugin when HMR
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -360,6 +364,10 @@ exports[`react configuration > android > base config 1`] = `
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -652,6 +660,10 @@ exports[`react configuration > ios > adds ReactRefreshWebpackPlugin when HMR ena
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -967,6 +979,10 @@ exports[`react configuration > ios > base config 1`] = `
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/svelte.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/svelte.spec.ts.snap
index 2c11a48a4..88871e6f9 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/svelte.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/svelte.spec.ts.snap
@@ -45,6 +45,10 @@ exports[`svelte configuration for android 1`] = `
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -356,6 +360,10 @@ exports[`svelte configuration for ios 1`] = `
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/typescript.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/typescript.spec.ts.snap
index d95cab7f0..2d356ba14 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/typescript.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/typescript.spec.ts.snap
@@ -43,6 +43,10 @@ exports[`typescript configuration for android 1`] = `
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -367,6 +371,10 @@ exports[`typescript configuration for ios 1`] = `
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/__tests__/configuration/__snapshots__/vue.spec.ts.snap b/packages/webpack5/__tests__/configuration/__snapshots__/vue.spec.ts.snap
index 52f510895..9441f6687 100644
--- a/packages/webpack5/__tests__/configuration/__snapshots__/vue.spec.ts.snap
+++ b/packages/webpack5/__tests__/configuration/__snapshots__/vue.spec.ts.snap
@@ -46,6 +46,10 @@ exports[`vue configuration for android 1`] = `
       '.scss',
       '.android.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
@@ -364,6 +368,10 @@ exports[`vue configuration for ios 1`] = `
       '.scss',
       '.ios.json',
       '.json'
+    ],
+    modules: [
+      '__jest__/node_modules',
+      'node_modules'
     ]
   },
   resolveLoader: {
diff --git a/packages/webpack5/src/configuration/base.ts b/packages/webpack5/src/configuration/base.ts
index f50beb3a9..62315a673 100644
--- a/packages/webpack5/src/configuration/base.ts
+++ b/packages/webpack5/src/configuration/base.ts
@@ -137,6 +137,12 @@ export default function (config: Config, env: IWebpackEnv = _env): Config {
 	// resolve symlinks
 	config.resolve.symlinks(true);
 
+	// resolve modules in project node_modules first
+	// then fall-back to default node resolution (up the parent folder chain)
+	config.resolve.modules
+		.add(getProjectFilePath('node_modules'))
+		.add('node_modules');
+
 	config.module
 		.rule('bundle')
 		.enforce('post')