diff --git a/README.md b/README.md
index 60b9b0f..d999368 100644
--- a/README.md
+++ b/README.md
@@ -8,6 +8,7 @@ Node.js `import` hook to instantaneously transform TypeScript to ESM on demand u
 - Cached for performance boost
 - Supports Node.js v12.20.0+
 - Handles `node:` import prefixes
+- Resolves `tsconfig.json` [`paths`](https://www.typescriptlang.org/tsconfig#paths)
 
 > **Tip:**
 >
diff --git a/package.json b/package.json
index e74e033..b8bdea3 100644
--- a/package.json
+++ b/package.json
@@ -32,7 +32,7 @@
 	},
 	"dependencies": {
 		"@esbuild-kit/core-utils": "^1.3.1",
-		"get-tsconfig": "^3.0.1"
+		"get-tsconfig": "^4.0.0"
 	},
 	"devDependencies": {
 		"@pvtnbr/eslint-config": "^0.22.0",
@@ -58,6 +58,7 @@
 				"error",
 				{
 					"allow": [
+						"test",
 						"describe",
 						"runTestSuite"
 					]
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index 8e4c07c..237cfa0 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -8,7 +8,7 @@ specifiers:
   eslint: ^8.15.0
   execa: ^6.1.0
   get-node: ^13.0.1
-  get-tsconfig: ^3.0.1
+  get-tsconfig: ^4.0.0
   manten: ^0.1.0
   pkgroll: ^1.3.0
   semver: ^7.3.7
@@ -17,7 +17,7 @@ specifiers:
 
 dependencies:
   '@esbuild-kit/core-utils': 1.3.1
-  get-tsconfig: 3.0.1
+  get-tsconfig: 4.0.0
 
 devDependencies:
   '@pvtnbr/eslint-config': 0.22.0_hcfsmds2fshutdssjqluwm76uu
@@ -2002,8 +2002,8 @@ packages:
       get-intrinsic: 1.1.1
     dev: true
 
-  /get-tsconfig/3.0.1:
-    resolution: {integrity: sha512-+m30eQjbcf3xMNdnacXH5IDAKUMbI7Mhbf3e1BHif1FzBlUhBzBlmOVc7kL4+kB035l8OCyBdI3dNXZ3of9HqA==}
+  /get-tsconfig/4.0.0:
+    resolution: {integrity: sha512-WvnskjM5QJbSjuZrJkG3CeIE/ywYjL9/UMYu5dpOa3iD6GjefbQq7J/nrZY4yo6QSYuYwmj7G7Xd9qzCjMMKUw==}
     dev: false
 
   /glob-parent/5.1.2:
diff --git a/src/loaders-deprecated.ts b/src/loaders-deprecated.ts
index fefa7d9..6ae438d 100644
--- a/src/loaders-deprecated.ts
+++ b/src/loaders-deprecated.ts
@@ -8,8 +8,8 @@ import {
 	transformDynamicImport,
 } from '@esbuild-kit/core-utils';
 import {
-	tsconfigRaw,
 	sourcemaps,
+	tsconfigRaw,
 	tsExtensionsPattern,
 	getFormatFromExtension,
 	type ModuleFormat,
diff --git a/src/loaders.ts b/src/loaders.ts
index 6e6fe1a..bb127ea 100644
--- a/src/loaders.ts
+++ b/src/loaders.ts
@@ -1,12 +1,14 @@
 import path from 'path';
+import { pathToFileURL } from 'url';
 import {
 	transform,
 	transformDynamicImport,
 	resolveTsPath,
 } from '@esbuild-kit/core-utils';
 import {
-	tsconfigRaw,
 	sourcemaps,
+	tsconfigRaw,
+	tsconfigPathsMatcher,
 	tsExtensionsPattern,
 	getFormatFromExtension,
 	type ModuleFormat,
@@ -77,11 +79,14 @@ async function tryDirectory(
 	}
 }
 
+const fileProtocol = 'file://';
+const isPathPattern = /^\.{0,2}\//;
+
 export const resolve: resolve = async function (
 	specifier,
 	context,
 	defaultResolve,
-	resursiveCall,
+	recursiveCall,
 ) {
 	// Added in v12.20.0
 	// https://nodejs.org/api/esm.html#esm_node_imports
@@ -94,6 +99,27 @@ export const resolve: resolve = async function (
 		return await tryDirectory(specifier, context, defaultResolve);
 	}
 
+	const isPath = (
+		specifier.startsWith(fileProtocol)
+		|| isPathPattern.test(specifier)
+	);
+
+	if (
+		tsconfigPathsMatcher
+		&& !isPath // bare specifier
+	) {
+		const possiblePaths = tsconfigPathsMatcher(specifier);
+		for (const possiblePath of possiblePaths) {
+			try {
+				return await resolve(
+					pathToFileURL(possiblePath).toString(),
+					context,
+					defaultResolve,
+				);
+			} catch {}
+		}
+	}
+
 	/**
 	 * Typescript gives .ts, .cts, or .mts priority over actual .js, .cjs, or .mjs extensions
 	 */
@@ -117,7 +143,8 @@ export const resolve: resolve = async function (
 	} catch (error) {
 		if (
 			(error instanceof Error)
-			&& !resursiveCall
+			&& isPath
+			&& !recursiveCall
 		) {
 			if ((error as any).code === 'ERR_UNSUPPORTED_DIR_IMPORT') {
 				return await tryDirectory(specifier, context, defaultResolve);
@@ -140,7 +167,7 @@ export const resolve: resolve = async function (
 
 	let { format } = resolved;
 
-	if (resolved.url.startsWith('file:')) {
+	if (resolved.url.startsWith(fileProtocol)) {
 		format = getFormatFromExtension(resolved.url) ?? format;
 
 		if (!format) {
diff --git a/src/utils.ts b/src/utils.ts
index 491a87a..bc474c5 100644
--- a/src/utils.ts
+++ b/src/utils.ts
@@ -1,11 +1,13 @@
 import path from 'path';
 import { installSourceMapSupport } from '@esbuild-kit/core-utils';
-import getTsconfig from 'get-tsconfig';
+import { getTsconfig, createPathsMatcher } from 'get-tsconfig';
+
+export const sourcemaps = installSourceMapSupport();
 
 const tsconfig = getTsconfig();
-export const tsconfigRaw = tsconfig?.config;
 
-export const sourcemaps = installSourceMapSupport();
+export const tsconfigRaw = tsconfig?.config;
+export const tsconfigPathsMatcher = tsconfig && createPathsMatcher(tsconfig);
 
 export const tsExtensionsPattern = /\.([cm]?ts|[tj]sx)$/;
 
diff --git a/tests/fixtures/package-module/tsconfig/src/base-url.ts b/tests/fixtures/package-module/tsconfig/src/base-url.ts
new file mode 100644
index 0000000..4d49952
--- /dev/null
+++ b/tests/fixtures/package-module/tsconfig/src/base-url.ts
@@ -0,0 +1,3 @@
+import value from 'resolve-target';
+
+console.log(value);
diff --git a/tests/fixtures/package-module/tsconfig/src/paths-exact-match.ts b/tests/fixtures/package-module/tsconfig/src/paths-exact-match.ts
new file mode 100644
index 0000000..1b4b714
--- /dev/null
+++ b/tests/fixtures/package-module/tsconfig/src/paths-exact-match.ts
@@ -0,0 +1,3 @@
+import value from 'paths-exact-match';
+
+console.log(value);
diff --git a/tests/fixtures/package-module/tsconfig/src/paths-prefix-match.ts b/tests/fixtures/package-module/tsconfig/src/paths-prefix-match.ts
new file mode 100644
index 0000000..1b9fc00
--- /dev/null
+++ b/tests/fixtures/package-module/tsconfig/src/paths-prefix-match.ts
@@ -0,0 +1,3 @@
+import value from 'p/nested-resolve-target';
+
+console.log(value);
diff --git a/tests/fixtures/package-module/tsconfig/src/paths-suffix-match.ts b/tests/fixtures/package-module/tsconfig/src/paths-suffix-match.ts
new file mode 100644
index 0000000..73cb173
--- /dev/null
+++ b/tests/fixtures/package-module/tsconfig/src/paths-suffix-match.ts
@@ -0,0 +1,3 @@
+import value from 'nested-resolve-target/s';
+
+console.log(value);
diff --git a/tests/fixtures/package-module/tsconfig/src/resolve-target.ts b/tests/fixtures/package-module/tsconfig/src/resolve-target.ts
new file mode 100644
index 0000000..0c47d66
--- /dev/null
+++ b/tests/fixtures/package-module/tsconfig/src/resolve-target.ts
@@ -0,0 +1 @@
+export default 'resolved';
diff --git a/tests/fixtures/package-module/tsconfig/tsx.tsx b/tests/fixtures/package-module/tsconfig/src/tsx.tsx
similarity index 100%
rename from tests/fixtures/package-module/tsconfig/tsx.tsx
rename to tests/fixtures/package-module/tsconfig/src/tsx.tsx
diff --git a/tests/fixtures/package-module/tsconfig/src/utils/nested-resolve-target.ts b/tests/fixtures/package-module/tsconfig/src/utils/nested-resolve-target.ts
new file mode 100644
index 0000000..0c47d66
--- /dev/null
+++ b/tests/fixtures/package-module/tsconfig/src/utils/nested-resolve-target.ts
@@ -0,0 +1 @@
+export default 'resolved';
diff --git a/tests/fixtures/package-module/tsconfig/tsconfig.json b/tests/fixtures/package-module/tsconfig/tsconfig.json
index 2d08e7d..40c2faa 100644
--- a/tests/fixtures/package-module/tsconfig/tsconfig.json
+++ b/tests/fixtures/package-module/tsconfig/tsconfig.json
@@ -3,5 +3,11 @@
 		"jsx": "react",
 		"jsxFactory": "console.log",
 		"jsxFragmentFactory": "null",
+		"baseUrl": "./src",
+		"paths": {
+			"paths-exact-match": ["resolve-target"],
+			"p/*": ["utils/*"],
+			"*/s": ["utils/*"]
+		},
 	}
 }
diff --git a/tests/specs/typescript/tsconfig.ts b/tests/specs/typescript/tsconfig.ts
index a07e146..581edce 100644
--- a/tests/specs/typescript/tsconfig.ts
+++ b/tests/specs/typescript/tsconfig.ts
@@ -2,12 +2,42 @@ import { testSuite, expect } from 'manten';
 import type { NodeApis } from '../../utils/node-with-loader';
 
 export default testSuite(async ({ describe }, node: NodeApis) => {
-	describe('tsconfig', ({ test }) => {
+	describe('tsconfig', ({ test, describe }) => {
 		test('jsxFactory & jsxFragmentFactory', async () => {
-			const nodeProcess = await node.load('./tsx.tsx', {
+			const nodeProcess = await node.load('./src/tsx.tsx', {
 				cwd: './tsconfig',
 			});
 			expect(nodeProcess.stdout).toBe('div null hello world\nnull null goodbye world');
 		});
+
+		describe('paths', ({ test }) => {
+			test('resolves baseUrl', async () => {
+				const nodeProcess = await node.load('./src/base-url.ts', {
+					cwd: './tsconfig',
+				});
+				expect(nodeProcess.stdout).toBe('resolved');
+			});
+
+			test('resolves paths exact match', async () => {
+				const nodeProcess = await node.load('./src/paths-exact-match.ts', {
+					cwd: './tsconfig',
+				});
+				expect(nodeProcess.stdout).toBe('resolved');
+			});
+
+			test('resolves paths prefix', async () => {
+				const nodeProcess = await node.load('./src/paths-prefix-match.ts', {
+					cwd: './tsconfig',
+				});
+				expect(nodeProcess.stdout).toBe('resolved');
+			});
+
+			test('resolves paths suffix', async () => {
+				const nodeProcess = await node.load('./src/paths-suffix-match.ts', {
+					cwd: './tsconfig',
+				});
+				expect(nodeProcess.stdout).toBe('resolved');
+			});
+		});
 	});
 });