diff --git a/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core.Test/Discover/DiscoveryWorkerTests.PackagesConfig.cs b/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core.Test/Discover/DiscoveryWorkerTests.PackagesConfig.cs
index 5dfb287278..1994f06aa2 100644
--- a/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core.Test/Discover/DiscoveryWorkerTests.PackagesConfig.cs
+++ b/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core.Test/Discover/DiscoveryWorkerTests.PackagesConfig.cs
@@ -115,5 +115,61 @@ await TestDiscoveryAsync(
                 }
             );
         }
+
+        [Theory]
+        [InlineData(true)]
+        [InlineData(false)]
+        public async Task DiscoveryIsMergedWithPackageReferences(bool useDirectDiscovery)
+        {
+            await TestDiscoveryAsync(
+                experimentsManager: new ExperimentsManager() { UseDirectDiscovery = useDirectDiscovery },
+                packages:
+                [
+                    MockNuGetPackage.CreateSimplePackage("Package.A", "1.0.0", "net46"),
+                    MockNuGetPackage.CreateSimplePackage("Package.B", "2.0.0", "net46"),
+                ],
+                workspacePath: "src",
+                files: [
+                    ("src/myproj.csproj", """
+                        <Project Sdk="Microsoft.NET.Sdk">
+                          <PropertyGroup>
+                            <TargetFramework>net46</TargetFramework>
+                          </PropertyGroup>
+                          <ItemGroup>
+                            <None Include="..\unexpected-directory\packages.config" />
+                            <PackageReference Include="Package.B" Version="2.0.0" />
+                          </ItemGroup>
+                        </Project>
+                        """),
+                    ("unexpected-directory/packages.config", """
+                        <?xml version="1.0" encoding="utf-8"?>
+                        <packages>
+                          <package id="Package.A" version="1.0.0" targetFramework="net46" />
+                        </packages>
+                        """),
+                ],
+                expectedResult: new()
+                {
+                    Path = "src",
+                    Projects = [
+                        new()
+                        {
+                            FilePath = "myproj.csproj",
+                            Properties = [new("TargetFramework", "net46", "src/myproj.csproj")],
+                            TargetFrameworks = ["net46"],
+                            Dependencies = [
+                                new("Package.A", "1.0.0", DependencyType.PackagesConfig, TargetFrameworks: ["net46"]),
+                                new("Package.B", "2.0.0", DependencyType.PackageReference, IsDirect: true, TargetFrameworks: ["net46"]),
+                            ],
+                            ReferencedProjectPaths = [],
+                            ImportedFiles = [],
+                            AdditionalFiles = [
+                                "../unexpected-directory/packages.config"
+                            ],
+                        }
+                    ],
+                }
+            );
+        }
     }
 }
diff --git a/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core/Discover/DiscoveryWorker.cs b/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core/Discover/DiscoveryWorker.cs
index 398f04e54f..6cde5e578e 100644
--- a/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core/Discover/DiscoveryWorker.cs
+++ b/nuget/helpers/lib/NuGetUpdater/NuGetUpdater.Core/Discover/DiscoveryWorker.cs
@@ -8,6 +8,8 @@
 using Microsoft.Build.Evaluation;
 using Microsoft.Build.Exceptions;
 
+using NuGet.Frameworks;
+
 using NuGetUpdater.Core.Analyze;
 using NuGetUpdater.Core.Utilities;
 
@@ -364,19 +366,62 @@ private async Task<ImmutableArray<ProjectDiscoveryResult>> RunForProjectPathsAsy
                     }
                 }
 
-                if (!results.ContainsKey(relativeProjectPath) &&
-                    packagesConfigResult is not null &&
-                    packagesConfigResult.Dependencies.Length > 0)
+                if (packagesConfigResult is not null)
                 {
-                    // project contained only packages.config dependencies
-                    results[relativeProjectPath] = new ProjectDiscoveryResult()
+                    // we might have to merge this dependency with some others
+                    if (results.TryGetValue(relativeProjectPath, out var existingProjectDiscovery))
                     {
-                        FilePath = relativeProjectPath,
-                        Dependencies = packagesConfigResult.Dependencies,
-                        TargetFrameworks = packagesConfigResult.TargetFrameworks,
-                        ImportedFiles = [], // no imported files resolved for packages.config scenarios
-                        AdditionalFiles = packagesConfigResult.AdditionalFiles,
-                    };
+                        // merge SDK and packages.config results
+                        var mergedDependencies = existingProjectDiscovery.Dependencies.Concat(packagesConfigResult.Dependencies)
+                            .DistinctBy(d => d.Name, StringComparer.OrdinalIgnoreCase)
+                            .OrderBy(d => d.Name)
+                            .ToImmutableArray();
+                        var mergedTargetFrameworks = existingProjectDiscovery.TargetFrameworks.Concat(packagesConfigResult.TargetFrameworks)
+                            .Select(t =>
+                            {
+                                try
+                                {
+                                    var tfm = NuGetFramework.Parse(t);
+                                    return tfm.GetShortFolderName();
+                                }
+                                catch
+                                {
+                                    return string.Empty;
+                                }
+                            })
+                            .Where(tfm => !string.IsNullOrEmpty(tfm))
+                            .Distinct()
+                            .OrderBy(tfm => tfm)
+                            .ToImmutableArray();
+                        var mergedProperties = existingProjectDiscovery.Properties; // packages.config discovery doesn't produce properties
+                        var mergedImportedFiles = existingProjectDiscovery.ImportedFiles; // packages.config discovery doesn't produce imported files
+                        var mergedAdditionalFiles = existingProjectDiscovery.AdditionalFiles.Concat(packagesConfigResult.AdditionalFiles)
+                            .Distinct(StringComparer.OrdinalIgnoreCase)
+                            .OrderBy(f => f)
+                            .ToImmutableArray();
+                        var mergedResult = new ProjectDiscoveryResult()
+                        {
+                            FilePath = existingProjectDiscovery.FilePath,
+                            Dependencies = mergedDependencies,
+                            TargetFrameworks = mergedTargetFrameworks,
+                            Properties = mergedProperties,
+                            ImportedFiles = mergedImportedFiles,
+                            AdditionalFiles = mergedAdditionalFiles,
+                        };
+                        results[relativeProjectPath] = mergedResult;
+                    }
+                    else
+                    {
+                        // add packages.config results
+                        results[relativeProjectPath] = new ProjectDiscoveryResult()
+                        {
+                            FilePath = relativeProjectPath,
+                            Dependencies = packagesConfigResult.Dependencies,
+                            TargetFrameworks = packagesConfigResult.TargetFrameworks,
+                            ImportedFiles = [], // no imported files resolved for packages.config scenarios
+                            AdditionalFiles = packagesConfigResult.AdditionalFiles,
+                        };
+                    }
                 }
             }
         }