diff --git a/CHANGELOG.md b/CHANGELOG.md
index b24b5783f3..61c7de848f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -24,6 +24,7 @@
 - Remove obsolete option `-bs-unsafe-empty-array`. https://github.com/rescript-lang/rescript/pull/7635
 - Clean up `config.ml`. https://github.com/rescript-lang/rescript/pull/7636
 - Rewatch: simplify getting bsc path. https://github.com/rescript-lang/rescript/pull/7634
+- Rewatch: only get `"type": "dev"` source files for local packages. https://github.com/rescript-lang/rescript/pull/7646
 
 #### :rocket: New Feature
 
diff --git a/rewatch/src/build/packages.rs b/rewatch/src/build/packages.rs
index c5bc613f76..3ab8e1e308 100644
--- a/rewatch/src/build/packages.rs
+++ b/rewatch/src/build/packages.rs
@@ -550,7 +550,7 @@ fn extend_with_children(
                     Path::new(&package.path),
                     filter,
                     source,
-                    build_dev_deps,
+                    package.is_local_dep && build_dev_deps,
                 )
             })
             .collect::<Vec<AHashMap<PathBuf, SourceFileMeta>>>()