diff --git a/common/changes/@microsoft/rush/bmiddha-resolve-catalogs-in-injected-deps_2026-10-15-05-28.json b/common/changes/@microsoft/rush/bmiddha-resolve-catalogs-in-injected-deps_2026-10-15-05-28.json
new file mode 100644
index 0000000000..e86af7239e
--- /dev/null
+++ b/common/changes/@microsoft/rush/bmiddha-resolve-catalogs-in-injected-deps_2026-10-15-05-28.json
@@ -0,0 +1,11 @@
+{
+  "changes": [
+    {
+      "packageName": "@microsoft/rush",
+      "comment": "Resolve PNPM \"catalog:\" references in projects injected from other subspaces.",
+      "type": "patch"
+    }
+  ],
+  "packageName": "@microsoft/rush",
+  "email": "223556219+Copilot@users.noreply.github.com"
+}
diff --git a/libraries/rush-lib/src/api/Subspace.ts b/libraries/rush-lib/src/api/Subspace.ts
index 611f96859a..766bc8038a 100644
--- a/libraries/rush-lib/src/api/Subspace.ts
+++ b/libraries/rush-lib/src/api/Subspace.ts
@@ -15,7 +15,8 @@ import { CommonVersionsConfiguration } from './CommonVersionsConfiguration';
 import { RepoStateFile } from '../logic/RepoStateFile';
 import type { PnpmPackageManager } from './packageManager/PnpmPackageManager';
 import { PnpmOptionsConfiguration } from '../logic/pnpm/PnpmOptionsConfiguration';
-import { getEffectivePnpmCatalogs } from '../logic/pnpm/EffectivePnpmOptions';
+import { getEffectivePnpmCatalogs, type PnpmCatalogs } from '../logic/pnpm/EffectivePnpmOptions';
+import { tryGetPnpmCatalogVersion, tryParsePnpmCatalogName } from '../logic/pnpm/PnpmCatalogReference';
 import { SubspacePnpmfileConfiguration } from '../logic/pnpm/SubspacePnpmfileConfiguration';
 import type { ISubspacePnpmfileShimSettings } from '../logic/pnpm/IPnpmfile';
 
@@ -466,6 +467,26 @@ export class Subspace {
       this.#rushConfiguration.projects.map((rushProject) => rushProject.packageName)
     );
 
+    const catalogsBySubspaceName: Map<string, PnpmCatalogs | undefined> = new Map();
+    const getOtherSubspaceCatalogs: (rushProject: RushConfigurationProject) => PnpmCatalogs | undefined = (
+      rushProject: RushConfigurationProject
+    ) => {
+      // PNPM resolves the catalog references of this subspace's own projects
+      if (this.contains(rushProject)) {
+        return undefined;
+      }
+
+      const { subspace } = rushProject;
+      if (!catalogsBySubspaceName.has(subspace.subspaceName)) {
+        catalogsBySubspaceName.set(
+          subspace.subspaceName,
+          getEffectivePnpmCatalogs(subspace, this.#rushConfiguration)
+        );
+      }
+
+      return catalogsBySubspaceName.get(subspace.subspaceName);
+    };
+
     // get all related package.json
     while (relatedProjects.length > 0) {
       const rushProject: RushConfigurationProject = relatedProjects.pop()!;
@@ -491,12 +512,14 @@ export class Subspace {
         }
       }
 
+      // Hash the resolved versions so that editing a catalog entry triggers a reinstall
+      const catalogs: PnpmCatalogs | undefined = getOtherSubspaceCatalogs(rushProject);
       allPackageJson.push({
         name,
         bin,
-        dependencies,
-        peerDependencies,
-        optionalDependencies,
+        dependencies: _resolveCatalogReferences(dependencies, catalogs),
+        peerDependencies: _resolveCatalogReferences(peerDependencies, catalogs),
+        optionalDependencies: _resolveCatalogReferences(optionalDependencies, catalogs),
         dependenciesMeta,
         peerDependenciesMeta,
         resolutions
@@ -517,3 +540,29 @@ export class Subspace {
     return packageJsonInjectedDependenciesHash;
   }
 }
+
+function _resolveCatalogReferences(
+  dependencies: Record<string, string> | undefined,
+  catalogs: PnpmCatalogs | undefined
+): Record<string, string> | undefined {
+  if (!dependencies || !catalogs) {
+    return dependencies;
+  }
+
+  let result: Record<string, string> | undefined;
+  for (const [dependencyName, versionSpecifier] of Object.entries(dependencies)) {
+    const catalogName: string | undefined = tryParsePnpmCatalogName(versionSpecifier);
+    if (catalogName !== undefined) {
+      const catalogVersion: string | undefined = tryGetPnpmCatalogVersion(
+        catalogs,
+        catalogName,
+        dependencyName
+      );
+      if (catalogVersion !== undefined) {
+        (result ??= { ...dependencies })[dependencyName] = catalogVersion;
+      }
+    }
+  }
+
+  return result ?? dependencies;
+}
diff --git a/libraries/rush-lib/src/api/test/Subspace.test.ts b/libraries/rush-lib/src/api/test/Subspace.test.ts
index 4087b2b971..ac7fbcf98d 100644
--- a/libraries/rush-lib/src/api/test/Subspace.test.ts
+++ b/libraries/rush-lib/src/api/test/Subspace.test.ts
@@ -3,6 +3,8 @@
 
 import * as path from 'node:path';
 
+import type { IPackageJson } from '@rushstack/node-core-library';
+
 import { RushConfiguration } from '../RushConfiguration';
 import { Subspace } from '../Subspace';
 
@@ -139,5 +141,58 @@ describe(Subspace.name, () => {
       expect(hashAfter).toBeDefined();
       expect(hashBefore).not.toBe(hashAfter);
     });
+
+    describe('with catalog references in injected projects from other subspaces', () => {
+      // "catalog-consumer" (consumer-subspace) injects "catalog-provider" and "transitive-provider" (default)
+      const injectedSubspaceCatalogsRushJson: string = path.resolve(
+        __dirname,
+        '../../logic/pnpm/test/repoWithInjectedSubspaceCatalogs/rush.json'
+      );
+
+      it('hashes the catalog versions instead of the catalog references', () => {
+        const rushConfiguration: RushConfiguration = RushConfiguration.loadFromConfigurationFile(
+          injectedSubspaceCatalogsRushJson
+        );
+        const consumerSubspace: Subspace = rushConfiguration.getSubspace('consumer-subspace');
+
+        const hashBefore: string | undefined = consumerSubspace.getPackageJsonInjectedDependenciesHash();
+
+        // The default subspace's catalog versions, which differ from consumer-subspace's catalogs
+        const providerPackageJson: IPackageJson =
+          rushConfiguration.getProjectByName('catalog-provider')!.packageJson;
+        providerPackageJson.dependencies = {
+          ...providerPackageJson.dependencies,
+          lodash: '^4.17.21',
+          semver: '~7.5.4'
+        };
+        providerPackageJson.optionalDependencies = { fsevents: '~2.3.2' };
+        providerPackageJson.peerDependencies = { typescript: '~5.3.0' };
+        rushConfiguration.getProjectByName('transitive-provider')!.packageJson.dependencies = {
+          lodash: '^4.17.21'
+        };
+
+        const hashAfter: string | undefined = consumerSubspace.getPackageJsonInjectedDependenciesHash();
+
+        expect(hashBefore).toBeDefined();
+        expect(hashAfter).toBe(hashBefore);
+      });
+
+      it("changes when an entry in the injected project's subspace catalog changes", () => {
+        const rushConfiguration: RushConfiguration = RushConfiguration.loadFromConfigurationFile(
+          injectedSubspaceCatalogsRushJson
+        );
+        const consumerSubspace: Subspace = rushConfiguration.getSubspace('consumer-subspace');
+
+        const hashBefore: string | undefined = consumerSubspace.getPackageJsonInjectedDependenciesHash();
+
+        rushConfiguration.pnpmOptions.globalCatalogs!.default.semver = '~7.6.0';
+
+        const hashAfter: string | undefined = consumerSubspace.getPackageJsonInjectedDependenciesHash();
+
+        expect(hashBefore).toBeDefined();
+        expect(hashAfter).toBeDefined();
+        expect(hashAfter).not.toBe(hashBefore);
+      });
+    });
   });
 });
diff --git a/libraries/rush-lib/src/logic/pnpm/IPnpmfile.ts b/libraries/rush-lib/src/logic/pnpm/IPnpmfile.ts
index 50e9ddadd2..b658c35fdc 100644
--- a/libraries/rush-lib/src/logic/pnpm/IPnpmfile.ts
+++ b/libraries/rush-lib/src/logic/pnpm/IPnpmfile.ts
@@ -6,6 +6,7 @@ import type { IPackageJson } from '@rushstack/node-core-library';
 
 import type { IPnpmShrinkwrapYaml } from './PnpmShrinkwrapFile';
 import type { RushConfigurationProject } from '../../api/RushConfigurationProject';
+import type { PnpmCatalogs } from './EffectivePnpmOptions';
 
 /**
  * The `settings` parameter passed to {@link IPnpmfileShim.hooks.readPackage} and
@@ -26,6 +27,7 @@ export interface IWorkspaceProjectInfo
   extends Pick<RushConfigurationProject, 'packageName' | 'projectRelativeFolder'> {
   packageVersion: RushConfigurationProject['packageJson']['version'];
   injectedDependencies: Array<string>;
+  subspaceName?: string;
 }
 
 /**
@@ -37,6 +39,10 @@ export interface ISubspacePnpmfileShimSettings {
   workspaceProjects: Record<string, IWorkspaceProjectInfo>;
   subspaceProjects: Record<string, IWorkspaceProjectInfo>;
   userPnpmfilePath?: string;
+  /**
+   * The effective catalogs of the other subspaces whose projects are injected into this subspace.
+   */
+  catalogsBySubspaceName?: Record<string, PnpmCatalogs>;
 }
 
 /**
diff --git a/libraries/rush-lib/src/logic/pnpm/SubspaceGlobalPnpmfileShim.ts b/libraries/rush-lib/src/logic/pnpm/SubspaceGlobalPnpmfileShim.ts
index 02c143fcb3..29a3040eb7 100644
--- a/libraries/rush-lib/src/logic/pnpm/SubspaceGlobalPnpmfileShim.ts
+++ b/libraries/rush-lib/src/logic/pnpm/SubspaceGlobalPnpmfileShim.ts
@@ -8,8 +8,8 @@
 
 import path from 'node:path';
 
-// This file can use "import type" but otherwise should not reference any other modules, since it will
-// be run from the "common/temp" directory
+// This file runs from the "common/temp" directory, so besides "import type" it may only import local modules
+// without runtime dependencies, which webpack bundles into the shim
 import type * as TSemver from 'semver';
 
 import type { IPackageJson } from '@rushstack/node-core-library';
@@ -22,11 +22,23 @@ import type {
   IWorkspaceProjectInfo
 } from './IPnpmfile';
 import type { IPnpmShrinkwrapYaml } from './PnpmShrinkwrapFile';
+import type { PnpmCatalogs } from './EffectivePnpmOptions';
+import { tryGetPnpmCatalogVersion, tryParsePnpmCatalogName } from './PnpmCatalogReference';
 
-let settings: ISubspacePnpmfileShimSettings;
+let settings: ISubspacePnpmfileShimSettings | undefined;
 let userPnpmfile: IPnpmfile | undefined;
 let semver: typeof TSemver | undefined;
 
+const INSTALLED_PACKAGE_DEPENDENCY_FIELDS: ReadonlyArray<
+  'dependencies' | 'optionalDependencies' | 'peerDependencies'
+> = ['dependencies', 'optionalDependencies', 'peerDependencies'];
+
+export function reset(): void {
+  settings = undefined;
+  userPnpmfile = undefined;
+  semver = undefined;
+}
+
 // Initialize all external aspects of the pnpmfile shim. When using the shim, settings
 // are always expected to be available. Init must be called before running any hook that
 // depends on a resource obtained from or related to the settings, and will require modules
@@ -52,18 +64,87 @@ function init(context: IPnpmfileContext | any): IPnpmfileContext {
     // Reuse the already initialized settings
     context.splitWorkspacePnpmfileShimSettings = settings;
   }
+  const definedSettings: ISubspacePnpmfileShimSettings = settings!;
   // If a userPnpmfilePath is provided, we expect it to exist
-  if (!userPnpmfile && settings.userPnpmfilePath) {
-    userPnpmfile = require(settings.userPnpmfilePath);
+  if (!userPnpmfile && definedSettings.userPnpmfilePath) {
+    userPnpmfile = require(definedSettings.userPnpmfilePath);
   }
   // If a semverPath is provided, we expect it to exist
-  if (!semver && settings.semverPath) {
-    semver = require(settings.semverPath);
+  if (!semver && definedSettings.semverPath) {
+    semver = require(definedSettings.semverPath);
   }
   // Return the normalized context
   return context as IPnpmfileContext;
 }
 
+// PNPM resolves "catalog:" only for its own workspace projects. Projects from other subspaces are installed as
+// external "file:" packages, so resolve their references with the catalogs of their own subspace.
+function resolveOtherSubspaceCatalogReferences(pkg: IPackageJson): void {
+  if (!settings) {
+    throw new Error(`splitWorkspaceGlobalPnpmfileShimSettings not initialized`);
+  }
+
+  // Rewriting this subspace's own projects would change the specifiers of the lockfile importers
+  if (!Object.prototype.hasOwnProperty.call(settings.workspaceProjects, pkg.name)) {
+    return;
+  }
+
+  const workspaceProject: IWorkspaceProjectInfo = settings.workspaceProjects[pkg.name];
+  for (const dependencyField of INSTALLED_PACKAGE_DEPENDENCY_FIELDS) {
+    const dependencies: Record<string, string> | undefined = pkg[dependencyField];
+    if (!dependencies) {
+      continue;
+    }
+
+    for (const [dependencyName, versionSpecifier] of Object.entries(dependencies)) {
+      const catalogName: string | undefined = tryParsePnpmCatalogName(versionSpecifier);
+      if (catalogName !== undefined) {
+        dependencies[dependencyName] = getCatalogVersion(
+          workspaceProject,
+          dependencyName,
+          versionSpecifier,
+          catalogName
+        );
+      }
+    }
+  }
+}
+
+function getCatalogVersion(
+  workspaceProject: IWorkspaceProjectInfo,
+  dependencyName: string,
+  versionSpecifier: string,
+  catalogName: string
+): string {
+  const { packageName, subspaceName } = workspaceProject;
+  const subspaceCatalogs: PnpmCatalogs | undefined =
+    subspaceName !== undefined &&
+    settings?.catalogsBySubspaceName &&
+    Object.prototype.hasOwnProperty.call(settings.catalogsBySubspaceName, subspaceName)
+      ? settings.catalogsBySubspaceName[subspaceName]
+      : undefined;
+
+  const catalogVersion: string | undefined = tryGetPnpmCatalogVersion(
+    subspaceCatalogs,
+    catalogName,
+    dependencyName
+  );
+  if (catalogVersion !== undefined) {
+    return catalogVersion;
+  }
+
+  const prefix: string = `The "${packageName}" project depends on "${dependencyName}@${versionSpecifier}", but`;
+  if (!subspaceCatalogs) {
+    throw new Error(`${prefix} no catalogs were found for the "${subspaceName}" subspace.`);
+  } else if (!Object.prototype.hasOwnProperty.call(subspaceCatalogs, catalogName)) {
+    throw new Error(`${prefix} the "${subspaceName}" subspace does not define a "${catalogName}" catalog.`);
+  } else {
+    throw new Error(
+      `${prefix} the "${catalogName}" catalog of the "${subspaceName}" subspace has no "${dependencyName}" entry.`
+    );
+  }
+}
+
 // Rewrite rush project referenced in split workspace.
 // For example: "project-a": "workspace:*" --> "project-a": "link:../../project-a"
 function rewriteRushProjectVersions(
@@ -160,6 +241,7 @@ export const hooks: IPnpmfileHooks = {
   // Rewrite workspace protocol to link protocol for non split workspace projects
   readPackage: (pkg: IPackageJson, context: IPnpmfileContext) => {
     context = init(context);
+    resolveOtherSubspaceCatalogReferences(pkg);
     rewriteRushProjectVersions(pkg.name, pkg.dependencies);
     rewriteRushProjectVersions(pkg.name, pkg.devDependencies);
     return userPnpmfile?.hooks?.readPackage ? userPnpmfile.hooks.readPackage(pkg, context) : pkg;
diff --git a/libraries/rush-lib/src/logic/pnpm/SubspacePnpmfileConfiguration.ts b/libraries/rush-lib/src/logic/pnpm/SubspacePnpmfileConfiguration.ts
index 17bf18a5a5..dc5c64fd8d 100644
--- a/libraries/rush-lib/src/logic/pnpm/SubspacePnpmfileConfiguration.ts
+++ b/libraries/rush-lib/src/logic/pnpm/SubspacePnpmfileConfiguration.ts
@@ -13,7 +13,7 @@ import type { PnpmPackageManager } from '../../api/packageManager/PnpmPackageMan
 import { RushConstants } from '../RushConstants';
 import type { Subspace } from '../../api/Subspace';
 import type { PnpmOptionsConfiguration } from './PnpmOptionsConfiguration';
-import { getEffectivePnpmOptions } from './EffectivePnpmOptions';
+import { getEffectivePnpmCatalogs, getEffectivePnpmOptions, type PnpmCatalogs } from './EffectivePnpmOptions';
 
 /**
  * Loads PNPM's pnpmfile.js configuration, and invokes it to preprocess package.json files,
@@ -76,7 +76,8 @@ export class SubspacePnpmfileConfiguration {
         packageName,
         projectRelativeFolder,
         packageVersion: packageJson.version,
-        injectedDependencies: Array.from(projectNameToInjectedDependenciesMap.get(packageName) || [])
+        injectedDependencies: Array.from(projectNameToInjectedDependenciesMap.get(packageName) || []),
+        subspaceName: project.subspace.subspaceName
       };
       (subspace.contains(project) ? subspaceProjects : workspaceProjects)[packageName] = workspaceProjectInfo;
     }
@@ -87,6 +88,15 @@ export class SubspacePnpmfileConfiguration {
       semverPath: Import.resolveModule({ modulePath: 'semver', baseFolderPath: __dirname })
     };
 
+    const catalogsBySubspaceName: Record<string, PnpmCatalogs> | undefined = _getInjectedProjectCatalogs(
+      rushConfiguration,
+      subspace,
+      projectNameToInjectedDependenciesMap
+    );
+    if (catalogsBySubspaceName) {
+      settings.catalogsBySubspaceName = catalogsBySubspaceName;
+    }
+
     // common/config/subspaces/<subspace_name>/.pnpmfile.cjs
     const userPnpmfilePath: string = path.join(
       subspace.getVariantDependentSubspaceConfigFolderPath(variant),
@@ -100,6 +110,35 @@ export class SubspacePnpmfileConfiguration {
   }
 }
 
+function _getInjectedProjectCatalogs(
+  rushConfiguration: RushConfiguration,
+  subspace: Subspace,
+  projectNameToInjectedDependenciesMap: Map<string, Set<string>>
+): Record<string, PnpmCatalogs> | undefined {
+  let result: Record<string, PnpmCatalogs> | undefined;
+  const visitedSubspaceNames: Set<string> = new Set([subspace.subspaceName]);
+  for (const injectedDependencies of projectNameToInjectedDependenciesMap.values()) {
+    for (const injectedDependencyName of injectedDependencies) {
+      const injectedProject: RushConfigurationProject | undefined =
+        rushConfiguration.getProjectByName(injectedDependencyName);
+      if (!injectedProject || visitedSubspaceNames.has(injectedProject.subspace.subspaceName)) {
+        continue;
+      }
+
+      visitedSubspaceNames.add(injectedProject.subspace.subspaceName);
+      const catalogs: PnpmCatalogs | undefined = getEffectivePnpmCatalogs(
+        injectedProject.subspace,
+        rushConfiguration
+      );
+      if (catalogs) {
+        (result ??= {})[injectedProject.subspace.subspaceName] = catalogs;
+      }
+    }
+  }
+
+  return result;
+}
+
 function _getProjectNameToInjectedDependenciesMap(
   rushConfiguration: RushConfiguration,
   subspace: Subspace
diff --git a/libraries/rush-lib/src/logic/pnpm/test/SubspaceGlobalPnpmfileShim.test.ts b/libraries/rush-lib/src/logic/pnpm/test/SubspaceGlobalPnpmfileShim.test.ts
new file mode 100644
index 0000000000..fa2110039c
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/SubspaceGlobalPnpmfileShim.test.ts
@@ -0,0 +1,91 @@
+// Copyright (c) Microsoft Corporation. All rights reserved. Licensed under the MIT license.
+// See LICENSE in the project root for license information.
+
+import type { IPackageJson } from '@rushstack/node-core-library';
+
+import { RushConfiguration } from '../../../api/RushConfiguration';
+import type { IPnpmfileContext, ISubspacePnpmfileShimSettings } from '../IPnpmfile';
+import { hooks, reset } from '../SubspaceGlobalPnpmfileShim';
+import { SubspacePnpmfileConfiguration } from '../SubspacePnpmfileConfiguration';
+
+// "catalog-consumer" (consumer-subspace) injects "catalog-provider" (default). Each subspace has its own catalogs.
+const INJECTED_SUBSPACE_CATALOGS_RUSH_JSON: string = `${__dirname}/repoWithInjectedSubspaceCatalogs/rush.json`;
+
+describe('SubspaceGlobalPnpmfileShim', () => {
+  let rushConfiguration: RushConfiguration;
+  let settings: ISubspacePnpmfileShimSettings;
+
+  function readPackage(pkg: IPackageJson): IPackageJson {
+    const context: IPnpmfileContext = {
+      log: () => {},
+      splitWorkspacePnpmfileShimSettings: settings
+    } as IPnpmfileContext;
+    return hooks.readPackage!(pkg, context);
+  }
+
+  function getPackageJson(packageName: string): IPackageJson {
+    return JSON.parse(JSON.stringify(rushConfiguration.getProjectByName(packageName)!.packageJson));
+  }
+
+  beforeEach(() => {
+    reset();
+    rushConfiguration = RushConfiguration.loadFromConfigurationFile(INJECTED_SUBSPACE_CATALOGS_RUSH_JSON);
+    settings = SubspacePnpmfileConfiguration.getSubspacePnpmfileShimSettings(
+      rushConfiguration,
+      rushConfiguration.getSubspace('consumer-subspace'),
+      undefined
+    );
+  });
+
+  afterEach(() => {
+    reset();
+  });
+
+  describe('readPackage', () => {
+    it("resolves catalog references of an injected project with its own subspace's catalogs", () => {
+      const pkg: IPackageJson = readPackage(getPackageJson('catalog-provider'));
+
+      // From the default subspace's catalogs, not consumer-subspace's
+      expect(pkg.dependencies).toEqual({
+        'left-pad': '^1.3.0',
+        lodash: '^4.17.21',
+        semver: '~7.5.4',
+        'transitive-provider': 'file:../transitive-provider'
+      });
+      expect(pkg.optionalDependencies).toEqual({ fsevents: '~2.3.2' });
+      expect(pkg.peerDependencies).toEqual({ typescript: '~5.3.0' });
+      // PNPM does not install the devDependencies of an external package
+      expect(pkg.devDependencies).toEqual({ jest: 'catalog:' });
+    });
+
+    it("does not change the catalog references of the subspace's own projects", () => {
+      const pkg: IPackageJson = readPackage(getPackageJson('catalog-consumer'));
+      expect(pkg.dependencies).toEqual({
+        lodash: 'catalog:',
+        'catalog-provider': 'file:../catalog-provider'
+      });
+    });
+
+    it('reports an error when the catalog does not have an entry for the dependency', () => {
+      const pkg: IPackageJson = getPackageJson('catalog-provider');
+      pkg.dependencies!['missing-package'] = 'catalog:';
+      expect(() => readPackage(pkg)).toThrow(
+        'The "catalog-provider" project depends on "missing-package@catalog:", but the "default" catalog of the "default" subspace has no "missing-package" entry.'
+      );
+    });
+
+    it('reports an error when the catalog does not exist', () => {
+      const pkg: IPackageJson = getPackageJson('catalog-provider');
+      pkg.optionalDependencies!.fsevents = 'catalog:missing-catalog';
+      expect(() => readPackage(pkg)).toThrow(
+        'The "catalog-provider" project depends on "fsevents@catalog:missing-catalog", but the "default" subspace does not define a "missing-catalog" catalog.'
+      );
+    });
+
+    it('reports an error when no catalogs are available for the subspace of the project', () => {
+      expect(() => readPackage(getPackageJson('unrelated'))).toThrow(
+        'The "unrelated" project depends on "lodash@catalog:", but no catalogs were found for the "unrelated-subspace" subspace.'
+      );
+    });
+  });
+});
diff --git a/libraries/rush-lib/src/logic/pnpm/test/SubspacePnpmfileConfiguration.test.ts b/libraries/rush-lib/src/logic/pnpm/test/SubspacePnpmfileConfiguration.test.ts
new file mode 100644
index 0000000000..7706c43c69
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/SubspacePnpmfileConfiguration.test.ts
@@ -0,0 +1,46 @@
+// Copyright (c) Microsoft Corporation. All rights reserved. Licensed under the MIT license.
+// See LICENSE in the project root for license information.
+
+import { RushConfiguration } from '../../../api/RushConfiguration';
+import type { ISubspacePnpmfileShimSettings } from '../IPnpmfile';
+import { SubspacePnpmfileConfiguration } from '../SubspacePnpmfileConfiguration';
+
+// "catalog-consumer" (consumer-subspace) injects "catalog-provider" (default). Each subspace has its own catalogs.
+const INJECTED_SUBSPACE_CATALOGS_RUSH_JSON: string = `${__dirname}/repoWithInjectedSubspaceCatalogs/rush.json`;
+
+describe(SubspacePnpmfileConfiguration.name, () => {
+  describe(SubspacePnpmfileConfiguration.getSubspacePnpmfileShimSettings.name, () => {
+    it('includes the catalogs of the subspaces of injected projects from other subspaces', () => {
+      const rushConfiguration: RushConfiguration = RushConfiguration.loadFromConfigurationFile(
+        INJECTED_SUBSPACE_CATALOGS_RUSH_JSON
+      );
+
+      const settings: ISubspacePnpmfileShimSettings =
+        SubspacePnpmfileConfiguration.getSubspacePnpmfileShimSettings(
+          rushConfiguration,
+          rushConfiguration.getSubspace('consumer-subspace'),
+          undefined
+        );
+
+      // Not consumer-subspace's own catalogs, nor those of unrelated-subspace, which has no injected projects
+      expect(settings.catalogsBySubspaceName).toEqual({
+        default: rushConfiguration.pnpmOptions.globalCatalogs
+      });
+    });
+
+    it('does not include catalogs for injected projects from the same subspace', () => {
+      const rushConfiguration: RushConfiguration = RushConfiguration.loadFromConfigurationFile(
+        `${__dirname}/../../../api/test/repoInjectedDeps/rush.json`
+      );
+
+      const settings: ISubspacePnpmfileShimSettings =
+        SubspacePnpmfileConfiguration.getSubspacePnpmfileShimSettings(
+          rushConfiguration,
+          rushConfiguration.defaultSubspace,
+          undefined
+        );
+      expect(settings.subspaceProjects.consumer.injectedDependencies).toEqual(['provider']);
+      expect(settings).not.toHaveProperty('catalogsBySubspaceName');
+    });
+  });
+});
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/catalog-consumer/package.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/catalog-consumer/package.json
new file mode 100644
index 0000000000..b89876da93
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/catalog-consumer/package.json
@@ -0,0 +1,13 @@
+{
+  "name": "catalog-consumer",
+  "version": "1.0.0",
+  "dependencies": {
+    "lodash": "catalog:",
+    "catalog-provider": "workspace:*"
+  },
+  "dependenciesMeta": {
+    "catalog-provider": {
+      "injected": true
+    }
+  }
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/catalog-provider/package.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/catalog-provider/package.json
new file mode 100644
index 0000000000..6e167affc6
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/catalog-provider/package.json
@@ -0,0 +1,19 @@
+{
+  "name": "catalog-provider",
+  "version": "1.0.0",
+  "dependencies": {
+    "left-pad": "^1.3.0",
+    "lodash": "catalog:default",
+    "semver": "catalog:",
+    "transitive-provider": "workspace:*"
+  },
+  "optionalDependencies": {
+    "fsevents": "catalog:"
+  },
+  "peerDependencies": {
+    "typescript": "catalog:tools"
+  },
+  "devDependencies": {
+    "jest": "catalog:"
+  }
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/experiments.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/experiments.json
new file mode 100644
index 0000000000..a20c6d2438
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/experiments.json
@@ -0,0 +1,3 @@
+{
+  "exemptDecoupledDependenciesBetweenSubspaces": true
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/pnpm-config.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/pnpm-config.json
new file mode 100644
index 0000000000..adc750f925
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/pnpm-config.json
@@ -0,0 +1,15 @@
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/pnpm-config.schema.json",
+  "useWorkspaces": true,
+  "globalCatalogs": {
+    "default": {
+      "fsevents": "~2.3.2",
+      "jest": "^29.0.0",
+      "lodash": "^4.17.21",
+      "semver": "~7.5.4"
+    },
+    "tools": {
+      "typescript": "~5.3.0"
+    }
+  }
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/subspaces.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/subspaces.json
new file mode 100644
index 0000000000..e95203d5d1
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/subspaces.json
@@ -0,0 +1,5 @@
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/subspaces.schema.json",
+  "subspacesEnabled": true,
+  "subspaceNames": ["consumer-subspace", "unrelated-subspace"]
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/version-policies.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/version-policies.json
new file mode 100644
index 0000000000..fe51488c70
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/rush/version-policies.json
@@ -0,0 +1 @@
+[]
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/consumer-subspace/common-versions.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/consumer-subspace/common-versions.json
new file mode 100644
index 0000000000..9280fe7b96
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/consumer-subspace/common-versions.json
@@ -0,0 +1,8 @@
+/**
+ * This configuration file specifies NPM dependency version selections that affect all projects
+ * in a Rush repo.  More documentation is available on the Rush website: https://rushjs.io
+ */
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/common-versions.schema.json",
+  "ensureConsistentVersions": true
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/consumer-subspace/pnpm-config.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/consumer-subspace/pnpm-config.json
new file mode 100644
index 0000000000..b6d29fc30a
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/consumer-subspace/pnpm-config.json
@@ -0,0 +1,10 @@
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/pnpm-config.schema.json",
+  "useWorkspaces": true,
+  "globalCatalogs": {
+    "default": {
+      "lodash": "^3.10.1",
+      "semver": "^6.0.0"
+    }
+  }
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/default/common-versions.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/default/common-versions.json
new file mode 100644
index 0000000000..9280fe7b96
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/default/common-versions.json
@@ -0,0 +1,8 @@
+/**
+ * This configuration file specifies NPM dependency version selections that affect all projects
+ * in a Rush repo.  More documentation is available on the Rush website: https://rushjs.io
+ */
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/common-versions.schema.json",
+  "ensureConsistentVersions": true
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/unrelated-subspace/common-versions.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/unrelated-subspace/common-versions.json
new file mode 100644
index 0000000000..9280fe7b96
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/unrelated-subspace/common-versions.json
@@ -0,0 +1,8 @@
+/**
+ * This configuration file specifies NPM dependency version selections that affect all projects
+ * in a Rush repo.  More documentation is available on the Rush website: https://rushjs.io
+ */
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/common-versions.schema.json",
+  "ensureConsistentVersions": true
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/unrelated-subspace/pnpm-config.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/unrelated-subspace/pnpm-config.json
new file mode 100644
index 0000000000..07cec4c4da
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/common/config/subspaces/unrelated-subspace/pnpm-config.json
@@ -0,0 +1,9 @@
+{
+  "$schema": "https://developer.microsoft.com/json-schemas/rush/v5/pnpm-config.schema.json",
+  "useWorkspaces": true,
+  "globalCatalogs": {
+    "default": {
+      "lodash": "^2.4.2"
+    }
+  }
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/rush.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/rush.json
new file mode 100644
index 0000000000..a29b8cc2a9
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/rush.json
@@ -0,0 +1,25 @@
+{
+  "rushVersion": "1.0.5",
+  "pnpmVersion": "9.15.0",
+
+  "projects": [
+    {
+      "packageName": "catalog-provider",
+      "projectFolder": "catalog-provider"
+    },
+    {
+      "packageName": "transitive-provider",
+      "projectFolder": "transitive-provider"
+    },
+    {
+      "packageName": "catalog-consumer",
+      "projectFolder": "catalog-consumer",
+      "subspaceName": "consumer-subspace"
+    },
+    {
+      "packageName": "unrelated",
+      "projectFolder": "unrelated",
+      "subspaceName": "unrelated-subspace"
+    }
+  ]
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/transitive-provider/package.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/transitive-provider/package.json
new file mode 100644
index 0000000000..241ac6813b
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/transitive-provider/package.json
@@ -0,0 +1,7 @@
+{
+  "name": "transitive-provider",
+  "version": "1.0.0",
+  "dependencies": {
+    "lodash": "catalog:"
+  }
+}
diff --git a/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/unrelated/package.json b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/unrelated/package.json
new file mode 100644
index 0000000000..2e8ae5e1a4
--- /dev/null
+++ b/libraries/rush-lib/src/logic/pnpm/test/repoWithInjectedSubspaceCatalogs/unrelated/package.json
@@ -0,0 +1,7 @@
+{
+  "name": "unrelated",
+  "version": "1.0.0",
+  "dependencies": {
+    "lodash": "catalog:"
+  }
+}