diff --git a/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesCodeLensParticipant.java b/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesCodeLensParticipant.java
index a0c08e3f12..c6bada0195 100644
--- a/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesCodeLensParticipant.java
+++ b/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesCodeLensParticipant.java
@@ -48,7 +48,8 @@ public XMLReferencesCodeLensParticipant(XMLReferencesPlugin plugin) {
 	@Override
 	public void doCodeLens(ICodeLensRequest request, List<CodeLens> lenses, CancelChecker cancelChecker) {
 		DOMDocument document = request.getDocument();
-		Collection<ReferenceLink> links = SearchEngine.getInstance().searchLinks(document, plugin.getReferencesSettings(),
+		Collection<ReferenceLink> links = SearchEngine.getInstance().searchLinks(document,
+				plugin.getReferencesSettings(),
 				cancelChecker);
 		if (links.isEmpty()) {
 			return;
@@ -57,6 +58,10 @@ public void doCodeLens(ICodeLensRequest request, List<CodeLens> lenses, CancelCh
 		Map<DOMElement, CodeLens> cache = new HashMap<>();
 		for (ReferenceLink link : links) {
 			for (SearchNode to : link.getTos()) {
+				if (document != to.getOwnerDocument()) {
+					// The 'to' search node belongs to an included document, ignore it.
+					continue;
+				}
 				// Increment references count Codelens for the given target element
 				DOMNode toNode = to.getNode();
 				DOMElement toElement = toNode.isAttribute() ? ((DOMAttr) toNode).getOwnerElement()
diff --git a/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesDiagnosticParticipant.java b/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesDiagnosticParticipant.java
index e61396b6f1..5561a6e1e6 100644
--- a/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesDiagnosticParticipant.java
+++ b/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/participants/XMLReferencesDiagnosticParticipant.java
@@ -57,6 +57,10 @@ public void doDiagnostics(DOMDocument document, List<Diagnostic> diagnostics,
 
 		for (ReferenceLink link : links) {
 			for (SearchNode from : link.getFroms()) {
+				if (document != from.getOwnerDocument()) {
+					// The 'from' search node belongs to an included document, ignore it.
+					continue;
+				}
 				// Validate the syntax of from node.
 				if (!from.isValid()) {
 					if (from.getValidationStatus() == ValidationStatus.INVALID_PREFIX) {
diff --git a/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/search/SearchEngine.java b/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/search/SearchEngine.java
index 8119f14dd8..18004e610a 100644
--- a/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/search/SearchEngine.java
+++ b/org.eclipse.lemminx/src/main/java/org/eclipse/lemminx/extensions/references/search/SearchEngine.java
@@ -75,6 +75,9 @@ public Collection<ReferenceLink> searchLinks(DOMDocument document, XMLReferences
 		SearchQuery query = SearchQueryFactory.createQuery(document,
 				settings, QueryDirection.BOTH);
 		if (query != null) {
+			// Search references in included files
+			query.setSearchInIncludedFiles(true);
+			
 			final Map<XMLReferenceExpression, ReferenceLink> linksMap = new HashMap<>();
 			SearchEngine.getInstance().search(query,
 					(fromSearchNode, toSearchNode, expression) -> {
diff --git a/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesCodeLensExtensionsTest.java b/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesCodeLensExtensionsTest.java
index fa61e25382..a9bc863558 100644
--- a/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesCodeLensExtensionsTest.java
+++ b/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesCodeLensExtensionsTest.java
@@ -15,6 +15,7 @@
 import static org.eclipse.lemminx.XMLAssert.r;
 import static org.eclipse.lemminx.client.ClientCommands.SHOW_REFERENCES;
 
+import java.io.File;
 import java.util.Arrays;
 import java.util.function.Consumer;
 
@@ -125,6 +126,32 @@ public void attrToText() throws BadLocationException {
 				cl(r(3, 7, 3, 13), "1 reference", SHOW_REFERENCES));
 	}
 
+	@Test
+	public void docbookWithoutInclude() throws BadLocationException {
+		String xml = "<docbook>\r\n"
+				+ "	<xref linkend=\"s1\" />\r\n"
+				// [1 reference]
+				+ "	<section id=\"s1\" />\r\n"
+				+ "	<xref linkend=\"ch1\" />\r\n"
+				// + " <xi:include href=\"sub-book.xml\" />\r\n"
+				+ "</docbook>";
+		testCodeLensFor(xml, new File("src/test/resources/xml/docbook.xml").toURI().toString(), //
+				cl(r(2, 10, 2, 17), "1 reference", SHOW_REFERENCES));
+	}
+
+	@Test
+	public void docbookWithInclude() throws BadLocationException {
+		String xml = "<docbook>\r\n"
+				+ "	<xref linkend=\"s1\" />\r\n"
+				// [3 references]
+				+ "	<section id=\"s1\" />\r\n"
+				+ "	<xref linkend=\"ch1\" />\r\n"
+				+ "	<xi:include href=\"sub-book.xml\" />\r\n"
+				+ "</docbook>";
+		testCodeLensFor(xml, new File("src/test/resources/xml/docbook.xml").toURI().toString(), //
+				cl(r(2, 10, 2, 17), "3 references", SHOW_REFERENCES));
+	}
+
 	private static void testCodeLensFor(String value, String fileURI, CodeLens... expected) {
 		XMLLanguageService xmlLanguageService = new XMLLanguageService();
 		xmlLanguageService.getExtensions();
diff --git a/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesDiagnosticsExtensionsTest.java b/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesDiagnosticsExtensionsTest.java
index 93572221d4..22a56fa819 100644
--- a/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesDiagnosticsExtensionsTest.java
+++ b/org.eclipse.lemminx/src/test/java/org/eclipse/lemminx/extensions/references/XMLReferencesDiagnosticsExtensionsTest.java
@@ -13,6 +13,7 @@
 
 import static org.eclipse.lemminx.XMLAssert.d;
 
+import java.io.File;
 import java.util.function.Consumer;
 
 import org.eclipse.lemminx.AbstractCacheBasedTest;
@@ -64,7 +65,6 @@ public void invalidPrefix() throws BadLocationException {
 						"Undefined reference '#C': nothing that matches the expression '@xml:id' defines 'C'.",
 						"xml", DiagnosticSeverity.Warning));
 	}
-	
 
 	@Test
 	public void noUndefinedReferences() throws BadLocationException {
@@ -76,6 +76,32 @@ public void noUndefinedReferences() throws BadLocationException {
 		testDiagnosticsFor(xml, "file:///test/foo.xml");
 	}
 
+	@Test
+	public void docbookWithoutInclude() throws BadLocationException {
+		String xml = "<docbook>\r\n"
+				+ "	<xref linkend=\"s1\" />\r\n"
+				+ "	<section id=\"s1\" />\r\n"
+				+ "	<xref linkend=\"ch1\" />\r\n"
+				// + " <xi:include href=\"sub-book.xml\"
+				// xmlns:xi=\"http://www.w3.org/2001/XInclude\" />\r\n"
+				+ "</docbook>";
+		testDiagnosticsFor(xml, new File("src/test/resources/xml/docbook.xml").toURI().toString(),
+				d(3, 16, 3, 19, XMLReferencesErrorCode.UndefinedReference,
+						"Undefined reference 'ch1': nothing that matches the expression '@id' defines 'ch1'.",
+						"xml", DiagnosticSeverity.Warning));
+	}
+
+	@Test
+	public void docbookWithInclude() throws BadLocationException {
+		String xml = "<docbook>\r\n"
+				+ "	<xref linkend=\"s1\" />\r\n"
+				+ "	<section id=\"s1\" />\r\n"
+				+ "	<xref linkend=\"ch1\" />\r\n"
+				+ "	<xi:include href=\"sub-book.xml\" xmlns:xi=\"http://www.w3.org/2001/XInclude\" />\r\n"
+				+ "</docbook>";
+		testDiagnosticsFor(xml, new File("src/test/resources/xml/docbook.xml").toURI().toString());
+	}
+
 	public static void testDiagnosticsFor(String xml, String fileURI,
 			Diagnostic... expected) {
 		Consumer<XMLLanguageService> config = ls -> {
diff --git a/org.eclipse.lemminx/src/test/resources/xml/sub-book.xml b/org.eclipse.lemminx/src/test/resources/xml/sub-book.xml
new file mode 100644
index 0000000000..d4fca24c8c
--- /dev/null
+++ b/org.eclipse.lemminx/src/test/resources/xml/sub-book.xml
@@ -0,0 +1,8 @@
+<book>
+	<chapter id="ch1" />
+	<chapter id="ch2"/>
+	<xref linkend="s1" />
+	<xref linkend="s1" />
+	<xref linkend="ch1" />
+	<xref linkend="ch1" />
+</book>
\ No newline at end of file