diff --git a/build-tools/packages/version-tools/src/internalVersionScheme.ts b/build-tools/packages/version-tools/src/internalVersionScheme.ts
index eba5ce025663..6707acb682e9 100644
--- a/build-tools/packages/version-tools/src/internalVersionScheme.ts
+++ b/build-tools/packages/version-tools/src/internalVersionScheme.ts
@@ -250,7 +250,12 @@ export function isInternalVersionRange(range: string, allowAnyPrereleaseId = fal
         return false;
     }
 
-    return isInternalVersionScheme(minVer, false, allowAnyPrereleaseId);
+    // if allowAnyPrereleaseId === true, then allowPrereleases is implied to be true
+    return isInternalVersionScheme(
+        minVer,
+        /* allowPrereleases */ allowAnyPrereleaseId,
+        allowAnyPrereleaseId,
+    );
 }
 
 /**
@@ -265,10 +270,10 @@ export function bumpInternalVersion(
     version: semver.SemVer | string,
     bumpType: VersionBumpTypeExtended,
 ): semver.SemVer {
-    validateVersionScheme(version);
-    const [pubVer, intVer, prereleaseId] = fromInternalScheme(version, false, true);
+    validateVersionScheme(version, true, undefined);
+    const [pubVer, intVer, prereleaseId] = fromInternalScheme(version, true, true);
     const newIntVer = bumpType === "current" ? intVer : intVer.inc(bumpType);
-    return toInternalScheme(pubVer, newIntVer, false, prereleaseId);
+    return toInternalScheme(pubVer, newIntVer, true, prereleaseId);
 }
 
 /**
@@ -290,7 +295,7 @@ export function getVersionRange(
     version: semver.SemVer | string,
     maxAutomaticBump: "minor" | "patch" | "~" | "^",
 ): string {
-    validateVersionScheme(version, false, undefined);
+    validateVersionScheme(version, true, undefined);
 
     const lowVersion = version;
     let highVersion: semver.SemVer;
diff --git a/build-tools/packages/version-tools/src/test/internalVersionScheme.test.ts b/build-tools/packages/version-tools/src/test/internalVersionScheme.test.ts
index 70ad42887ae4..c8b8a32a2d96 100644
--- a/build-tools/packages/version-tools/src/test/internalVersionScheme.test.ts
+++ b/build-tools/packages/version-tools/src/test/internalVersionScheme.test.ts
@@ -243,6 +243,20 @@ describe("internalScheme", () => {
             assert.isFalse(semver.satisfies(`2.0.0-internal.3.1.0`, range));
         });
 
+        it("caret ^ dependency equivalent for prerelease/dev versions", () => {
+            const input = `2.0.0-dev.1.2.3.12345`;
+            const expected = `>=2.0.0-dev.1.2.3.12345 <2.0.0-dev.2.0.0`;
+            const range = getVersionRange(input, "^");
+            assert.strictEqual(range, expected);
+        });
+
+        it("tilde ~ dependency equivalent for prerelease/dev versions", () => {
+            const input = `2.0.0-dev.1.2.3.12345`;
+            const expected = `>=2.0.0-dev.1.2.3.12345 <2.0.0-dev.1.3.0`;
+            const range = getVersionRange(input, "~");
+            assert.strictEqual(range, expected);
+        });
+
         /**
          * Builds that are produced from dev builds or other non-release builds don't have the "internal" prerelease
          * identifier intentionally to ensure they don't satisfy the caret/tilde-equivalent semver ranges we provide to