diff --git a/package.json b/package.json
index 16c57e12..ffc871fe 100644
--- a/package.json
+++ b/package.json
@@ -101,6 +101,7 @@
     "the-answer": "^1.0.0",
     "tiny-json-http": "^7.0.2",
     "ts-loader": "^9.3.0",
+    "tsconfck": "^1.2.2",
     "tsconfig-paths": "^3.7.0",
     "tsconfig-paths-webpack-plugin": "^3.2.0",
     "twilio": "^3.23.2",
diff --git a/readme.md b/readme.md
index f3485a8d..c42f958c 100644
--- a/readme.md
+++ b/readme.md
@@ -72,6 +72,7 @@ Outputs the Node.js compact build of `input.js` into `dist/index.js`.
   --license [file]         Adds a file containing licensing information to the output
   --stats-out [file]       Emit webpack stats as json to the specified output file
   --target [es]            ECMAScript target to use for output (default: es2015)
+  --tsconfig-path [file]   Specify tsconfig.json to use for build (default: resolve tsconfig.json from entrypoint)
                            Learn more: https://webpack.js.org/configuration/target
   -d, --debug              Show debug logs
 ```
diff --git a/src/cli.js b/src/cli.js
index eeeaebb7..9bbbf7de 100755
--- a/src/cli.js
+++ b/src/cli.js
@@ -37,6 +37,7 @@ Options:
   --license [file]         Adds a file containing licensing information to the output
   --stats-out [file]       Emit webpack stats as json to the specified output file
   --target [es]            ECMAScript target to use for output (default: es2015)
+  --tsconfig-path [file]   Specify tsconfig.json to use for build (default: resolve tsconfig.json from entrypoint)
                            Learn more: https://webpack.js.org/configuration/target
   -d, --debug              Show debug logs
 `;
@@ -154,7 +155,8 @@ async function runCmd (argv, stdout, stderr) {
       "-t": "--transpile-only",
       "--license": String,
       "--stats-out": String,
-      "--target": String
+      "--target": String,
+      "--tsconfig-path": String
     }, {
       permissive: false,
       argv
@@ -250,7 +252,8 @@ async function runCmd (argv, stdout, stderr) {
           transpileOnly: args["--transpile-only"],
           license: args["--license"],
           quiet,
-          target: args["--target"]
+          target: args["--target"],
+          tsconfigPath: args["--tsconfig-path"]
         }
       );
 
@@ -343,8 +346,9 @@ async function runCmd (argv, stdout, stderr) {
         }
       }
       if (args["--watch"]) {
-        ncc.handler(handler);
-        ncc.rebuild(() => {
+        const nccWithWatchOption = await ncc
+        nccWithWatchOption.handler(handler);
+        nccWithWatchOption.rebuild(() => {
           if (ps)
             ps.kill();
           startTime = Date.now();
diff --git a/src/index.js b/src/index.js
index 593ea088..c3bf8af7 100644
--- a/src/index.js
+++ b/src/index.js
@@ -6,13 +6,13 @@ const webpack = require("webpack");
 const MemoryFS = require("memory-fs");
 const terser = require("terser");
 const tsconfigPaths = require("tsconfig-paths");
-const { loadTsconfig } = require("tsconfig-paths/lib/tsconfig-loader");
 const TsconfigPathsPlugin = require("tsconfig-paths-webpack-plugin");
 const shebangRegEx = require('./utils/shebang');
 const nccCacheDir = require("./utils/ncc-cache-dir");
 const LicenseWebpackPlugin = require('license-webpack-plugin').LicenseWebpackPlugin;
 const { version: nccVersion } = require('../package.json');
 const { hasTypeModule } = require('./utils/has-type-module');
+const { loadTsconfigOptions } = require('./utils/load-tsconfig-options');
 
 // support glob graceful-fs
 fs.gracefulify(require("fs"));
@@ -32,7 +32,7 @@ const defaultPermissions = 0o666;
 const relocateLoader = eval('require(__dirname + "/loaders/relocate-loader.js")');
 
 module.exports = ncc;
-function ncc (
+async function ncc (
   entry,
   {
     cache,
@@ -57,7 +57,8 @@ function ncc (
     production = true,
     // webpack defaults to `module` and `main`, but that's
     // not really what node.js supports, so we reset it
-    mainFields = ['main']
+    mainFields = ['main'],
+    tsconfigPath = undefined
   } = {}
 ) {
   // v8 cache not supported for ES modules
@@ -108,21 +109,16 @@ function ncc (
     existingAssetNames.push(`${filename}.cache`);
     existingAssetNames.push(`${filename}.cache${ext}`);
   }
+  const fullTsconfig = await loadTsconfigOptions(tsconfigPath, {
+    base: process.cwd(),
+    start: dirname(entry),
+    filename: 'tsconfig.json'
+  });
   const resolvePlugins = [];
   // add TsconfigPathsPlugin to support `paths` resolution in tsconfig
   // we need to catch here because the plugin will
   // error if there's no tsconfig in the working directory
-  let fullTsconfig = {};
   try {
-    const configFileAbsolutePath = walkParentDirs({
-      base: process.cwd(),
-      start: dirname(entry),
-      filename: 'tsconfig.json',
-    });
-    fullTsconfig = loadTsconfig(configFileAbsolutePath) || {
-      compilerOptions: {}
-    };
-
     const tsconfigPathsOptions = { silent: true }
     if (fullTsconfig.compilerOptions.allowJs) {
       tsconfigPathsOptions.extensions = SUPPORTED_EXTENSIONS
@@ -668,25 +664,3 @@ function getFlatFiles(mfsData, output, getAssetMeta, tsconfig, curBase = "") {
     }
   }
 }
-
-// Adapted from https://github.com/vercel/vercel/blob/18bec983aefbe2a77bd14eda6fca59ff7e956d8b/packages/build-utils/src/fs/run-user-scripts.ts#L289-L310
-function walkParentDirs({
-  base,
-  start,
-  filename,
-}) {
-  let parent = '';
-
-  for (let current = start; base.length <= current.length; current = parent) {
-    const fullPath = join(current, filename);
-
-    // eslint-disable-next-line no-await-in-loop
-    if (fs.existsSync(fullPath)) {
-      return fullPath;
-    }
-
-    parent = dirname(current);
-  }
-
-  return null;
-}
diff --git a/src/utils/load-tsconfig-options.js b/src/utils/load-tsconfig-options.js
new file mode 100644
index 00000000..e7a997b2
--- /dev/null
+++ b/src/utils/load-tsconfig-options.js
@@ -0,0 +1,55 @@
+const { join, dirname, resolve } = require('path');
+const fs = require('fs');
+const { parse } = require('tsconfck');
+
+const DEFAULT_TSCONFIG_OPTIONS = {
+  compilerOptions: {}
+};
+
+/**
+ * @typedef {object} LoadTsconfigInit
+ * @property {string} base
+ * @property {string} start
+ * @property {string} filename
+ */
+
+/**
+ * @description Adapted from https://github.com/vercel/vercel/blob/18bec983aefbe2a77bd14eda6fca59ff7e956d8b/packages/build-utils/src/fs/run-user-scripts.ts#L289-L310
+ * @param {LoadTsconfigInit}
+ * @returns {string | null}
+ */
+function walkParentDirs({ base, start, filename }) {
+  let parent = '';
+
+  for (let current = start; base.length <= current.length; current = parent) {
+    const fullPath = join(current, filename);
+
+    if (fs.existsSync(fullPath)) {
+      return fullPath;
+    }
+
+    parent = dirname(current);
+  }
+
+  return null;
+}
+
+/**
+ * @param {string | undefined} configPath
+ * @param {LoadTsconfigInit}
+ * @returns {Promise<object>}
+ */
+exports.loadTsconfigOptions = async function (configPath, { base, start, filename }) {
+  // throw error if `configPath` does not exist
+  const tsconfig = configPath != null ? resolve(configPath) : walkParentDirs({ base, start, filename });
+  if (tsconfig == null) {
+    return DEFAULT_TSCONFIG_OPTIONS;
+  }
+  try {
+    const result = await parse(tsconfig);
+    return result.tsconfig;
+  } catch (error) {
+    console.error(error);
+    throw error;
+  }
+};
diff --git a/test/cli.js b/test/cli.js
index 8df03fda..c29d6ff7 100644
--- a/test/cli.js
+++ b/test/cli.js
@@ -70,6 +70,16 @@ module.exports = [
     args: ["run", "-t", "test/fixtures/with-type-errors/ts-error.ts"],
     expect: { code: 0 }
   },
+  {
+    args: ["run", "test/fixtures/ts-extends/any-args.ts"],
+    expect (code, stdout, stderr) {
+      return code === 1 && stderr.toString().indexOf('any-args.ts(4,20)') !== -1 && stderr.toString().indexOf('TS7006') !== -1;
+    }
+  },
+  {
+    args: ["run", "test/fixtures/ts-extends/any-args.ts", "--tsconfig-path", "test/fixtures/ts-extends/tsconfig.build.json"],
+    expect: { code: 0 }
+  },
   {
     args: ["build", "-o", "tmp", "test/fixtures/test.cjs"],
     expect (code, stdout, stderr) {
diff --git a/test/fixtures/ts-extends/any-args.ts b/test/fixtures/ts-extends/any-args.ts
new file mode 100644
index 00000000..c9dcb73f
--- /dev/null
+++ b/test/fixtures/ts-extends/any-args.ts
@@ -0,0 +1,6 @@
+/**
+ * throws error (TS7006: an implicit 'any' type) if strict options is set to true, or otherwise passes compilation
+ */
+function something(args) {
+  return args;
+}
diff --git a/test/fixtures/ts-extends/tsconfig.build.json b/test/fixtures/ts-extends/tsconfig.build.json
new file mode 100644
index 00000000..5787af45
--- /dev/null
+++ b/test/fixtures/ts-extends/tsconfig.build.json
@@ -0,0 +1,6 @@
+{
+  "extends": "./tsconfig.json",
+  "compilerOptions": {
+    "strict": false
+  }
+}
diff --git a/test/fixtures/ts-extends/tsconfig.json b/test/fixtures/ts-extends/tsconfig.json
new file mode 100644
index 00000000..aee0ec94
--- /dev/null
+++ b/test/fixtures/ts-extends/tsconfig.json
@@ -0,0 +1,5 @@
+{
+  "compilerOptions": {
+    "strict": true
+  }
+}
diff --git a/yarn.lock b/yarn.lock
index 680a6111..d8284b8d 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -14854,6 +14854,11 @@ ts-loader@^9.3.0:
     micromatch "^4.0.0"
     semver "^7.3.4"
 
+tsconfck@^1.2.2:
+  version "1.2.2"
+  resolved "https://registry.yarnpkg.com/tsconfck/-/tsconfck-1.2.2.tgz#3f7ac55bcd16b8d89ff05ba8e27057f3375828c8"
+  integrity sha512-x5YpjOqjJnMs1EsJvQBQbrysrY32eGoZRRr5YvbN1hwlrXKc7jiphCOUrT7xbFdOWk8sh+EtMYbGPbTO8rDmcw==
+
 tsconfig-paths-webpack-plugin@^3.2.0:
   version "3.5.1"
   resolved "https://registry.yarnpkg.com/tsconfig-paths-webpack-plugin/-/tsconfig-paths-webpack-plugin-3.5.1.tgz#e4dbf492a20dca9caab60086ddacb703afc2b726"