diff --git a/packages/js/src/utils/package-json/update-package-json.spec.ts b/packages/js/src/utils/package-json/update-package-json.spec.ts
index 9209b21eb3d5c..0adb33c728c3f 100644
--- a/packages/js/src/utils/package-json/update-package-json.spec.ts
+++ b/packages/js/src/utils/package-json/update-package-json.spec.ts
@@ -440,8 +440,8 @@ describe('updatePackageJson', () => {
     expect(distPackageJson).toMatchInlineSnapshot(`
       {
         "dependencies": {
-          "external1": "1.0.0",
-          "external2": "4.5.6",
+          "external1": "~1.0.0",
+          "external2": "^4.0.0",
         },
         "main": "./main.js",
         "name": "@org/lib1",
diff --git a/packages/nx/src/plugins/js/package-json/create-package-json.spec.ts b/packages/nx/src/plugins/js/package-json/create-package-json.spec.ts
index 5a84a65557375..3fd7406f27b87 100644
--- a/packages/nx/src/plugins/js/package-json/create-package-json.spec.ts
+++ b/packages/nx/src/plugins/js/package-json/create-package-json.spec.ts
@@ -1,11 +1,15 @@
 import * as fs from 'fs';
 
 import * as configModule from '../../../config/configuration';
-import { DependencyType } from '../../../config/project-graph';
+import { DependencyType, ProjectGraph } from '../../../config/project-graph';
 import * as hashModule from '../../../hasher/hasher';
 import { createPackageJson } from './create-package-json';
 import * as fileutilsModule from '../../../utils/fileutils';
 
+jest.mock('../../../utils/workspace-root', () => ({
+  workspaceRoot: '/root',
+}));
+
 describe('createPackageJson', () => {
   it('should add additional dependencies', () => {
     jest.spyOn(fs, 'existsSync').mockReturnValue(false);
@@ -499,4 +503,214 @@ describe('createPackageJson', () => {
     );
     expect(filterUsingGlobPatternsSpy).toHaveBeenCalledTimes(4);
   });
+
+  describe('parsing "package.json" versions', () => {
+    const appDependencies = [
+      { source: 'app1', target: 'npm:@nx/devkit', type: 'static' },
+      { source: 'app1', target: 'npm:typescript', type: 'static' },
+    ];
+
+    const libDependencies = [
+      { source: 'lib1', target: 'npm:@nx/devkit', type: 'static' },
+      { source: 'lib1', target: 'npm:tslib', type: 'static' },
+      { source: 'lib1', target: 'npm:typescript', type: 'static' },
+    ];
+
+    const graph: ProjectGraph = {
+      nodes: {
+        app1: {
+          type: 'app',
+          name: 'app1',
+          data: {
+            files: [
+              {
+                file: '/root/apps/app1/src/main.ts',
+                hash: '',
+                dependencies: appDependencies,
+              },
+            ],
+            targets: {},
+            root: '/root/apps/app1',
+          },
+        },
+        lib1: {
+          type: 'lib',
+          name: 'lib1',
+          data: {
+            files: [
+              {
+                file: '/root/libs/lib1/index.ts',
+                hash: '',
+                dependencies: libDependencies,
+              },
+            ],
+            targets: {},
+            root: '/root/libs/lib1',
+          },
+        },
+      },
+      externalNodes: {
+        'npm:@nx/devkit': {
+          type: 'npm',
+          name: 'npm:@nx/devkit',
+          data: { version: '16.0.0', hash: '', packageName: '@nx/devkit' },
+        },
+        'npm:nx': {
+          type: 'npm',
+          name: 'npm:nx',
+          data: { version: '16.0.0', hash: '', packageName: 'nx' },
+        },
+        'npm:tslib': {
+          type: 'npm',
+          name: 'npm:tslib',
+          data: { version: '2.4.4', hash: '', packageName: 'tslib' },
+        },
+        'npm:typescript': {
+          type: 'npm',
+          name: 'npm:typescript',
+          data: { version: '4.9.5', hash: '', packageName: 'typescript' },
+        },
+      },
+      dependencies: {
+        app1: appDependencies,
+        lib1: libDependencies,
+      },
+    };
+
+    const rootPackageJson = () => ({
+      dependencies: {
+        '@nx/devkit': '~16.0.0',
+        nx: '> 14',
+        typescript: '^4.8.2',
+        tslib: '~2.4.0',
+      },
+    });
+
+    const projectPackageJson = () => ({
+      name: 'other-name',
+      version: '1.2.3',
+      dependencies: {
+        typescript: '^4.8.4',
+        random: '1.0.0',
+      },
+    });
+
+    const spies = [];
+
+    afterEach(() => {
+      while (spies.length > 0) {
+        spies.pop().mockRestore();
+      }
+    });
+
+    it('should use fixed versions when creating package json for apps', () => {
+      spies.push(
+        jest
+          .spyOn(fileutilsModule, 'readJsonFile')
+          .mockImplementation((path) => {
+            if (path === '/root/package.json') {
+              return rootPackageJson();
+            }
+          })
+      );
+
+      expect(createPackageJson('app1', graph)).toEqual({
+        dependencies: {
+          '@nx/devkit': '16.0.0',
+          nx: '16.0.0',
+          typescript: '4.9.5',
+        },
+        name: 'app1',
+        version: '0.0.1',
+      });
+    });
+
+    it('should override fixed versions with local ranges when creating package json for apps', () => {
+      spies.push(
+        jest.spyOn(fs, 'existsSync').mockImplementation((path) => {
+          if (path === '/root/apps/app1/package.json') {
+            return true;
+          }
+        })
+      );
+      spies.push(
+        jest
+          .spyOn(fileutilsModule, 'readJsonFile')
+          .mockImplementation((path) => {
+            if (path === '/root/package.json') {
+              return rootPackageJson();
+            }
+            if (path === '/root/apps/app1/package.json') {
+              return projectPackageJson();
+            }
+          })
+      );
+
+      expect(createPackageJson('app1', graph)).toEqual({
+        dependencies: {
+          '@nx/devkit': '16.0.0',
+          nx: '16.0.0',
+          random: '1.0.0',
+          typescript: '^4.8.4',
+        },
+        name: 'other-name',
+        version: '1.2.3',
+      });
+    });
+
+    it('should use range versions when creating package json for libs', () => {
+      spies.push(
+        jest
+          .spyOn(fileutilsModule, 'readJsonFile')
+          .mockImplementation((path) => {
+            if (path === '/root/package.json') {
+              return rootPackageJson();
+            }
+          })
+      );
+
+      expect(createPackageJson('lib1', graph)).toEqual({
+        dependencies: {
+          '@nx/devkit': '~16.0.0',
+          tslib: '~2.4.0',
+          typescript: '^4.8.2',
+        },
+        name: 'lib1',
+        version: '0.0.1',
+      });
+    });
+
+    it('should override range versions with local ranges when creating package json for libs', () => {
+      spies.push(
+        jest.spyOn(fs, 'existsSync').mockImplementation((path) => {
+          if (path === '/root/libs/lib1/package.json') {
+            return true;
+          }
+        })
+      );
+      spies.push(
+        jest
+          .spyOn(fileutilsModule, 'readJsonFile')
+          .mockImplementation((path) => {
+            if (path === '/root/package.json') {
+              return rootPackageJson();
+            }
+            if (path === '/root/libs/lib1/package.json') {
+              return projectPackageJson();
+            }
+          })
+      );
+
+      expect(createPackageJson('lib1', graph)).toEqual({
+        dependencies: {
+          '@nx/devkit': '~16.0.0',
+          random: '1.0.0',
+          tslib: '~2.4.0',
+          typescript: '^4.8.4',
+        },
+        name: 'other-name',
+        version: '1.2.3',
+      });
+    });
+  });
 });
diff --git a/packages/nx/src/plugins/js/package-json/create-package-json.ts b/packages/nx/src/plugins/js/package-json/create-package-json.ts
index 298a04970a3c4..f56adef38f4fb 100644
--- a/packages/nx/src/plugins/js/package-json/create-package-json.ts
+++ b/packages/nx/src/plugins/js/package-json/create-package-json.ts
@@ -36,6 +36,7 @@ export function createPackageJson(
   } = {}
 ): PackageJson {
   const projectNode = graph.nodes[projectName];
+  const isLibrary = projectNode.type === 'lib';
 
   const { selfInputs, dependencyInputs } = options.target
     ? getTargetInputs(readNxJson(), projectNode, options.target)
@@ -91,6 +92,18 @@ export function createPackageJson(
     } catch (e) {}
   }
 
+  const getVersion = (
+    packageName,
+    version,
+    section: 'devDependencies' | 'dependencies'
+  ) => {
+    return (
+      packageJson[section][packageName] ||
+      (isLibrary && rootPackageJson[section]?.[packageName]) ||
+      version
+    );
+  };
+
   const rootPackageJson = readJsonFile(
     `${options.root || workspaceRoot}/package.json`
   );
@@ -103,44 +116,64 @@ export function createPackageJson(
       // don't store dev dependencies for production
       if (!options.isProduction) {
         packageJson.devDependencies ??= {};
-        packageJson.devDependencies[packageName] = version;
+        packageJson.devDependencies[packageName] = getVersion(
+          packageName,
+          version,
+          'devDependencies'
+        );
       }
     } else {
       if (!packageJson.peerDependencies?.[packageName]) {
         packageJson.dependencies ??= {};
-        packageJson.dependencies[packageName] = version;
+        packageJson.dependencies[packageName] = getVersion(
+          packageName,
+          version,
+          'dependencies'
+        );
       }
     }
   });
-  Object.entries(npmDeps.peerDependencies).forEach(([packageName, version]) => {
-    if (!packageJson.peerDependencies?.[packageName]) {
-      if (rootPackageJson.dependencies?.[packageName]) {
-        packageJson.dependencies ??= {};
-        packageJson.dependencies[packageName] = version;
-        return;
-      }
+  if (!isLibrary) {
+    Object.entries(npmDeps.peerDependencies).forEach(
+      ([packageName, version]) => {
+        if (!packageJson.peerDependencies?.[packageName]) {
+          if (rootPackageJson.dependencies?.[packageName]) {
+            packageJson.dependencies ??= {};
+            packageJson.dependencies[packageName] = getVersion(
+              packageName,
+              version,
+              'dependencies'
+            );
+            return;
+          }
 
-      const isOptionalPeer =
-        npmDeps.peerDependenciesMeta[packageName]?.optional;
-      if (!isOptionalPeer) {
-        if (
-          !options.isProduction ||
-          rootPackageJson.dependencies?.[packageName]
-        ) {
-          packageJson.peerDependencies ??= {};
-          packageJson.peerDependencies[packageName] = version;
+          const isOptionalPeer =
+            npmDeps.peerDependenciesMeta[packageName]?.optional;
+          if (!isOptionalPeer) {
+            if (
+              !options.isProduction ||
+              rootPackageJson.dependencies?.[packageName]
+            ) {
+              packageJson.peerDependencies ??= {};
+              packageJson.peerDependencies[packageName] = getVersion(
+                packageName,
+                version,
+                'dependencies'
+              );
+            }
+          } else if (!options.isProduction) {
+            // add peer optional dependencies if not in production
+            packageJson.peerDependencies ??= {};
+            packageJson.peerDependencies[packageName] = version;
+            packageJson.peerDependenciesMeta ??= {};
+            packageJson.peerDependenciesMeta[packageName] = {
+              optional: true,
+            };
+          }
         }
-      } else if (!options.isProduction) {
-        // add peer optional dependencies if not in production
-        packageJson.peerDependencies ??= {};
-        packageJson.peerDependencies[packageName] = version;
-        packageJson.peerDependenciesMeta ??= {};
-        packageJson.peerDependenciesMeta[packageName] = {
-          optional: true,
-        };
       }
-    }
-  });
+    );
+  }
 
   packageJson.devDependencies &&= sortObjectByKeys(packageJson.devDependencies);
   packageJson.dependencies &&= sortObjectByKeys(packageJson.dependencies);