diff --git a/gopls/internal/cache/session_test.go b/gopls/internal/cache/session_test.go
index cc6f664060a..a3bd8ce5800 100644
--- a/gopls/internal/cache/session_test.go
+++ b/gopls/internal/cache/session_test.go
@@ -227,6 +227,91 @@ func TestZeroConfigAlgorithm(t *testing.T) {
 			[]string{"a/a.go", "b/b.go", "b/c/c.go"},
 			[]viewSummary{{GoWorkView, ".", nil}, {GoModView, "b/c", []string{"GOWORK=off"}}},
 		},
+		{
+			"go.mod with nested replace",
+			map[string]string{
+				"go.mod":   "module golang.org/a\n require golang.org/b v1.2.3\nreplace example.com/b => ./b",
+				"a.go":     "package a",
+				"b/go.mod": "module golang.org/b\ngo 1.18\n",
+				"b/b.go":   "package b",
+			},
+			[]folderSummary{{dir: "."}},
+			[]string{"a/a.go", "b/b.go"},
+			[]viewSummary{{GoModView, ".", nil}},
+		},
+		{
+			"go.mod with parent replace, parent folder",
+			map[string]string{
+				"go.mod":   "module golang.org/a",
+				"a.go":     "package a",
+				"b/go.mod": "module golang.org/b\ngo 1.18\nrequire golang.org/a v1.2.3\nreplace golang.org/a => ../",
+				"b/b.go":   "package b",
+			},
+			[]folderSummary{{dir: "."}},
+			[]string{"a/a.go", "b/b.go"},
+			[]viewSummary{{GoModView, ".", nil}, {GoModView, "b", nil}},
+		},
+		{
+			"go.mod with multiple replace",
+			map[string]string{
+				"go.mod": `
+module golang.org/root
+
+require (
+	golang.org/a v1.2.3
+	golang.org/b v1.2.3
+	golang.org/c v1.2.3
+)
+
+replace (
+	golang.org/b => ./b
+	golang.org/c => ./c
+	// Note: d is not replaced
+)
+`,
+				"a.go":     "package a",
+				"b/go.mod": "module golang.org/b\ngo 1.18",
+				"b/b.go":   "package b",
+				"c/go.mod": "module golang.org/c\ngo 1.18",
+				"c/c.go":   "package c",
+				"d/go.mod": "module golang.org/d\ngo 1.18",
+				"d/d.go":   "package d",
+			},
+			[]folderSummary{{dir: "."}},
+			[]string{"b/b.go", "c/c.go", "d/d.go"},
+			[]viewSummary{{GoModView, ".", nil}, {GoModView, "d", nil}},
+		},
+		{
+			"go.mod with many replace",
+			map[string]string{
+				"go.mod":   "module golang.org/a\ngo 1.18",
+				"a.go":     "package a",
+				"b/go.mod": "module golang.org/b\ngo 1.18\nrequire golang.org/a v1.2.3\nreplace golang.org/a => ../",
+				"b/b.go":   "package b",
+			},
+			[]folderSummary{{dir: "b"}},
+			[]string{"a/a.go", "b/b.go"},
+			[]viewSummary{{GoModView, "b", nil}},
+		},
+		{
+			"go.mod with replace directive; workspace replace off",
+			map[string]string{
+				"go.mod":   "module golang.org/a\n require golang.org/b v1.2.3\nreplace example.com/b => ./b",
+				"a.go":     "package a",
+				"b/go.mod": "module golang.org/b\ngo 1.18\n",
+				"b/b.go":   "package b",
+			},
+			[]folderSummary{{
+				dir: ".",
+				options: func(string) map[string]any {
+					return map[string]any{
+						"includeReplaceInWorkspace": false,
+					}
+				},
+			}},
+			[]string{"a/a.go", "b/b.go"},
+			[]viewSummary{{GoModView, ".", nil}, {GoModView, "b", nil}},
+		},
 	}
 
 	for _, test := range tests {
diff --git a/gopls/internal/cache/view.go b/gopls/internal/cache/view.go
index 78e85a18b0c..ed52646f31d 100644
--- a/gopls/internal/cache/view.go
+++ b/gopls/internal/cache/view.go
@@ -154,8 +154,10 @@ type viewDefinition struct {
 
 	// workspaceModFiles holds the set of mod files active in this snapshot.
 	//
-	// This is either empty, a single entry for the workspace go.mod file, or the
-	// set of mod files used by the workspace go.work file.
+	// For a go.work workspace, this is the set of workspace modfiles. For a
+	// go.mod workspace, this contains the go.mod file defining the workspace
+	// root, as well as any locally replaced modules (if
+	// "includeReplaceInWorkspace" is set).
 	//
 	// TODO(rfindley): should we just run `go list -m` to compute this set?
 	workspaceModFiles    map[protocol.DocumentURI]struct{}
@@ -939,6 +941,22 @@ func defineView(ctx context.Context, fs file.Source, folder *Folder, forFile fil
 	// But gopls is less strict, allowing GOPATH mode if GO111MODULE="", and
 	// AdHoc views if no module is found.
 
+	// gomodWorkspace is a helper to compute the correct set of workspace
+	// modfiles for a go.mod file, based on folder options.
+	gomodWorkspace := func() map[protocol.DocumentURI]unit {
+		modFiles := map[protocol.DocumentURI]struct{}{def.gomod: {}}
+		if folder.Options.IncludeReplaceInWorkspace {
+			includingReplace, err := goModModules(ctx, def.gomod, fs)
+			if err == nil {
+				modFiles = includingReplace
+			} else {
+				// If the go.mod file fails to parse, we don't know anything about
+				// replace directives, so fall back to a view of just the root module.
+			}
+		}
+		return modFiles
+	}
+
 	// Prefer a go.work file if it is available and contains the module relevant
 	// to forURI.
 	if def.adjustedGO111MODULE() != "off" && folder.Env.GOWORK != "off" && def.gowork != "" {
@@ -959,7 +977,7 @@ func defineView(ctx context.Context, fs file.Source, folder *Folder, forFile fil
 			if _, ok := def.workspaceModFiles[def.gomod]; !ok {
 				def.typ = GoModView
 				def.root = def.gomod.Dir()
-				def.workspaceModFiles = map[protocol.DocumentURI]unit{def.gomod: {}}
+				def.workspaceModFiles = gomodWorkspace()
 				if def.envOverlay == nil {
 					def.envOverlay = make(map[string]string)
 				}
@@ -978,7 +996,7 @@ func defineView(ctx context.Context, fs file.Source, folder *Folder, forFile fil
 	if def.adjustedGO111MODULE() != "off" && def.gomod != "" {
 		def.typ = GoModView
 		def.root = def.gomod.Dir()
-		def.workspaceModFiles = map[protocol.DocumentURI]struct{}{def.gomod: {}}
+		def.workspaceModFiles = gomodWorkspace()
 		return def, nil
 	}
 
diff --git a/gopls/internal/cache/workspace.go b/gopls/internal/cache/workspace.go
index 4f01ebf0364..07134b3da00 100644
--- a/gopls/internal/cache/workspace.go
+++ b/gopls/internal/cache/workspace.go
@@ -15,8 +15,10 @@ import (
 	"golang.org/x/tools/gopls/internal/protocol"
 )
 
-// TODO(rfindley): now that experimentalWorkspaceModule is gone, this file can
-// be massively cleaned up and/or removed.
+// isGoWork reports if uri is a go.work file.
+func isGoWork(uri protocol.DocumentURI) bool {
+	return filepath.Base(uri.Path()) == "go.work"
+}
 
 // goWorkModules returns the URIs of go.mod files named by the go.work file.
 func goWorkModules(ctx context.Context, gowork protocol.DocumentURI, fs file.Source) (map[protocol.DocumentURI]unit, error) {
@@ -34,16 +36,28 @@ func goWorkModules(ctx context.Context, gowork protocol.DocumentURI, fs file.Sou
 	if err != nil {
 		return nil, fmt.Errorf("parsing go.work: %w", err)
 	}
-	modFiles := make(map[protocol.DocumentURI]unit)
+	var usedDirs []string
 	for _, use := range workFile.Use {
-		modDir := filepath.FromSlash(use.Path)
+		usedDirs = append(usedDirs, use.Path)
+	}
+	return localModFiles(dir, usedDirs), nil
+}
+
+// localModFiles builds a set of local go.mod files referenced by
+// goWorkOrModPaths, which is a slice of paths as contained in a go.work 'use'
+// directive or go.mod 'replace' directive (and which therefore may use either
+// '/' or '\' as a path separator).
+func localModFiles(relativeTo string, goWorkOrModPaths []string) map[protocol.DocumentURI]unit {
+	modFiles := make(map[protocol.DocumentURI]unit)
+	for _, path := range goWorkOrModPaths {
+		modDir := filepath.FromSlash(path)
 		if !filepath.IsAbs(modDir) {
-			modDir = filepath.Join(dir, modDir)
+			modDir = filepath.Join(relativeTo, modDir)
 		}
 		modURI := protocol.URIFromPath(filepath.Join(modDir, "go.mod"))
 		modFiles[modURI] = unit{}
 	}
-	return modFiles, nil
+	return modFiles
 }
 
 // isGoMod reports if uri is a go.mod file.
@@ -51,9 +65,33 @@ func isGoMod(uri protocol.DocumentURI) bool {
 	return filepath.Base(uri.Path()) == "go.mod"
 }
 
-// isGoWork reports if uri is a go.work file.
-func isGoWork(uri protocol.DocumentURI) bool {
-	return filepath.Base(uri.Path()) == "go.work"
+// goModModules returns the URIs of "workspace" go.mod files defined by a
+// go.mod file. This set is defined to be the given go.mod file itself, as well
+// as the modfiles of any locally replaced modules in the go.mod file.
+func goModModules(ctx context.Context, gomod protocol.DocumentURI, fs file.Source) (map[protocol.DocumentURI]unit, error) {
+	fh, err := fs.ReadFile(ctx, gomod)
+	if err != nil {
+		return nil, err // canceled
+	}
+	content, err := fh.Content()
+	if err != nil {
+		return nil, err
+	}
+	filename := gomod.Path()
+	dir := filepath.Dir(filename)
+	modFile, err := modfile.Parse(filename, content, nil)
+	if err != nil {
+		return nil, err
+	}
+	var localReplaces []string
+	for _, replace := range modFile.Replace {
+		if modfile.IsDirectoryPath(replace.New.Path) {
+			localReplaces = append(localReplaces, replace.New.Path)
+		}
+	}
+	modFiles := localModFiles(dir, localReplaces)
+	modFiles[gomod] = unit{}
+	return modFiles, nil
 }
 
 // fileExists reports whether the file has a Content (which may be empty).
diff --git a/gopls/internal/settings/default.go b/gopls/internal/settings/default.go
index 74b98c82555..bb248273d4d 100644
--- a/gopls/internal/settings/default.go
+++ b/gopls/internal/settings/default.go
@@ -115,6 +115,7 @@ func DefaultOptions(overrides ...func(*Options)) *Options {
 				ReportAnalysisProgressAfter: 5 * time.Second,
 				TelemetryPrompt:             false,
 				LinkifyShowMessage:          false,
+				IncludeReplaceInWorkspace:   true,
 			},
 			Hooks: Hooks{
 				URLRegexp:            urlRegexp(),
diff --git a/gopls/internal/settings/settings.go b/gopls/internal/settings/settings.go
index 0f1f1779982..8010dcd6e5a 100644
--- a/gopls/internal/settings/settings.go
+++ b/gopls/internal/settings/settings.go
@@ -553,6 +553,12 @@ type InternalOptions struct {
 	// LinkifyShowMessage controls whether the client wants gopls
 	// to linkify links in showMessage. e.g. [go.dev](https://go.dev).
 	LinkifyShowMessage bool
+
+	// IncludeReplaceInWorkspace controls whether locally replaced modules in a
+	// go.mod file are treated like workspace modules.
+	// Or in other words, if a go.mod file with local replaces behaves like a
+	// go.work file.
+	IncludeReplaceInWorkspace bool
 }
 
 type SubdirWatchPatterns string
@@ -1146,9 +1152,13 @@ func (o *Options) set(name string, value interface{}, seen map[string]struct{})
 
 	case "telemetryPrompt":
 		result.setBool(&o.TelemetryPrompt)
+
 	case "linkifyShowMessage":
 		result.setBool(&o.LinkifyShowMessage)
 
+	case "includeReplaceInWorkspace":
+		result.setBool(&o.IncludeReplaceInWorkspace)
+
 	// Replaced settings.
 	case "experimentalDisabledAnalyses":
 		result.deprecated("analyses")
diff --git a/gopls/internal/test/integration/workspace/zero_config_test.go b/gopls/internal/test/integration/workspace/zero_config_test.go
index 51fd9a7dbd2..87c7c087844 100644
--- a/gopls/internal/test/integration/workspace/zero_config_test.go
+++ b/gopls/internal/test/integration/workspace/zero_config_test.go
@@ -185,3 +185,52 @@ const C = 0
 		)
 	})
 }
+
+func TestGoModReplace(t *testing.T) {
+	// This test checks that we treat locally replaced modules as workspace
+	// modules, according to the "includeReplaceInWorkspace" setting.
+	const files = `
+-- moda/go.mod --
+module golang.org/a
+
+require golang.org/b v1.2.3
+
+replace golang.org/b => ../modb
+
+go 1.20
+
+-- moda/a.go --
+package a
+
+import "golang.org/b"
+
+const A = b.B
+
+-- modb/go.mod --
+module golang.org/b
+
+go 1.20
+
+-- modb/b.go --
+package b
+
+const B = 1
+`
+
+	for useReplace, expectation := range map[bool]Expectation{
+		true:  FileWatchMatching("modb"),
+		false: NoFileWatchMatching("modb"),
+	} {
+		WithOptions(
+			WorkspaceFolders("moda"),
+			Settings{
+				"includeReplaceInWorkspace": useReplace,
+			},
+		).Run(t, files, func(t *testing.T, env *Env) {
+			env.OnceMet(
+				InitialWorkspaceLoad,
+				expectation,
+			)
+		})
+	}
+}