diff --git a/src/Microsoft.OpenApi/Reader/V3/OpenApiV3Deserializer.cs b/src/Microsoft.OpenApi/Reader/V3/OpenApiV3Deserializer.cs
index 67a9b0495..157992b4a 100644
--- a/src/Microsoft.OpenApi/Reader/V3/OpenApiV3Deserializer.cs
+++ b/src/Microsoft.OpenApi/Reader/V3/OpenApiV3Deserializer.cs
@@ -193,7 +193,11 @@ private static (string, string) GetReferenceIdAndExternalResource(string pointer
             var refId = refSegments.Last();
             var isExternalResource = !refSegments.First().StartsWith("#", StringComparison.OrdinalIgnoreCase);
 
-            string externalResource = isExternalResource ? $"{refSegments.First()}/{refSegments[1].TrimEnd('#')}" : null;
+            string externalResource = null;
+            if (isExternalResource)
+            {
+                externalResource = pointer.Split('#').FirstOrDefault()?.TrimEnd('#');
+            }
 
             return (refId, externalResource);
         }
diff --git a/src/Microsoft.OpenApi/Reader/V31/OpenApiV31Deserializer.cs b/src/Microsoft.OpenApi/Reader/V31/OpenApiV31Deserializer.cs
index 92e7770df..05856028e 100644
--- a/src/Microsoft.OpenApi/Reader/V31/OpenApiV31Deserializer.cs
+++ b/src/Microsoft.OpenApi/Reader/V31/OpenApiV31Deserializer.cs
@@ -165,7 +165,7 @@ private static (string, string) GetReferenceIdAndExternalResource(string pointer
             string externalResource = null;
             if (isExternalResource && pointer.Contains('#'))
             {
-                externalResource = $"{refSegments.First()}/{refSegments[1].TrimEnd('#')}";
+                externalResource = pointer.Split('#').FirstOrDefault()?.TrimEnd('#');
             }
 
             return (refId, externalResource);
diff --git a/test/Microsoft.OpenApi.Readers.Tests/V31Tests/OpenApiCompoentsTests.cs b/test/Microsoft.OpenApi.Readers.Tests/V31Tests/OpenApiCompoentsTests.cs
new file mode 100644
index 000000000..902d7a910
--- /dev/null
+++ b/test/Microsoft.OpenApi.Readers.Tests/V31Tests/OpenApiCompoentsTests.cs
@@ -0,0 +1,41 @@
+// Copyright (c) Microsoft Corporation. All rights reserved.
+// Licensed under the MIT license. 
+
+using Microsoft.OpenApi.Models;
+using Microsoft.OpenApi.Models.References;
+using Microsoft.OpenApi.Reader;
+using Xunit;
+
+namespace Microsoft.OpenApi.Readers.Tests.V31Tests
+{
+    public class OpenApiCompoentsTests
+    {
+        [Theory]
+        [InlineData("./FirstLevel/SecondLevel/ThridLevel/File.json#/components/schemas/ExternalRelativePathModel", "ExternalRelativePathModel", "./FirstLevel/SecondLevel/ThridLevel/File.json")]
+        [InlineData("File.json#/components/schemas/ExternalSimpleRelativePathModel", "ExternalSimpleRelativePathModel", "File.json")]
+        [InlineData("A:\\Dir\\File.json#/components/schemas/ExternalAbsWindowsPathModel", "ExternalAbsWindowsPathModel", "A:\\Dir\\File.json")]
+        [InlineData("/Dir/File.json#/components/schemas/ExternalAbsUnixPathModel", "ExternalAbsUnixPathModel", "/Dir/File.json")]
+        [InlineData("https://host.lan:1234/path/to/file/resource.json#/components/schemas/ExternalHttpsModel", "ExternalHttpsModel", "https://host.lan:1234/path/to/file/resource.json")]
+        [InlineData("File.json", "File.json", null)]
+        public void ParseExternalSchemaReferenceShouldSucceed(string reference, string referenceId, string externalResource)
+        {
+            var input = $@"{{
+    ""schemas"": {{
+        ""Model"": {{
+            ""$ref"": ""{reference.Replace("\\", "\\\\")}""
+        }}
+    }}
+}}
+";
+            var openApiDocument = new OpenApiDocument();
+
+            // Act
+            var components = OpenApiModelFactory.Parse<OpenApiComponents>(input, OpenApiSpecVersion.OpenApi3_1, openApiDocument, out _, "json");
+
+            // Assert
+            var schema = components.Schemas["Model"] as OpenApiSchemaReference;
+            var expected = new OpenApiSchemaReference(referenceId, openApiDocument, externalResource);
+            Assert.Equivalent(expected, schema);
+        }
+    }
+}
diff --git a/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiSchemaTests.cs b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiSchemaTests.cs
index 2fd230a19..04d6de97d 100644
--- a/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiSchemaTests.cs
+++ b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/OpenApiSchemaTests.cs
@@ -388,5 +388,65 @@ public async Task ParseAdvancedSchemaWithReferenceShouldSucceed()
             // Assert
             Assert.Equal(expected, actual);
         }
+
+        [Fact]
+        public async Task ParseExternalReferenceSchemaShouldSucceed()
+        {
+            // Act
+            var result = await OpenApiDocument.LoadAsync(Path.Combine(SampleFolderPath, "externalReferencesSchema.yaml"));
+
+            // Assert
+            var components = result.Document.Components;
+
+            Assert.Equivalent(
+                new OpenApiDiagnostic()
+                {
+                    SpecificationVersion = OpenApiSpecVersion.OpenApi3_0
+                }, result.Diagnostic);
+
+            var expectedComponents = new OpenApiComponents
+            {
+                Schemas =
+                {
+                    ["RelativePathModel"] = new OpenApiSchema()
+                    {
+                        AllOf =
+                        {
+                            new OpenApiSchemaReference("ExternalRelativePathModel", result.Document, "./FirstLevel/SecondLevel/ThridLevel/File.json")
+                        }
+                    },
+                    ["SimpleRelativePathModel"] = new OpenApiSchema()
+                    {
+                        AllOf =
+                        {
+                            new OpenApiSchemaReference("ExternalSimpleRelativePathModel", result.Document, "File.json")
+                        }
+                    },
+                    ["AbsoluteWindowsPathModel"] = new OpenApiSchema()
+                    {
+                        AllOf =
+                        {
+                            new OpenApiSchemaReference("ExternalAbsWindowsPathModel", result.Document, @"A:\Dir\File.json")
+                        }
+                    },
+                    ["AbsoluteUnixPathModel"] = new OpenApiSchema()
+                    {
+                        AllOf =
+                        {
+                            new OpenApiSchemaReference("ExternalAbsUnixPathModel", result.Document, "/Dir/File.json")
+                        }
+                    },
+                    ["HttpsUrlModel"] = new OpenApiSchema()
+                    {
+                        AllOf =
+                        {
+                            new OpenApiSchemaReference("ExternalHttpsModel", result.Document, "https://host.lan:1234/path/to/file/resource.json")
+                        }
+                    }
+                }
+            };
+
+            Assert.Equivalent(expectedComponents, components);
+        }
     }
 }
diff --git a/test/Microsoft.OpenApi.Readers.Tests/V3Tests/Samples/OpenApiSchema/externalReferencesSchema.yaml b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/Samples/OpenApiSchema/externalReferencesSchema.yaml
new file mode 100644
index 000000000..dd276e667
--- /dev/null
+++ b/test/Microsoft.OpenApi.Readers.Tests/V3Tests/Samples/OpenApiSchema/externalReferencesSchema.yaml
@@ -0,0 +1,23 @@
+# https://github.com/OAI/OpenAPI-Specification/blob/master/versions/3.0.0.md#schemaObject
+openapi: 3.0.0
+info:
+  title: Simple Document
+  version: 0.9.1
+paths: { }
+components:
+  schemas:
+    RelativePathModel:
+      allOf:
+      - $ref: './FirstLevel/SecondLevel/ThridLevel/File.json#/components/schemas/ExternalRelativePathModel'
+    SimpleRelativePathModel:
+      allOf:
+      - $ref: 'File.json#/components/schemas/ExternalSimpleRelativePathModel'
+    AbsoluteWindowsPathModel:
+      allOf:
+      - $ref: 'A:\Dir\File.json#/components/schemas/ExternalAbsWindowsPathModel'
+    AbsoluteUnixPathModel:
+      allOf:
+      - $ref: '/Dir/File.json#/components/schemas/ExternalAbsUnixPathModel'
+    HttpsUrlModel:
+      allOf:
+      - $ref: 'https://host.lan:1234/path/to/file/resource.json#/components/schemas/ExternalHttpsModel'
\ No newline at end of file