diff --git a/README.md b/README.md
index 6a59080..e4c2d90 100644
--- a/README.md
+++ b/README.md
@@ -21,7 +21,6 @@ being able to ship working JavaScript code.
 ```ts
 {
   "compilerOptions": {
-    "baseUrl": ".",
     "paths": {
       "~/*": ["./src/*"]
     }
diff --git a/src/steps/resolvePaths.ts b/src/steps/resolvePaths.ts
index 69ecab0..d19f88e 100644
--- a/src/steps/resolvePaths.ts
+++ b/src/steps/resolvePaths.ts
@@ -11,7 +11,7 @@ export function resolvePaths(
   options: Pick<ProgramOptions, "out" | "project" | "src">,
   tsConfig: TSConfig
 ): ProgramPaths {
-  const { baseUrl, outDir, paths } = tsConfig.options ?? {};
+  const { baseUrl = "", outDir, paths } = tsConfig.options ?? {};
 
   const out = options.out ?? outDir;
   if (!out) {
@@ -21,12 +21,6 @@ export function resolvePaths(
     );
   }
 
-  if (!baseUrl)
-    throw new TSConfigPropertyError(
-      resolvePaths.name,
-      "compilerOptions.baseUrl"
-    );
-
   if (!paths)
     throw new TSConfigPropertyError(resolvePaths.name, "compilerOptions.paths");
 
diff --git a/test/fixtures/tsconfig/nested/tsconfig.parent.no-base-url.jsonc b/test/fixtures/tsconfig/nested/tsconfig.parent.no-base-url.jsonc
new file mode 100644
index 0000000..c73c4b2
--- /dev/null
+++ b/test/fixtures/tsconfig/nested/tsconfig.parent.no-base-url.jsonc
@@ -0,0 +1,18 @@
+// This is a comment
+{
+  "compilerOptions": {
+    "lib": ["ES6"],
+    "module": "CommonJS",
+    "moduleResolution": "Node",
+    "target": "ES6",
+    "resolveJsonModule": true,
+    "skipLibCheck": true,
+    "strict": true,
+    "outDir": "build",
+    // This is a comment
+    "paths": {
+      "~/*": ["./src/*"]
+    }
+  },
+  "include": ["src/**/*", "test/**/*"]
+}
diff --git a/test/fixtures/tsconfig/tsconfig.extends.no-base-url.jsonc b/test/fixtures/tsconfig/tsconfig.extends.no-base-url.jsonc
new file mode 100644
index 0000000..e2ee421
--- /dev/null
+++ b/test/fixtures/tsconfig/tsconfig.extends.no-base-url.jsonc
@@ -0,0 +1,10 @@
+{
+  "extends": "./test/fixtures/tsconfig/nested/tsconfig.parent.no-base-url.jsonc",
+  /**
+   * This is a multiline comment
+   */
+  "compilerOptions": {
+    // This is a single line comment
+    "outDir": "dist"
+  }
+}
diff --git a/test/steps/loadTSConfig.test.ts b/test/steps/loadTSConfig.test.ts
index 964ffba..da51955 100644
--- a/test/steps/loadTSConfig.test.ts
+++ b/test/steps/loadTSConfig.test.ts
@@ -55,6 +55,33 @@ describe("steps/loadTSConfig", () => {
     `);
   });
 
+  it("loads tsconfig (jsonc) with extends correctly (no baseUrl)", () => {
+    const config = loadTSConfig(
+      "test/fixtures/tsconfig/tsconfig.extends.no-base-url.jsonc"
+    );
+    expect(config.options).toMatchInlineSnapshot(`
+      {
+        "configFilePath": undefined,
+        "lib": [
+          "lib.es2015.d.ts",
+        ],
+        "module": 1,
+        "moduleResolution": 2,
+        "outDir": "dist",
+        "paths": {
+          "~/*": [
+            "./src/*",
+          ],
+        },
+        "pathsBasePath": "test/fixtures/tsconfig/nested",
+        "resolveJsonModule": true,
+        "skipLibCheck": true,
+        "strict": true,
+        "target": 2,
+      }
+    `);
+  });
+
   // Was going to use this test to make sure that syntax errors were reported sensibly.
   // Turns out the Typescript config loader does some crazy stuff to recover from syntax errors!
   it("loads tsconfig with syntax errors (crazy stuff!)", () => {
diff --git a/tsconfig.json b/tsconfig.json
index 67e15f7..4498758 100644
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -15,7 +15,6 @@
     "noUnusedLocals": true,
     "noUnusedParameters": true,
     "forceConsistentCasingInFileNames": true,
-    "baseUrl": ".",
     "paths": {
       "~/*": ["./src/*"]
     }