diff --git a/.changeset/eight-wasps-juggle.md b/.changeset/eight-wasps-juggle.md
new file mode 100644
index 0000000000..304841ff84
--- /dev/null
+++ b/.changeset/eight-wasps-juggle.md
@@ -0,0 +1,5 @@
+---
+"medusa-dev-cli": patch
+---
+
+fix(medusa-dev): include packages/ subdirectories in discovery
diff --git a/packages/medusa-dev-cli/package.json b/packages/medusa-dev-cli/package.json
index 8866a1fec7..6b243ec7bf 100644
--- a/packages/medusa-dev-cli/package.json
+++ b/packages/medusa-dev-cli/package.json
@@ -17,6 +17,7 @@
     "execa": "^4.1.0",
     "find-yarn-workspace-root": "^2.0.0",
     "fs-extra": "^9.0.1",
+    "glob": "^8.1.0",
     "got": "^11.8.6",
     "is-absolute": "^1.0.0",
     "jest": "^25.5.4",
diff --git a/packages/medusa-dev-cli/src/index.js b/packages/medusa-dev-cli/src/index.js
index df092bb6e6..acc33f0aa7 100644
--- a/packages/medusa-dev-cli/src/index.js
+++ b/packages/medusa-dev-cli/src/index.js
@@ -7,6 +7,7 @@ const yargs = require(`yargs/yargs`)
 const path = require(`path`)
 const os = require(`os`)
 const fs = require(`fs-extra`)
+const glob = require("glob")
 const watch = require(`./watch`)
 const { getVersionInfo } = require(`./utils/version`)
 const { buildFFCli } = require("./feature-flags")
@@ -94,35 +95,50 @@ medusa-dev --set-path-to-repo /path/to/my/cloned/version/medusa
       process.exit()
     }
 
+    // get list of directories to crawl for package declarations
+    const monoRepoPackagesDirs = []
+    try {
+      const monoRepoPkg = JSON.parse(
+        fs.readFileSync(path.join(medusaLocation, "package.json"))
+      )
+      for (const workspace of monoRepoPkg.workspaces.packages) {
+        if (!workspace.startsWith("packages")) {
+          continue
+        }
+        const workspacePackageDirs = glob.sync(workspace, {
+          cwd: medusaLocation.toString(),
+        })
+        monoRepoPackagesDirs.push(...workspacePackageDirs)
+      }
+    } catch (err) {
+      console.error(
+        `Unable to read and parse the workspace definition from medusa package.json`
+      )
+      process.exit(1)
+    }
+
     // get list of packages from monorepo
     const packageNameToPath = new Map()
-    const monoRepoPackages = fs
-      .readdirSync(path.join(medusaLocation, `packages`))
-      .map((dirName) => {
-        try {
-          const localPkg = JSON.parse(
-            fs.readFileSync(
-              path.join(medusaLocation, `packages`, dirName, `package.json`)
-            )
-          )
-
-          if (localPkg?.name) {
-            packageNameToPath.set(
-              localPkg.name,
-              path.join(medusaLocation, `packages`, dirName)
-            )
-            return localPkg.name
-          }
-        } catch (error) {
-          // fallback to generic one
-        }
-
-        packageNameToPath.set(
-          dirName,
-          path.join(medusaLocation, `packages`, dirName)
+    const monoRepoPackages = monoRepoPackagesDirs.map((dirName) => {
+      try {
+        const localPkg = JSON.parse(
+          fs.readFileSync(path.join(medusaLocation, dirName, `package.json`))
         )
-        return dirName
-      })
+
+        if (localPkg?.name) {
+          packageNameToPath.set(
+            localPkg.name,
+            path.join(medusaLocation, dirName)
+          )
+          return localPkg.name
+        }
+      } catch (error) {
+        // fallback to generic one
+      }
+
+      packageNameToPath.set(dirName, path.join(medusaLocation, dirName))
+      return dirName
+    })
 
     const localPkg = JSON.parse(fs.readFileSync(`package.json`))
     // intersect dependencies with monoRepoPackages to get list of packages that are used
diff --git a/packages/medusa-dev-cli/src/local-npm-registry/install-packages.js b/packages/medusa-dev-cli/src/local-npm-registry/install-packages.js
index ba98996b29..e9356e2ddf 100644
--- a/packages/medusa-dev-cli/src/local-npm-registry/install-packages.js
+++ b/packages/medusa-dev-cli/src/local-npm-registry/install-packages.js
@@ -24,9 +24,16 @@ const installPackages = async ({
     // in workspaces which should preserve node_modules structure
     // (packages being mostly hoisted to top-level node_modules)
 
+    const { stdout: yarnVersion } = await promisifiedSpawn([
+      `yarn`,
+      [`--version`],
+      { stdio: `pipe` },
+    ])
+    const workspaceCommand = !yarnVersion.startsWith("1") ? "list" : "info"
+
     const { stdout } = await promisifiedSpawn([
       `yarn`,
-      [`workspaces`, `info`, `--json`],
+      [`workspaces`, workspaceCommand, `--json`],
       { stdio: `pipe` },
     ])
 
diff --git a/yarn.lock b/yarn.lock
index 89011e611e..251b81d552 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -19150,7 +19150,7 @@ __metadata:
   languageName: node
   linkType: hard
 
-"glob@npm:^8.0.3":
+"glob@npm:^8.0.3, glob@npm:^8.1.0":
   version: 8.1.0
   resolution: "glob@npm:8.1.0"
   dependencies:
@@ -25415,6 +25415,7 @@ __metadata:
     execa: ^4.1.0
     find-yarn-workspace-root: ^2.0.0
     fs-extra: ^9.0.1
+    glob: ^8.1.0
     got: ^11.8.6
     is-absolute: ^1.0.0
     jest: ^25.5.4