diff --git a/src/services/codefixes/importFixes.ts b/src/services/codefixes/importFixes.ts
index 6034c9dfc3de1..4404665c94d6e 100644
--- a/src/services/codefixes/importFixes.ts
+++ b/src/services/codefixes/importFixes.ts
@@ -1414,6 +1414,18 @@ function getBestFix(fixes: readonly ImportFixWithModuleSpecifier[], sourceFile:
 }
 
 /** @returns `Comparison.LessThan` if `a` is better than `b`. */
+/** Heuristic approach: Prioritize local/relative imports over node_modules imports. */
+function compareLocalVsExternal(
+    a: ImportFixWithModuleSpecifier,
+    b: ImportFixWithModuleSpecifier
+): Comparison {
+    const aIsExternal = a.moduleSpecifierKind === "node_modules";
+    const bIsExternal = b.moduleSpecifierKind === "node_modules";
+    if (!aIsExternal && bIsExternal) return Comparison.LessThan;
+    if (aIsExternal && !bIsExternal) return Comparison.GreaterThan;
+    return Comparison.EqualTo;
+}
+
 function compareModuleSpecifiers(
     a: ImportFixWithModuleSpecifier,
     b: ImportFixWithModuleSpecifier,
@@ -1424,6 +1436,11 @@ function compareModuleSpecifiers(
     toPath: (fileName: string) => Path,
 ): Comparison {
     if (a.kind !== ImportFixKind.UseNamespace && b.kind !== ImportFixKind.UseNamespace) {
+        
+        const localVsExternalComparison = compareLocalVsExternal(a, b);
+        if (localVsExternalComparison !== Comparison.EqualTo) {
+            return localVsExternalComparison;
+        }
         return compareBooleans(
             b.moduleSpecifierKind !== "node_modules" || allowsImportingSpecifier(b.moduleSpecifier),
             a.moduleSpecifierKind !== "node_modules" || allowsImportingSpecifier(a.moduleSpecifier),
diff --git a/tests/cases/fourslash/importFixesPrioritizeLocal.ts b/tests/cases/fourslash/importFixesPrioritizeLocal.ts
new file mode 100644
index 0000000000000..9f88eb53c99e6
--- /dev/null
+++ b/tests/cases/fourslash/importFixesPrioritizeLocal.ts
@@ -0,0 +1,54 @@
+/// <reference path="fourslash.ts" />
+
+// Test that local imports are prioritized over external node_modules imports
+// when the same symbol is exported from both
+
+// @Filename: /node_modules/@mui/material/index.d.ts
+//// export function useTheme(): { palette: string };
+
+// @Filename: /node_modules/@mui/material/package.json
+//// { "name": "@mui/material", "version": "5.0.0", "types": "index.d.ts" }
+
+// @Filename: /node_modules/zustand/index.d.ts
+//// export function useStore(): any;
+
+// @Filename: /node_modules/zustand/package.json
+//// { "name": "zustand", "version": "4.0.0", "types": "index.d.ts" }
+
+// @Filename: /utils/store.ts
+//// export function useTheme() {
+////   return { palette: 'light' };
+//// }
+//// export function useStore() {
+////   return {};
+//// }
+
+// @Filename: /components/Button.tsx
+//// // Local useTheme should be suggested first
+//// const theme = useTheme/*1*/();
+
+// @Filename: /components/Header.tsx
+//// // Local useStore should be suggested first
+//// const store = useStore/*2*/();
+
+// Test 1: useTheme - should prioritize local import over @mui/material
+goTo.marker("1");
+verify.importFixAtPosition([
+`import { useTheme } from "../utils/store";
+// Local useTheme should be suggested first
+const theme = useTheme();`,
+`import { useTheme } from "@mui/material";
+// Local useTheme should be suggested first
+const theme = useTheme();`
+]);
+
+// Test 2: useStore - should prioritize local import over zustand
+goTo.marker("2");
+verify.importFixAtPosition([
+`import { useStore } from "../utils/store";
+// Local useStore should be suggested first
+const store = useStore();`,
+`import { useStore } from "zustand";
+// Local useStore should be suggested first
+const store = useStore();`
+]);
\ No newline at end of file