diff --git a/src/parse/session.rs b/src/parse/session.rs
index 624fed0d2de..fb9182152d1 100644
--- a/src/parse/session.rs
+++ b/src/parse/session.rs
@@ -12,6 +12,7 @@
 
 use crate::config::file_lines::LineRange;
 use crate::ignore_path::IgnorePathSet;
+use crate::parse::parser::{ModError, ModulePathSuccess};
 use crate::source_map::LineRangeUtils;
 use crate::utils::starts_with_newline;
 use crate::visitor::SnippetProvider;
@@ -145,13 +146,30 @@ pub(crate) fn new(config: &Config) -> Result<ParseSess, ErrorKind> {
         })
     }
 
+    /// Determine the submodule path for the given module identifier.
+    ///
+    /// * `id` - The name of the module
+    /// * `relative` - If Some(symbol), the symbol name is a directory relative to the dir_path.
+    ///   If relative is Some, resolve the submodle at {dir_path}/{symbol}/{id}.rs
+    ///   or {dir_path}/{symbol}/{id}/mod.rs. if None, resolve the module at {dir_path}/{id}.rs.
+    /// *  `dir_path` - Module resolution will occur relative to this direcotry.
     pub(crate) fn default_submod_path(
         &self,
         id: symbol::Ident,
         relative: Option<symbol::Ident>,
         dir_path: &Path,
-    ) -> Result<rustc_expand::module::ModulePathSuccess, rustc_expand::module::ModError<'_>> {
-        rustc_expand::module::default_submod_path(&self.parse_sess, id, relative, dir_path)
+    ) -> Result<ModulePathSuccess, ModError<'_>> {
+        rustc_expand::module::default_submod_path(&self.parse_sess, id, relative, dir_path).or_else(
+            |e| {
+                // If resloving a module relative to {dir_path}/{symbol} fails because a file
+                // could not be found, then try to resolve the module relative to {dir_path}.
+                if matches!(e, ModError::FileNotFound(..)) && relative.is_some() {
+                    rustc_expand::module::default_submod_path(&self.parse_sess, id, None, dir_path)
+                } else {
+                    Err(e)
+                }
+            },
+        )
     }
 
     pub(crate) fn is_file_parsed(&self, path: &Path) -> bool {
diff --git a/src/test/mod_resolver.rs b/src/test/mod_resolver.rs
index fcff6d14e6f..aacb2acc684 100644
--- a/src/test/mod_resolver.rs
+++ b/src/test/mod_resolver.rs
@@ -64,3 +64,19 @@ fn fmt_out_of_line_test_modules() {
         ],
     )
 }
+
+#[test]
+fn fallback_and_try_to_resolve_external_submod_relative_to_current_dir_path() {
+    // See also https://github.com/rust-lang/rustfmt/issues/5198
+    verify_mod_resolution(
+        "tests/mod-resolver/issue-5198/lib.rs",
+        &[
+            "tests/mod-resolver/issue-5198/a.rs",
+            "tests/mod-resolver/issue-5198/lib/b.rs",
+            "tests/mod-resolver/issue-5198/lib/c/mod.rs",
+            "tests/mod-resolver/issue-5198/lib/c/e.rs",
+            "tests/mod-resolver/issue-5198/lib/c/d/f.rs",
+            "tests/mod-resolver/issue-5198/lib/c/d/g/mod.rs",
+        ],
+    )
+}
diff --git a/tests/mod-resolver/issue-5198/a.rs b/tests/mod-resolver/issue-5198/a.rs
new file mode 100644
index 00000000000..cd686f56116
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/a.rs
@@ -0,0 +1 @@
+fn main(        ) {   println!("Hello World!")                         }
diff --git a/tests/mod-resolver/issue-5198/lib.rs b/tests/mod-resolver/issue-5198/lib.rs
new file mode 100644
index 00000000000..696832913c8
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib.rs
@@ -0,0 +1,3 @@
+mod a;
+mod b;
+mod c;
diff --git a/tests/mod-resolver/issue-5198/lib/b.rs b/tests/mod-resolver/issue-5198/lib/b.rs
new file mode 100644
index 00000000000..cd686f56116
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/b.rs
@@ -0,0 +1 @@
+fn main(        ) {   println!("Hello World!")                         }
diff --git a/tests/mod-resolver/issue-5198/lib/c/d.rs b/tests/mod-resolver/issue-5198/lib/c/d.rs
new file mode 100644
index 00000000000..d1604aa23a3
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/c/d.rs
@@ -0,0 +1,3 @@
+mod e;
+mod f;
+mod g;
diff --git a/tests/mod-resolver/issue-5198/lib/c/d/explanation.txt b/tests/mod-resolver/issue-5198/lib/c/d/explanation.txt
new file mode 100644
index 00000000000..92c9e302143
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/c/d/explanation.txt
@@ -0,0 +1,16 @@
+This file is contained in the './lib/c/d/' directory.
+
+The directory name './lib/c/d/' conflicts with the './lib/c/d.rs' file name.
+
+'./lib/c/d.rs' defines 3 external modules:
+
+    * mod e;
+    * mod f;
+    * mod g;
+
+Module resolution will fail if we look for './lib/c/d/e.rs' or './lib/c/d/e/mod.rs',
+so we should fall back to looking for './lib/c/e.rs', which correctly finds the modlue, that
+rustfmt should format.
+
+'./lib/c/d/f.rs' and './lib/c/d/g/mod.rs' exist at the default submodule paths so we should be able
+to resolve these modules with no problems.
\ No newline at end of file
diff --git a/tests/mod-resolver/issue-5198/lib/c/d/f.rs b/tests/mod-resolver/issue-5198/lib/c/d/f.rs
new file mode 100644
index 00000000000..cd686f56116
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/c/d/f.rs
@@ -0,0 +1 @@
+fn main(        ) {   println!("Hello World!")                         }
diff --git a/tests/mod-resolver/issue-5198/lib/c/d/g/mod.rs b/tests/mod-resolver/issue-5198/lib/c/d/g/mod.rs
new file mode 100644
index 00000000000..cd686f56116
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/c/d/g/mod.rs
@@ -0,0 +1 @@
+fn main(        ) {   println!("Hello World!")                         }
diff --git a/tests/mod-resolver/issue-5198/lib/c/e.rs b/tests/mod-resolver/issue-5198/lib/c/e.rs
new file mode 100644
index 00000000000..cd686f56116
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/c/e.rs
@@ -0,0 +1 @@
+fn main(        ) {   println!("Hello World!")                         }
diff --git a/tests/mod-resolver/issue-5198/lib/c/mod.rs b/tests/mod-resolver/issue-5198/lib/c/mod.rs
new file mode 100644
index 00000000000..81904619650
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/c/mod.rs
@@ -0,0 +1,3 @@
+mod d;
+
+fn main(        ) {   println!("Hello World!")                         }
diff --git a/tests/mod-resolver/issue-5198/lib/explanation.txt b/tests/mod-resolver/issue-5198/lib/explanation.txt
new file mode 100644
index 00000000000..d436a8076cd
--- /dev/null
+++ b/tests/mod-resolver/issue-5198/lib/explanation.txt
@@ -0,0 +1,16 @@
+This file is contained in the './lib' directory.
+
+The directory name './lib' conflicts with the './lib.rs' file name.
+
+'lib.rs' defines 3 external modules:
+
+    * mod a;
+    * mod b;
+    * mod c;
+
+Module resolution will fail if we look for './lib/a.rs' or './lib/a/mod.rs',
+so we should fall back to looking for './a.rs', which correctly finds the modlue that
+rustfmt should format.
+
+'./lib/b.rs' and './lib/c/mod.rs' exist at the default submodule paths so we should be able
+to resolve these modules with no problems.