diff --git a/BUILD.bazel b/BUILD.bazel
index 5467e221b..e281ea890 100644
--- a/BUILD.bazel
+++ b/BUILD.bazel
@@ -9,8 +9,10 @@ load("//:def.bzl", "gazelle", "gazelle_binary")
 # gazelle:exclude .bazelci
 # gazelle:exclude .bcr
 # gazelle:exclude .idea
+# gazelle:exclude .ijwb
 # gazelle:exclude .github
 # gazelle:exclude .vscode
+# gazelle:exclude internal/module/testdata
 # gazelle:go_naming_convention import_alias
 gazelle(
     name = "gazelle",
diff --git a/internal/module/BUILD.bazel b/internal/module/BUILD.bazel
index f5ae5e583..0adffa699 100644
--- a/internal/module/BUILD.bazel
+++ b/internal/module/BUILD.bazel
@@ -1,11 +1,14 @@
-load("@io_bazel_rules_go//go:def.bzl", "go_library")
+load("@io_bazel_rules_go//go:def.bzl", "go_library", "go_test")
 
 go_library(
     name = "module",
     srcs = ["module.go"],
     importpath = "github.com/bazelbuild/bazel-gazelle/internal/module",
     visibility = ["//:__subpackages__"],
-    deps = ["@com_github_bazelbuild_buildtools//build"],
+    deps = [
+        "//label",
+        "@com_github_bazelbuild_buildtools//build",
+    ],
 )
 
 filegroup(
@@ -14,6 +17,7 @@ filegroup(
     srcs = [
         "BUILD.bazel",
         "module.go",
+        "module_test.go",
     ],
     visibility = ["//visibility:public"],
 )
@@ -23,3 +27,17 @@ alias(
     actual = ":module",
     visibility = ["//:__subpackages__"],
 )
+
+go_test(
+    name = "module_test",
+    srcs = ["module_test.go"],
+    data = glob(
+        ["testdata/**"],
+        allow_empty = True,
+    ),
+    embed = [":module"],
+    deps = [
+        "@com_github_google_go_cmp//cmp",
+        "@io_bazel_rules_go//go/runfiles:go_default_library",
+    ],
+)
diff --git a/internal/module/module.go b/internal/module/module.go
index c4411e0cd..04e2e612a 100644
--- a/internal/module/module.go
+++ b/internal/module/module.go
@@ -18,9 +18,11 @@ limitations under the License.
 package module
 
 import (
+	"fmt"
 	"os"
 	"path/filepath"
 
+	"github.com/bazelbuild/bazel-gazelle/label"
 	"github.com/bazelbuild/buildtools/build"
 )
 
@@ -29,30 +31,20 @@ import (
 // See https://bazel.build/external/module#repository_names_and_strict_deps for more information on
 // apparent names.
 func ExtractModuleToApparentNameMapping(repoRoot string) (func(string) string, error) {
-	moduleFile, err := parseModuleFile(repoRoot)
+	moduleToApparentName, err := collectApparentNames(repoRoot, "MODULE.bazel")
 	if err != nil {
 		return nil, err
 	}
-	var moduleToApparentName map[string]string
-	if moduleFile != nil {
-		moduleToApparentName = collectApparentNames(moduleFile)
-	} else {
-		// If there is no MODULE.bazel file, return a function that always returns the empty string.
-		// Languages will know to fall back to the WORKSPACE names of repos.
-		moduleToApparentName = make(map[string]string)
-	}
 
 	return func(moduleName string) string {
 		return moduleToApparentName[moduleName]
 	}, nil
 }
 
-func parseModuleFile(repoRoot string) (*build.File, error) {
-	path := filepath.Join(repoRoot, "MODULE.bazel")
+func parseModuleSegment(repoRoot, relPath string) (*build.File, error) {
+	path := filepath.Join(repoRoot, relPath)
 	bytes, err := os.ReadFile(path)
-	if os.IsNotExist(err) {
-		return nil, nil
-	} else if err != nil {
+	if err != nil {
 		return nil, err
 	}
 	return build.ParseModule(path, bytes)
@@ -61,11 +53,59 @@ func parseModuleFile(repoRoot string) (*build.File, error) {
 // Collects the mapping of module names (e.g. "rules_go") to user-configured apparent names (e.g.
 // "my_rules_go"). See https://bazel.build/external/module#repository_names_and_strict_deps for more
 // information on apparent names.
-func collectApparentNames(m *build.File) map[string]string {
+func collectApparentNames(repoRoot, relPath string) (map[string]string, error) {
+	apparentNames := make(map[string]string)
+	seenFiles := make(map[string]struct{})
+	filesToProcess := []string{relPath}
+
+	for len(filesToProcess) > 0 {
+		f := filesToProcess[0]
+		filesToProcess = filesToProcess[1:]
+		if _, seen := seenFiles[f]; seen {
+			continue
+		}
+		seenFiles[f] = struct{}{}
+		bf, err := parseModuleSegment(repoRoot, f)
+		if err != nil {
+			if f == "MODULE.bazel" && os.IsNotExist(err) {
+				// If there is no MODULE.bazel file, return an empty map but no error.
+				// Languages will know to fall back to the WORKSPACE names of repos.
+				return nil, nil
+			}
+			return nil, err
+		}
+		names, includeLabels := collectApparentNamesAndIncludes(bf)
+		for name, apparentName := range names {
+			apparentNames[name] = apparentName
+		}
+		for _, includeLabel := range includeLabels {
+			l, err := label.Parse(includeLabel)
+			if err != nil {
+				return nil, fmt.Errorf("failed to parse include label %q: %v", includeLabel, err)
+			}
+			p := filepath.Join(filepath.FromSlash(l.Pkg), filepath.FromSlash(l.Name))
+			filesToProcess = append(filesToProcess, p)
+		}
+	}
+
+	return apparentNames, nil
+}
+
+func collectApparentNamesAndIncludes(f *build.File) (map[string]string, []string) {
 	apparentNames := make(map[string]string)
+	var includeLabels []string
 
-	for _, dep := range m.Rules("") {
-		if dep.Name() == "" {
+	for _, dep := range f.Rules("") {
+		if dep.ExplicitName() == "" {
+			if ident, ok := dep.Call.X.(*build.Ident); !ok || ident.Name != "include" {
+				continue
+			}
+			if len(dep.Call.List) != 1 {
+				continue
+			}
+			if str, ok := dep.Call.List[0].(*build.StringExpr); ok {
+				includeLabels = append(includeLabels, str.Value)
+			}
 			continue
 		}
 		if dep.Kind() != "module" && dep.Kind() != "bazel_dep" {
@@ -82,5 +122,5 @@ func collectApparentNames(m *build.File) map[string]string {
 		}
 	}
 
-	return apparentNames
+	return apparentNames, includeLabels
 }
diff --git a/internal/module/module_test.go b/internal/module/module_test.go
new file mode 100644
index 000000000..a9cee370b
--- /dev/null
+++ b/internal/module/module_test.go
@@ -0,0 +1,44 @@
+package module
+
+import (
+	"path/filepath"
+	"testing"
+
+	"github.com/bazelbuild/rules_go/go/runfiles"
+	"github.com/google/go-cmp/cmp"
+)
+
+func TestCollectApparent(t *testing.T) {
+	moduleFile, err := runfiles.Rlocation("bazel_gazelle/internal/module/testdata/MODULE.bazel")
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	apparentNames, err := collectApparentNames(filepath.Dir(moduleFile), "MODULE.bazel")
+	if err != nil {
+		t.Fatalf("unexpected error: %v", err)
+	}
+
+	expected := map[string]string{
+		"rules_bar":   "rules_bar",
+		"rules_baz":   "rules_baz",
+		"rules_foo":   "my_rules_foo",
+		"rules_lang":  "my_rules_lang",
+		"rules_quz":   "rules_quz",
+		"test_module": "my_test_module",
+	}
+	if diff := cmp.Diff(expected, apparentNames); diff != "" {
+		t.Errorf("unexpected apparent names (-want +got):\n%s", diff)
+	}
+}
+
+func TestCollectApparent_fileDoesNotExist(t *testing.T) {
+	_, err := collectApparentNames(t.TempDir(), "MODULE.bazel")
+	if err != nil {
+		t.Fatalf("unexpected error: %v", err)
+	}
+	_, err = collectApparentNames(t.TempDir(), "segment.MODULE.bazel")
+	if err == nil {
+		t.Fatalf("expected error, got nil")
+	}
+}
diff --git a/internal/module/testdata/MODULE.bazel b/internal/module/testdata/MODULE.bazel
new file mode 100644
index 000000000..fd5273061
--- /dev/null
+++ b/internal/module/testdata/MODULE.bazel
@@ -0,0 +1,10 @@
+module(
+    name = "test_module",
+    repo_name = "my_test_module",
+)
+
+bazel_dep(name = "rules_bar", version = "1.2.3")
+
+include("//bazel:lang.MODULE.bazel")
+
+bazel_dep(name = "rules_foo", version = "1.2.3", repo_name = "my_rules_foo")
diff --git a/internal/module/testdata/bazel/dir/deps.MODULE.bazel b/internal/module/testdata/bazel/dir/deps.MODULE.bazel
new file mode 100644
index 000000000..ccafd9582
--- /dev/null
+++ b/internal/module/testdata/bazel/dir/deps.MODULE.bazel
@@ -0,0 +1 @@
+bazel_dep(name = "rules_quz", version = "0.0.1")
diff --git a/internal/module/testdata/bazel/lang.MODULE.bazel b/internal/module/testdata/bazel/lang.MODULE.bazel
new file mode 100644
index 000000000..6d8489e4d
--- /dev/null
+++ b/internal/module/testdata/bazel/lang.MODULE.bazel
@@ -0,0 +1,4 @@
+bazel_dep(name = "rules_lang", version = "1.2.3", repo_name = "my_rules_lang")
+
+include("//:deps.MODULE.bazel")
+include("//bazel:dir/deps.MODULE.bazel")
diff --git a/internal/module/testdata/deps.MODULE.bazel b/internal/module/testdata/deps.MODULE.bazel
new file mode 100644
index 000000000..3c23d33e4
--- /dev/null
+++ b/internal/module/testdata/deps.MODULE.bazel
@@ -0,0 +1 @@
+bazel_dep(name = "rules_baz", version = "0.0.1")