diff --git a/lib/csdl2markdown.js b/lib/csdl2markdown.js
index a3e08842..d67640a9 100644
--- a/lib/csdl2markdown.js
+++ b/lib/csdl2markdown.js
@@ -314,7 +314,9 @@ module.exports.csdl2markdown = function (filename, csdl, referenced = {}) {
     }
 
     if (type.$Kind == "TypeDefinition") {
-      lines.push("**Type:** " + typeLink({ $Type: type.$UnderlyingType }));
+      lines.push(
+        "**Type:** " + typeLink({ ...type, $Type: type.$UnderlyingType }),
+      );
       lines.push("");
     }
 
@@ -610,13 +612,9 @@ module.exports.csdl2markdown = function (filename, csdl, referenced = {}) {
    * @return {string} Text
    */
   function applicableTermsList(applicableTerms) {
-    const text = [];
-    if (applicableTerms.length > 0) text.push("<br>Applicable Annotation Terms:<ul>");
-    applicableTerms.forEach((term) => {
-      text.push(`<li>${typeLink({ $Type: term })}</li>`);
-    });
-    if (applicableTerms.length > 0) text.push("</ul>");
-    return text.join("");
+    return applicableTerms.length > 0
+      ? "<br>Applicable Annotation Terms:" + linkList(applicableTerms)
+      : "";
   }
 
   /**
@@ -625,13 +623,9 @@ module.exports.csdl2markdown = function (filename, csdl, referenced = {}) {
    * @return {string} Text
    */
   function allowedTermsList(allowedTerms) {
-    const text = [];
-    if (allowedTerms.length > 0) text.push("<br>Allowed terms:<ul>");
-    allowedTerms.forEach((term) => {
-      text.push(`<li>${typeLink({ $Type: term })}</li>`);
-    });
-    if (allowedTerms.length > 0) text.push("</ul>");
-    return text.join("");
+    return allowedTerms.length > 0
+      ? "<br>Allowed Terms:" + linkList(allowedTerms)
+      : "";
   }
 
   /**
@@ -729,7 +723,7 @@ module.exports.csdl2markdown = function (filename, csdl, referenced = {}) {
     if (modelElement.$Type == "com.sap.vocabularies.Common.v1.Experimental")
       customFile = "Common.md";
 
-    return (
+    let type =
       (modelElement.$Collection ? "\\[" : "") +
       (customType ? "[" : "") +
       (customType
@@ -741,8 +735,31 @@ module.exports.csdl2markdown = function (filename, csdl, referenced = {}) {
             : np.name) +
       (modelElement.$Nullable ? "?" : "") +
       (customType ? "](" + customFile + "#" + np.name + ")" : "") +
-      (modelElement.$Collection ? "\\]" : "")
-    );
+      (modelElement.$Collection ? "\\]" : "");
+    if (modelElement[voc.Validation.DerivedTypeConstraint])
+      type +=
+        "<br>Allowed Derived Types:" +
+        linkList(modelElement[voc.Validation.DerivedTypeConstraint]);
+    return type;
+  }
+
+  /**
+   * a qualified name consists of a namespace or alias, a dot, and a simple name
+   * @param {object} list of model element names
+   * @return {string} list of links to these model elements
+   */
+  function linkList(list) {
+    let text = "<ul>";
+    for (let t of list) {
+      let link;
+      if (t.startsWith("Collection(")) {
+        t = t.substring(11, t.length - 1);
+        link = "[.]";
+      } else link = ".";
+      text += `<li>${link.replace(".", typeLink({ $Type: t }))}</li>`;
+    }
+    text += "</ul>";
+    return text;
   }
 
   /**
@@ -789,6 +806,7 @@ module.exports.csdl2markdown = function (filename, csdl, referenced = {}) {
         "AllowedValues",
         "ApplicableTerms",
         "AllowedTerms",
+        "DerivedTypeConstraint",
         "Exclusive",
         "Maximum",
         "Minimum",
diff --git a/test/csdl2markdown.test.js b/test/csdl2markdown.test.js
index d1ff2385..1e7eca0d 100644
--- a/test/csdl2markdown.test.js
+++ b/test/csdl2markdown.test.js
@@ -263,7 +263,7 @@ describe("Non-OASIS Vocabularies", function () {
       "",
       "Term|Type|Description",
       ":---|:---|:----------",
-      'Reference|AnnotationPath|<a name="Reference"></a>Reference to a description<br>Allowed terms:<ul><li>[Description](https://github.com/oasis-tcs/odata-vocabularies/blob/main/vocabularies/Org.OData.Core.V1.md#Description)</li><li>[WithoutReference](#WithoutReference)</li></ul>',
+      'Reference|AnnotationPath|<a name="Reference"></a>Reference to a description<br>Allowed Terms:<ul><li>[Description](https://github.com/oasis-tcs/odata-vocabularies/blob/main/vocabularies/Org.OData.Core.V1.md#Description)</li><li>[WithoutReference](#WithoutReference)</li></ul>',
       "",
     ];
     const markdown = lib.csdl2markdown(filename, vocabulary);
@@ -557,6 +557,69 @@ describe("Edge cases", function () {
     const markdown = lib.csdl2markdown(filename, vocabulary);
     assert.deepStrictEqual(markdown, expectedMarkdown);
   });
+
+  it("Allowed derived types", function () {
+    const filename = "allowedDerivedTypes.xml";
+    const type = {
+      "@Org.OData.Core.V1.Description": "Tag or duration",
+      "@Org.OData.Validation.V1.DerivedTypeConstraint": [
+        "Org.OData.Core.V1.Tag",
+        "Edm.Duration",
+      ],
+    };
+    const mdtype =
+      "PrimitiveType<br>Allowed Derived Types:<ul><li>[Tag](https://github.com/oasis-tcs/odata-vocabularies/blob/main/vocabularies/Org.OData.Core.V1.md#Tag)</li><li>Duration</li></ul>";
+    const vocabulary = {
+      $Version: "4.01",
+      $Reference: {
+        "https://oasis-tcs.github.io/odata-vocabularies/vocabularies/Org.OData.Core.V1.json":
+          {
+            $Include: [
+              {
+                $Namespace: "Org.OData.Core.V1",
+              },
+            ],
+          },
+      },
+      "Allowed.v1": {
+        Duration: {
+          $Kind: "TypeDefinition",
+          $UnderlyingType: "Edm.PrimitiveType",
+          ...type,
+        },
+        Event: {
+          $Kind: "ComplexType",
+          Duration: {
+            $Type: "Edm.PrimitiveType",
+            ...type,
+          },
+        },
+      },
+    };
+    const expectedMarkdown = [
+      "# Allowed Vocabulary",
+      "**Namespace: [Allowed.v1](allowedDerivedTypes.xml)**",
+      "",
+      "",
+      "",
+      '<a name="Duration"></a>',
+      "## Duration",
+      "**Type:** " + mdtype,
+      "",
+      "Tag or duration",
+      "",
+      '<a name="Event"></a>',
+      "## Event",
+      "",
+      "",
+      "Property|Type|Description",
+      ":-------|:---|:----------",
+      "Duration|" + mdtype + "|Tag or duration",
+      "",
+    ];
+    const markdown = lib.csdl2markdown(filename, vocabulary);
+    assert.deepStrictEqual(markdown, expectedMarkdown);
+  });
 });
 
 function check(actual, expected) {