diff --git a/.chronus/changes/peer-dependencies-2024-9-10-22-53-58.md b/.chronus/changes/peer-dependencies-2024-9-10-22-53-58.md
new file mode 100644
index 0000000000..f846ae4fa1
--- /dev/null
+++ b/.chronus/changes/peer-dependencies-2024-9-10-22-53-58.md
@@ -0,0 +1,7 @@
+---
+changeKind: internal
+packages:
+  - "@typespec/compiler"
+---
+
+Set `@typespec/compiler` as a `peerDependency` in library templates
\ No newline at end of file
diff --git a/packages/compiler/templates/__snapshots__/emitter-ts/package.json b/packages/compiler/templates/__snapshots__/emitter-ts/package.json
index e08b6c9604..be67451bea 100644
--- a/packages/compiler/templates/__snapshots__/emitter-ts/package.json
+++ b/packages/compiler/templates/__snapshots__/emitter-ts/package.json
@@ -13,13 +13,14 @@
       "default": "./dist/src/testing/index.js"
     }
   },
-  "dependencies": {
+  "peerDependencies": {
     "@typespec/compiler": "latest"
   },
   "devDependencies": {
     "@types/node": "latest",
     "@typescript-eslint/eslint-plugin": "^6.0.0",
     "@typescript-eslint/parser": "^6.0.0",
+    "@typespec/compiler": "latest",
     "eslint": "^8.45.0",
     "typescript": "^5.3.3",
     "prettier": "^3.0.3"
diff --git a/packages/compiler/templates/__snapshots__/library-ts/package.json b/packages/compiler/templates/__snapshots__/library-ts/package.json
index 079f06ca5a..d9db6f4cac 100644
--- a/packages/compiler/templates/__snapshots__/library-ts/package.json
+++ b/packages/compiler/templates/__snapshots__/library-ts/package.json
@@ -14,13 +14,14 @@
       "default": "./dist/src/testing/index.js"
     }
   },
-  "dependencies": {
+  "peerDependencies": {
     "@typespec/compiler": "latest"
   },
   "devDependencies": {
     "@types/node": "latest",
     "@typescript-eslint/eslint-plugin": "^6.0.0",
     "@typescript-eslint/parser": "^6.0.0",
+    "@typespec/compiler": "latest",
     "@typespec/library-linter": "latest",
     "eslint": "^8.45.0",
     "prettier": "^3.0.3",
diff --git a/packages/compiler/templates/emitter-ts/package.json b/packages/compiler/templates/emitter-ts/package.json
index 4806800b1b..70db6e13ab 100644
--- a/packages/compiler/templates/emitter-ts/package.json
+++ b/packages/compiler/templates/emitter-ts/package.json
@@ -13,13 +13,14 @@
       "default": "./dist/src/testing/index.js"
     }
   },
-  "dependencies": {
+  "peerDependencies": {
     "@typespec/compiler": "latest"
   },
   "devDependencies": {
     "@types/node": "latest",
     "@typescript-eslint/eslint-plugin": "^6.0.0",
     "@typescript-eslint/parser": "^6.0.0",
+    "@typespec/compiler": "latest",
     "eslint": "^8.45.0",
     "typescript": "^5.3.3",
     "prettier": "^3.0.3"
diff --git a/packages/compiler/templates/library-ts/package.json b/packages/compiler/templates/library-ts/package.json
index 99014148a6..5ad106e7e1 100644
--- a/packages/compiler/templates/library-ts/package.json
+++ b/packages/compiler/templates/library-ts/package.json
@@ -14,13 +14,14 @@
       "default": "./dist/src/testing/index.js"
     }
   },
-  "dependencies": {
+  "peerDependencies": {
     "@typespec/compiler": "latest"
   },
   "devDependencies": {
     "@types/node": "latest",
     "@typescript-eslint/eslint-plugin": "^6.0.0",
     "@typescript-eslint/parser": "^6.0.0",
+    "@typespec/compiler": "latest",
     "@typespec/library-linter": "latest",
     "eslint": "^8.45.0",
     "prettier": "^3.0.3",