diff --git a/packages/angular/build/src/builders/library/tests/behavior/watch_spec.ts b/packages/angular/build/src/builders/library/tests/behavior/watch_spec.ts
index 415f24d269c0..cfa23f4f6bbb 100644
--- a/packages/angular/build/src/builders/library/tests/behavior/watch_spec.ts
+++ b/packages/angular/build/src/builders/library/tests/behavior/watch_spec.ts
@@ -8,6 +8,7 @@
 
 import { rm } from 'node:fs/promises';
 import { executeLibraryBuilder } from '../../builder';
+import { CompilationMode } from '../../schema';
 import { BASE_OPTIONS, LIBRARY_BUILDER_INFO, describeLibraryBuilder } from '../setup';
 
 describeLibraryBuilder(executeLibraryBuilder, LIBRARY_BUILDER_INFO, (harness) => {
@@ -601,5 +602,203 @@ describeLibraryBuilder(executeLibraryBuilder, LIBRARY_BUILDER_INFO, (harness) =>
         },
       ]);
     });
+
+    it('should only rebuild affected entry point when an external template is modified with isolatedModules enabled', async () => {
+      await harness.writeFiles({
+        'projects/lib/src/lib/lib.component.html': '<p>Primary Initial</p>',
+        'projects/lib/src/lib/lib.component.ts': `
+          import { Component } from '@angular/core';
+
+          @Component({
+            selector: 'lib-primary',
+            templateUrl: './lib.component.html',
+          })
+          export class LibComponent {}
+        `,
+        'projects/lib/secondary/src/secondary.component.html': '<p>Secondary Initial</p>',
+        'projects/lib/secondary/src/secondary.component.ts': `
+          import { Component } from '@angular/core';
+
+          @Component({
+            selector: 'lib-secondary',
+            templateUrl: './secondary.component.html',
+          })
+          export class SecondaryComponent {}
+        `,
+        'projects/lib/secondary/src/public-api.ts': `
+          export { SecondaryComponent } from './secondary.component';
+        `,
+      });
+
+      await harness.modifyFile('projects/lib/tsconfig.lib.json', (content) => {
+        const tsconfig = JSON.parse(content);
+        tsconfig.compilerOptions.isolatedModules = true;
+
+        return JSON.stringify(tsconfig, null, 2);
+      });
+
+      await harness.modifyFile('projects/lib/package.json', (content) => {
+        const pkg = JSON.parse(content);
+        pkg.exports = {
+          '.': './src/public-api.ts',
+          './secondary': './secondary/src/public-api.ts',
+        };
+
+        return JSON.stringify(pkg, null, 2);
+      });
+
+      harness.useTarget('build', {
+        ...BASE_OPTIONS,
+        watch: true,
+      });
+
+      await harness.executeWithCases([
+        async ({ result }) => {
+          expect(result?.success).toBeTrue();
+          expect(harness.readFile('dist/lib/fesm2022/lib-secondary.mjs')).toContain(
+            'Secondary Initial',
+          );
+          expect(harness.readFile('dist/lib/types/lib.d.ts')).toContain('ɵcmp');
+          expect(harness.readFile('dist/lib/types/lib-secondary.d.ts')).toContain('ɵcmp');
+
+          await harness.writeFile(
+            'projects/lib/secondary/src/secondary.component.html',
+            '<p>Secondary Updated</p>',
+          );
+        },
+        ({ result, logs }) => {
+          expect(result?.success).toBeTrue();
+          expect(harness.readFile('dist/lib/fesm2022/lib-secondary.mjs')).toContain(
+            'Secondary Updated',
+          );
+          expect(harness.readFile('dist/lib/types/lib.d.ts')).toContain('ɵcmp');
+          expect(harness.readFile('dist/lib/types/lib-secondary.d.ts')).toContain('ɵcmp');
+
+          expect(logs).toContain(
+            jasmine.objectContaining({
+              message: jasmine.stringContaining('Compiling lib/secondary...'),
+            }),
+          );
+          expect(logs).not.toContain(
+            jasmine.objectContaining({
+              message: jasmine.stringContaining('Compiling lib...'),
+            }),
+          );
+        },
+      ]);
+    });
+
+    it('should rebuild dependent entry point when a shared component input is added in watch mode', async () => {
+      await harness.writeFiles({
+        'projects/lib/shared/src/public-api.ts': `
+          import { Component } from '@angular/core';
+
+          @Component({
+            selector: 'lib-shared-icon',
+            template: '<span>icon</span>',
+          })
+          export class SharedIconComponent {}
+        `,
+        'projects/lib/src/lib/lib.component.ts': `
+          import { Component } from '@angular/core';
+          import { SharedIconComponent } from 'lib/shared';
+
+          @Component({
+            selector: 'lib-primary',
+            imports: [SharedIconComponent],
+            template: '<lib-shared-icon />',
+          })
+          export class LibComponent {}
+        `,
+      });
+
+      await harness.modifyFile('projects/lib/tsconfig.lib.json', (content) => {
+        const tsconfig = JSON.parse(content);
+        tsconfig.compilerOptions.isolatedModules = true;
+
+        return JSON.stringify(tsconfig, null, 2);
+      });
+
+      await harness.modifyFile('projects/lib/package.json', (content) => {
+        const pkg = JSON.parse(content);
+        pkg.exports = {
+          '.': './src/public-api.ts',
+          './shared': './shared/src/public-api.ts',
+        };
+
+        return JSON.stringify(pkg, null, 2);
+      });
+
+      harness.useTarget('build', {
+        ...BASE_OPTIONS,
+        compilationMode: CompilationMode.Partial,
+        watch: true,
+      });
+
+      await harness.executeWithCases([
+        async ({ result }) => {
+          expect(result?.success).toBeTrue();
+
+          // Trigger a rebuild of `lib` first so `lib/shared` undergoes a `.d.ts`-only check
+          await harness.writeFile(
+            'projects/lib/src/lib/lib.component.ts',
+            `
+            import { Component } from '@angular/core';
+            import { SharedIconComponent } from 'lib/shared';
+
+            @Component({
+              selector: 'lib-primary',
+              imports: [SharedIconComponent],
+              template: '<lib-shared-icon class="updated" />',
+            })
+            export class LibComponent {}
+            `,
+          );
+        },
+        async ({ result, logs }) => {
+          expect(result?.success).toBeTrue();
+          expect(logs).toContain(
+            jasmine.objectContaining({
+              message: jasmine.stringContaining('Compiling lib...'),
+            }),
+          );
+          expect(logs).not.toContain(
+            jasmine.objectContaining({
+              message: jasmine.stringContaining('Compiling lib/shared...'),
+            }),
+          );
+
+          // Add a new @Input() to SharedIconComponent
+          await harness.writeFile(
+            'projects/lib/shared/src/public-api.ts',
+            `
+            import { Component, Input } from '@angular/core';
+
+            @Component({
+              selector: 'lib-shared-icon',
+              template: '<span>{{ name }}</span>',
+            })
+            export class SharedIconComponent {
+              @Input() name = 'default';
+            }
+            `,
+          );
+        },
+        ({ result, logs }) => {
+          expect(result?.success).toBeTrue();
+          expect(logs).toContain(
+            jasmine.objectContaining({
+              message: jasmine.stringContaining('Compiling lib/shared...'),
+            }),
+          );
+          expect(logs).toContain(
+            jasmine.objectContaining({
+              message: jasmine.stringContaining('Compiling lib...'),
+            }),
+          );
+          expect(harness.readFile('dist/lib/fesm2022/lib.mjs')).toContain('"name"');
+        },
+      ]);
+    });
   });
 });
diff --git a/packages/angular/build/src/tools/angular/compilation/aot-compilation.ts b/packages/angular/build/src/tools/angular/compilation/aot-compilation.ts
index 749962e3def6..d90714a08481 100644
--- a/packages/angular/build/src/tools/angular/compilation/aot-compilation.ts
+++ b/packages/angular/build/src/tools/angular/compilation/aot-compilation.ts
@@ -47,6 +47,15 @@ const TTC_EXTENSION = '.ngtypecheck.ts';
  */
 const TTC_EXTENSION_LENGTH = TTC_EXTENSION.length;
 
+/**
+ * Internal TypeScript `ts.EmitOnly` enum values used by `Program.emit`.
+ */
+enum EmitOnly {
+  Js = 0,
+  Dts = 1,
+  BuilderSignature = 2,
+}
+
 /**
  * Checks if a file is an Angular type-checking shim file.
  */
@@ -189,7 +198,7 @@ export class AotCompilation extends TypeScriptCompilation {
     );
 
     const filesWithoutDtsSignature = this.#state?.filesWithoutDtsSignature ?? new Set<string>();
-    if (!this.#state) {
+    if (!this.#state && !usingBuildInfo && (useTypeChecking || useTypeScriptTranspilation)) {
       for (const sourceFile of typeScriptProgram.getSourceFiles()) {
         if (
           !sourceFile.isDeclarationFile &&
@@ -413,19 +422,30 @@ export class AotCompilation extends TypeScriptCompilation {
           typeScriptProgram,
         );
 
+        // Temporarily enable `isolatedModules` and `assumeChangesOnlyAffectDirectDependencies` while
+        // draining the newly created `.ngtypecheck.ts` files. Because each component `.ts` file
+        // references its `.ngtypecheck.ts` shim via `sourceFile.referencedFiles`, TypeScript's
+        // `referencedMap` treats the component `.ts` file as depending on its `.ngtypecheck.ts` shim.
+        // Without both flags (whether `isolatedModules` is enabled or disabled in `tsconfig`),
+        // TypeScript would walk from `.ngtypecheck.ts` to the component `.ts` file and its transitive
+        // importers, resetting their `.d.ts` shape signatures and queueing them into
+        // `affectedFilesPendingEmit` for the next incremental rebuild.
+        const compilerOptions = currentTsProgram.getCompilerOptions();
+        const prevIsolatedModules = compilerOptions.isolatedModules;
+        const prevAssumeDirect = compilerOptions.assumeChangesOnlyAffectDirectDependencies;
+        compilerOptions.isolatedModules = true;
+        compilerOptions.assumeChangesOnlyAffectDirectDependencies = true;
+
         const baseEmit = currentTsProgram.emit;
         currentTsProgram.emit = () => ({ emitSkipped: true, diagnostics: [] });
         try {
-          while (
-            this.#state.typeScriptProgram.getSemanticDiagnosticsOfNextAffectedFile(
-              undefined,
-              () => true,
-            )
-          ) {
+          while (this.#state.typeScriptProgram.emitNextAffectedFile(() => {})) {
             /* empty */
           }
         } finally {
           currentTsProgram.emit = baseEmit;
+          compilerOptions.isolatedModules = prevIsolatedModules;
+          compilerOptions.assumeChangesOnlyAffectDirectDependencies = prevAssumeDirect;
         }
       }
     }
@@ -442,11 +462,12 @@ export class AotCompilation extends TypeScriptCompilation {
       useTypeScriptTranspilation,
     } = this.#state;
     const compilerOptions = typeScriptProgram.getCompilerOptions();
-    const isLibraryEmit = !!compilerOptions.declaration;
+    const emitDeclarations = !!compilerOptions.declaration;
     const buildInfoFilename = compilerOptions.tsBuildInfoFile ?? '.tsbuildinfo';
 
     const emittedFiles = new Map<string, EmitFileResult>();
     const emittedSourceFiles = new Set<ts.SourceFile>();
+    const emittedDtsSourceFiles = new Set<ts.SourceFile>();
     const writeFileCallback: ts.WriteFileCallback = (filename, contents, _a, _b, sourceFiles) => {
       if (!sourceFiles?.length && filename.endsWith(buildInfoFilename)) {
         // Save builder info contents to specified location
@@ -461,13 +482,20 @@ export class AotCompilation extends TypeScriptCompilation {
         return;
       }
 
-      angularCompiler.incrementalCompilation.recordSuccessfulEmit(sourceFile);
-      emittedSourceFiles.add(sourceFile);
-      const targetFilename = isLibraryEmit ? filename : sourceFile.fileName;
+      const isMap = filename.endsWith('.map');
+      const isDts = !isMap && /\.d\.[cm]?ts$/i.test(filename);
+      if (!emitDeclarations || (!isMap && !isDts)) {
+        angularCompiler.incrementalCompilation.recordSuccessfulEmit(sourceFile);
+        emittedSourceFiles.add(sourceFile);
+      } else if (isDts) {
+        emittedDtsSourceFiles.add(sourceFile);
+      }
+
+      const targetFilename = emitDeclarations ? filename : sourceFile.fileName;
       emittedFiles.set(targetFilename, { filename: targetFilename, contents });
     };
     const transformers = angularCompiler.prepareEmit().transformers;
-    if (!isLibraryEmit) {
+    if (!emitDeclarations) {
       transformers.before ??= [];
       transformers.before.push(
         replaceBootstrap(() => typeScriptProgram.getProgram().getTypeChecker()),
@@ -477,6 +505,8 @@ export class AotCompilation extends TypeScriptCompilation {
       if (!this.browserOnlyBuild) {
         transformers.before.push(lazyRoutesTransformer(compilerOptions, compilerHost));
       }
+    } else if (transformers.before?.length && transformers.afterDeclarations?.length) {
+      ensurePreDeclarationTransformers(transformers);
     }
 
     // Emit is handled in write file callback when using TypeScript
@@ -518,15 +548,14 @@ export class AotCompilation extends TypeScriptCompilation {
         continue;
       }
 
-      if (
-        angularCompiler.incrementalCompilation.safeToSkipEmit(sourceFile) &&
-        (!useTypeScriptTranspilation || !affectedFiles.has(sourceFile))
-      ) {
+      if (angularCompiler.incrementalCompilation.safeToSkipEmit(sourceFile)) {
         continue;
       }
 
       if (useTypeScriptTranspilation) {
-        const emitOnly = affectedFiles.has(sourceFile) ? undefined : false;
+        const emitOnly = emittedDtsSourceFiles.has(sourceFile)
+          ? (EmitOnly.Js as unknown as boolean)
+          : undefined;
         typeScriptProgram.emit(sourceFile, writeFileCallback, undefined, emitOnly, transformers);
         continue;
       }
@@ -582,6 +611,60 @@ export class AotCompilation extends TypeScriptCompilation {
   }
 }
 
+/**
+ * When TypeScript's `BuilderProgram.emitNextAffectedFile` emits `.d.ts`-only (`emitOnly = Dts`)
+ * for a transitive importer, TypeScript skips `transformers.before`. However, Angular's
+ * `declarationTransformFactory` in `afterDeclarations` relies on `ivyTransformFactory` in
+ * `before` having compiled the file's classes to populate `dtsTransforms`.
+ *
+ * This helper ensures `before` transformers have executed on the original `SourceFile` prior to
+ * `afterDeclarations`, and caches the transformed `SourceFile` so a subsequent `.js` emit for the
+ * same file does not re-execute `before` transformers.
+ */
+function ensurePreDeclarationTransformers(transformers: ts.CustomTransformers): void {
+  if (!transformers.before?.length || !transformers.afterDeclarations?.length) {
+    return;
+  }
+
+  const beforeTransformers = transformers.before as ts.TransformerFactory<ts.SourceFile>[];
+  const transformedSourceFiles = new Set<ts.SourceFile>();
+  transformers.before = beforeTransformers.map((factory, index) =>
+    index === 0
+      ? (context) => {
+          const transform = factory(context);
+
+          return (sourceFile) => {
+            transformedSourceFiles.add(ts.getOriginalNode(sourceFile, ts.isSourceFile));
+
+            return transform(sourceFile);
+          };
+        }
+      : factory,
+  );
+  transformers.afterDeclarations = [
+    (context) => {
+      let beforeTransforms: ts.Transformer<ts.SourceFile>[] | undefined;
+
+      return (fileOrBundle) => {
+        if (!ts.isBundle(fileOrBundle)) {
+          const originalSourceFile = ts.getOriginalNode(fileOrBundle, ts.isSourceFile);
+          if (!transformedSourceFiles.has(originalSourceFile)) {
+            transformedSourceFiles.add(originalSourceFile);
+            beforeTransforms ??= beforeTransformers.map((factory) => factory(context));
+            let current = originalSourceFile;
+            for (const transform of beforeTransforms) {
+              current = transform(current);
+            }
+          }
+        }
+
+        return fileOrBundle;
+      };
+    },
+    ...transformers.afterDeclarations,
+  ];
+}
+
 function findAffectedFiles(
   builder: ts.EmitAndSemanticDiagnosticsBuilderProgram,
   { ignoreForDiagnostics, incrementalCompilation }: ng.NgtscProgram['compiler'],
@@ -591,10 +674,15 @@ function findAffectedFiles(
 ): Set<ts.SourceFile> {
   const affectedFiles = new Set<ts.SourceFile>();
 
-  // Temporarily disable `isolatedModules` and `verbatimModuleSyntax` while walking affected
-  // files so TypeScript's `getFilesAffectedByUpdatedShapeWhenModuleEmit` yields dependent
-  // `.ngtypecheck.ts` shims to the `ignoreSourceFile` callback when a file's `.d.ts` shape
-  // changes, instead of returning only the modified file itself.
+  // Temporarily disable `isolatedModules` and `verbatimModuleSyntax` while walking affected files.
+  // In TypeScript, `getIsolatedModules(options)` is true when either `isolatedModules` or
+  // `verbatimModuleSyntax` is enabled, which causes `getFilesAffectedByUpdatedShapeWhenModuleEmit`
+  // to short-circuit and return only `[sourceFileWithUpdatedShape]` instead of walking
+  // `referencedMap` during `getSemanticDiagnosticsOfNextAffectedFile`.
+  // Disabling both flags forces TypeScript to traverse `referencedMap` when a file's `.d.ts` shape
+  // signature changes so that dependent files—especially `.ngtypecheck.ts` shims that reference
+  // directives or pipes used in templates—are visited by the `ignoreSourceFile` callback and have
+  // their own `.d.ts` shape signatures updated along the dependency chain.
   const compilerOptions = builder.getCompilerOptions();
   const prevIsolatedModules = compilerOptions.isolatedModules;
   const prevVerbatimModuleSyntax = compilerOptions.verbatimModuleSyntax;
@@ -604,6 +692,8 @@ function findAffectedFiles(
   const program = builder.getProgram();
   const baseEmit = program.emit;
   const oldProgram = oldBuilder?.getProgram();
+  const hadDtsSignatureComputed = new Set<string>();
+  const tsAffectedFiles: ts.SourceFile[] = [];
   program.emit = (
     targetSourceFile,
     writeFile,
@@ -641,8 +731,9 @@ function findAffectedFiles(
             (fileName, text, writeByteOrderMark, onError, sourceFiles, data) => {
               const newHasDiagnostics = !!(data as { diagnostics?: unknown[] } | undefined)
                 ?.diagnostics?.length;
-              if (text !== oldDtsText || newHasDiagnostics !== oldHasDiagnostics) {
+              if (text !== oldDtsText || oldHasDiagnostics || newHasDiagnostics) {
                 filesWithoutDtsSignature.delete(targetSourceFile.fileName);
+                hadDtsSignatureComputed.add(targetSourceFile.fileName);
                 writeFile?.(fileName, text, writeByteOrderMark, onError, sourceFiles, data);
               }
             },
@@ -655,6 +746,8 @@ function findAffectedFiles(
 
         filesWithoutDtsSignature.delete(targetSourceFile.fileName);
       }
+
+      hadDtsSignatureComputed.add(targetSourceFile.fileName);
     }
 
     return baseEmit.call(
@@ -680,7 +773,7 @@ function findAffectedFiles(
           // A TTC shim is a file that has been ignored for diagnostics and has a filename ending in `.ngtypecheck.ts`.
           if (isNgTypeCheckFile(sourceFile.fileName)) {
             // This file name conversion relies on internal compiler logic and should be converted
-            // to an official method when available. 15 is length of `.ngtypecheck.ts`
+            // to an official method when available.
             const originalFilename = getOriginalFilename(sourceFile.fileName);
             const originalSourceFile = builder.getSourceFile(originalFilename);
             if (originalSourceFile) {
@@ -689,6 +782,7 @@ function findAffectedFiles(
           }
         } else {
           affectedFiles.add(sourceFile);
+          tsAffectedFiles.push(sourceFile);
         }
 
         return true;
@@ -702,6 +796,16 @@ function findAffectedFiles(
     compilerOptions.verbatimModuleSyntax = prevVerbatimModuleSyntax;
   }
 
+  // Transitive importers visited by `getSemanticDiagnosticsOfNextAffectedFile` via
+  // `handleDtsMayChangeOf` do not have a `.d.ts` signature computed via `program.emit` and
+  // instead have their BuilderProgram signature reset to `sourceFile.version`. Track them so
+  // `populatePreviousDtsSignatures` restores their `.d.ts` signature if they are modified later.
+  for (const sourceFile of tsAffectedFiles) {
+    if (!sourceFile.isDeclarationFile && !hadDtsSignatureComputed.has(sourceFile.fileName)) {
+      filesWithoutDtsSignature.add(sourceFile.fileName);
+    }
+  }
+
   // Also include files identified by Angular's incremental compilation graph as needing
   // re-emission or template re-typechecking (such as selector renames or required input changes
   // that only affect Angular metadata without altering standard TypeScript `.d.ts` signatures).
@@ -726,7 +830,7 @@ function findAffectedFiles(
     for (const sourceFile of builder.getSourceFiles()) {
       if (ignoreForDiagnostics.has(sourceFile) && isNgTypeCheckFile(sourceFile.fileName)) {
         // This file name conversion relies on internal compiler logic and should be converted
-        // to an official method when available. 15 is length of `.ngtypecheck.ts`
+        // to an official method when available.
         const originalFilename = getOriginalFilename(sourceFile.fileName);
         const originalSourceFile = builder.getSourceFile(originalFilename);
         if (originalSourceFile) {
@@ -783,7 +887,7 @@ function populatePreviousDtsSignatures(
     targetSourceFile?: ts.SourceFile,
     writeFile?: ts.WriteFileCallback,
     cancellationToken?: ts.CancellationToken,
-    emitOnlyDtsFiles?: boolean | number,
+    emitOnlyDtsFiles?: boolean | EmitOnly,
     customTransformers?: ts.CustomTransformers,
     forceDtsEmit?: boolean,
   ) => ts.EmitResult;
@@ -793,7 +897,7 @@ function populatePreviousDtsSignatures(
       targetSourceFile,
       writeFile,
       cancellationToken,
-      2, // ts.EmitOnly.BuilderSignature
+      EmitOnly.BuilderSignature,
       undefined,
       true, // forceDtsEmit
     );