diff --git a/.chronus/changes/fix-named-union-versioning-2024-8-11-15-19-14.md b/.chronus/changes/fix-named-union-versioning-2024-8-11-15-19-14.md
new file mode 100644
index 000000000..ee8e74294
--- /dev/null
+++ b/.chronus/changes/fix-named-union-versioning-2024-8-11-15-19-14.md
@@ -0,0 +1,7 @@
+---
+changeKind: fix
+packages:
+  - "@typespec/versioning"
+---
+
+Fixes versioning when using versioned named union variants
diff --git a/packages/versioning/src/validate.ts b/packages/versioning/src/validate.ts
index 7114b1353..a93713ad6 100644
--- a/packages/versioning/src/validate.ts
+++ b/packages/versioning/src/validate.ts
@@ -533,8 +533,10 @@ function validateReference(program: Program, source: Type | Type[], target: Type
 
   switch (target.kind) {
     case "Union":
-      for (const variant of target.variants.values()) {
-        validateReference(program, source, variant.type);
+      if (typeof target.name !== "string") {
+        for (const variant of target.variants.values()) {
+          validateReference(program, source, variant.type);
+        }
       }
       break;
     case "Tuple":
diff --git a/packages/versioning/test/versioning.test.ts b/packages/versioning/test/versioning.test.ts
index 3cb09f7eb..fffcb7e53 100644
--- a/packages/versioning/test/versioning.test.ts
+++ b/packages/versioning/test/versioning.test.ts
@@ -680,6 +680,31 @@ describe("versioning: logic", () => {
       strictEqual((v6 as any as IntrinsicType).name, "never");
     });
 
+    it("does not emit diagnostic when using named versioned union variant in incompatible versioned source", async () => {
+      const diagnostics = await runner.diagnose(`
+        @versioned(Versions)
+        namespace TestService {
+          enum Versions {v1, v2}
+
+          @added(Versions.v2)
+          model Versioned {}
+
+          union NamedUnion {
+            string;
+
+            @added(Versions.v2)
+            Versioned;
+          }
+          
+          @added(Versions.v1)
+          model Foo {
+            content: NamedUnion;
+          }
+        }
+      `);
+      expectDiagnosticEmpty(diagnostics);
+    });
+
     async function versionedUnion(versions: string[], union: string) {
       const { Test } = (await runner.compile(`
       @versioned(Versions)