diff --git a/mypy/defaults.py b/mypy/defaults.py
index 6f309668d224..ed0b8d0dc6d9 100644
--- a/mypy/defaults.py
+++ b/mypy/defaults.py
@@ -12,9 +12,41 @@
 # mypy, at least version PYTHON3_VERSION is needed.
 PYTHON3_VERSION_MIN: Final = (3, 8)  # Keep in sync with typeshed's python support
 
+
+def find_pyproject() -> str:
+    """Search for file pyproject.toml in the parent directories recursively.
+
+    It resolves symlinks, so if there is any symlink up in the tree, it does not respect them
+
+    If the file is not found until the root of FS or repository, PYPROJECT_FILE is used
+    """
+
+    def is_root(current_dir: str) -> bool:
+        parent = os.path.join(current_dir, os.path.pardir)
+        return os.path.samefile(current_dir, parent) or any(
+            os.path.isdir(os.path.join(current_dir, cvs_root)) for cvs_root in (".git", ".hg")
+        )
+
+    # Preserve the original behavior, returning PYPROJECT_FILE if exists
+    if os.path.isfile(PYPROJECT_FILE) or is_root(os.path.curdir):
+        return PYPROJECT_FILE
+
+    # And iterate over the tree
+    current_dir = os.path.pardir
+    while not is_root(current_dir):
+        config_file = os.path.join(current_dir, PYPROJECT_FILE)
+        if os.path.isfile(config_file):
+            return config_file
+        parent = os.path.join(current_dir, os.path.pardir)
+        current_dir = parent
+
+    return PYPROJECT_FILE
+
+
 CACHE_DIR: Final = ".mypy_cache"
 CONFIG_FILE: Final = ["mypy.ini", ".mypy.ini"]
-PYPROJECT_CONFIG_FILES: Final = ["pyproject.toml"]
+PYPROJECT_FILE: Final = "pyproject.toml"
+PYPROJECT_CONFIG_FILES: Final = [find_pyproject()]
 SHARED_CONFIG_FILES: Final = ["setup.cfg"]
 USER_CONFIG_FILES: Final = ["~/.config/mypy/config", "~/.mypy.ini"]
 if os.environ.get("XDG_CONFIG_HOME"):
diff --git a/test-data/unit/cmdline.pyproject.test b/test-data/unit/cmdline.pyproject.test
index 57e6facad032..e6e5f113a844 100644
--- a/test-data/unit/cmdline.pyproject.test
+++ b/test-data/unit/cmdline.pyproject.test
@@ -133,3 +133,38 @@ Neither is this!
 description = "Factory ⸻ A code generator 🏭"
 \[tool.mypy]
 [file x.py]
+
+[case testSearchRecursively]
+# cmd: mypy x.py
+[file ../pyproject.toml]
+\[tool.mypy]
+\[tool.mypy.overrides]
+module = "x"
+disallow_untyped_defs = false
+[file x.py]
+pass
+[out]
+../pyproject.toml: tool.mypy.overrides sections must be an array. Please make sure you are using double brackets like so: [[tool.mypy.overrides]]
+== Return code: 0
+
+[case testSearchRecursivelyStopsGit]
+# cmd: mypy x.py
+[file .git/test]
+[file ../pyproject.toml]
+\[tool.mypy]
+\[tool.mypy.overrides]
+module = "x"
+disallow_untyped_defs = false
+[file x.py]
+i: int = 0
+
+[case testSearchRecursivelyStopsHg]
+# cmd: mypy x.py
+[file .hg/test]
+[file ../pyproject.toml]
+\[tool.mypy]
+\[tool.mypy.overrides]
+module = "x"
+disallow_untyped_defs = false
+[file x.py]
+i: int = 0