diff --git a/.changeset/nasty-games-grab.md b/.changeset/nasty-games-grab.md
new file mode 100644
index 0000000000..3a4a892418
--- /dev/null
+++ b/.changeset/nasty-games-grab.md
@@ -0,0 +1,6 @@
+---
+"@pnpm/outdated": patch
+"pnpm": patch
+---
+
+Fix error as in `update -i -r` with git specifiers [#7415](https://github.com/pnpm/pnpm/issues/7415).
diff --git a/pkg-manager/plugin-commands-installation/test/update/issue-7415.ts b/pkg-manager/plugin-commands-installation/test/update/issue-7415.ts
new file mode 100644
index 0000000000..005bfe2bfa
--- /dev/null
+++ b/pkg-manager/plugin-commands-installation/test/update/issue-7415.ts
@@ -0,0 +1,96 @@
+import path from 'path'
+import { preparePackages } from '@pnpm/prepare'
+import { REGISTRY_MOCK_PORT } from '@pnpm/registry-mock'
+import { update, install } from '@pnpm/plugin-commands-installation'
+import * as enquirer from 'enquirer'
+import { readProjects } from '@pnpm/filter-workspace-packages'
+
+jest.mock('enquirer', () => ({ prompt: jest.fn() }))
+
+// eslint-disable-next-line
+const prompt = enquirer.prompt as any as jest.Mock<any, any, any>
+
+const REGISTRY_URL = `http://localhost:${REGISTRY_MOCK_PORT}`
+
+const DEFAULT_OPTIONS = {
+  argv: {
+    original: [],
+  },
+  bail: false,
+  bin: 'node_modules/.bin',
+  extraEnv: {},
+  cliOptions: {},
+  deployAllFiles: false,
+  include: {
+    dependencies: true,
+    devDependencies: true,
+    optionalDependencies: true,
+  },
+  lock: true,
+  pnpmfile: '.pnpmfile.cjs',
+  pnpmHomeDir: '',
+  rawConfig: { registry: REGISTRY_URL },
+  rawLocalConfig: { registry: REGISTRY_URL },
+  registries: {
+    default: REGISTRY_URL,
+  },
+  rootProjectManifestDir: '',
+  sort: true,
+  userConfig: {},
+  workspaceConcurrency: 1,
+}
+
+test('interactive recursive should not error on git specifier override', async () => {
+  preparePackages([
+    {
+      location: '.',
+      package: {
+        pnpm: {
+          overrides: {
+            'is-negative': 'github:kevva/is-negative#2.1.0',
+          },
+        },
+      },
+    },
+    {
+      location: './project-1',
+      package: {
+        dependencies: {
+          'is-negative': '2.1.0',
+        },
+      },
+    },
+  ])
+
+  prompt.mockResolvedValue({
+    updateDependencies: [],
+  })
+
+  const { allProjects, selectedProjectsGraph } = await readProjects(process.cwd(), [])
+  const sharedOptions = {
+    ...DEFAULT_OPTIONS,
+    allProjects,
+    selectedProjectsGraph,
+    recursive: true,
+    linkWorkspacePackages: true,
+    cacheDir: path.resolve('cache'),
+    storeDir: path.resolve('store'),
+    dir: process.cwd(),
+    lockfileDir: process.cwd(),
+    workspaceDir: process.cwd(),
+  }
+
+  await install.handler({
+    ...sharedOptions,
+  })
+  await update.handler({
+    ...sharedOptions,
+    interactive: true,
+    latest: true,
+    cliOptions: {
+      dev: true,
+      optional: true,
+      production: true,
+    },
+  })
+})
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index b46aaa8cdb..32af664d83 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -5261,6 +5261,9 @@ importers:
       '@pnpm/error':
         specifier: workspace:*
         version: link:../../packages/error
+      '@pnpm/hooks.read-package-hook':
+        specifier: workspace:*
+        version: link:../../hooks/read-package-hook
       '@pnpm/lockfile-file':
         specifier: workspace:*
         version: link:../../lockfile/lockfile-file
@@ -9377,7 +9380,7 @@ packages:
     resolution: {integrity: sha512-YmG+oTBCyrAoMIx5g2I9CfyurSpHyoan+9SCj7laaFKseOe3lFEyIVKvwRBQMmSt8uzh+eY5RWeQnoyyOs6AbA==}
     engines: {node: '>=14.15.0'}
     peerDependencies:
-      '@yarnpkg/fslib': ^3.0.0-rc.25
+      '@yarnpkg/fslib': 3.0.0-rc.25
     dependencies:
       '@types/emscripten': 1.39.10
       '@yarnpkg/fslib': 3.0.0-rc.25
diff --git a/reviewing/outdated/package.json b/reviewing/outdated/package.json
index b0e667f918..dfc6ccf98c 100644
--- a/reviewing/outdated/package.json
+++ b/reviewing/outdated/package.json
@@ -37,6 +37,7 @@
     "@pnpm/constants": "workspace:*",
     "@pnpm/dependency-path": "workspace:*",
     "@pnpm/error": "workspace:*",
+    "@pnpm/hooks.read-package-hook": "workspace:*",
     "@pnpm/lockfile-file": "workspace:*",
     "@pnpm/lockfile-utils": "workspace:*",
     "@pnpm/manifest-utils": "workspace:*",
diff --git a/reviewing/outdated/src/outdated.ts b/reviewing/outdated/src/outdated.ts
index f65d7028f3..59dd27995a 100644
--- a/reviewing/outdated/src/outdated.ts
+++ b/reviewing/outdated/src/outdated.ts
@@ -20,6 +20,7 @@ import {
 import * as dp from '@pnpm/dependency-path'
 import semver from 'semver'
 import { createMatcher } from '@pnpm/matcher'
+import { createReadPackageHook } from '@pnpm/hooks.read-package-hook'
 
 export * from './createManifestGetter'
 
@@ -54,7 +55,22 @@ export async function outdated (
   if (opts.wantedLockfile == null) {
     throw new PnpmError('OUTDATED_NO_LOCKFILE', `No lockfile in directory "${opts.lockfileDir}". Run \`pnpm install\` to generate one.`)
   }
-  const allDeps = getAllDependenciesFromManifest(opts.manifest)
+
+  async function getOverriddenManifest () {
+    const overrides = opts.currentLockfile?.overrides ?? opts.wantedLockfile?.overrides
+    if (overrides) {
+      const readPackageHook = createReadPackageHook({
+        lockfileDir: opts.lockfileDir,
+        overrides,
+      })
+      const manifest = await readPackageHook?.(opts.manifest, opts.lockfileDir)
+      if (manifest) return manifest
+    }
+
+    return opts.manifest
+  }
+
+  const allDeps = getAllDependenciesFromManifest(await getOverriddenManifest())
   const importerId = getLockfileImporterId(opts.lockfileDir, opts.prefix)
   const currentLockfile = opts.currentLockfile ?? { importers: { [importerId]: {} } }
 
diff --git a/reviewing/outdated/tsconfig.json b/reviewing/outdated/tsconfig.json
index ca2e85c38d..db386bb49f 100644
--- a/reviewing/outdated/tsconfig.json
+++ b/reviewing/outdated/tsconfig.json
@@ -15,6 +15,9 @@
     {
       "path": "../../config/pick-registry-for-package"
     },
+    {
+      "path": "../../hooks/read-package-hook"
+    },
     {
       "path": "../../lockfile/lockfile-file"
     },