diff --git a/common/changes/@typespec/compiler/fix-unsupported-default-location_2023-04-11-17-15.json b/common/changes/@typespec/compiler/fix-unsupported-default-location_2023-04-11-17-15.json
new file mode 100644
index 00000000000..67a64cb01dc
--- /dev/null
+++ b/common/changes/@typespec/compiler/fix-unsupported-default-location_2023-04-11-17-15.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@typespec/compiler",
+      "comment": "**Fix** `unsupported-default` diagnostic showing at the wrong location",
+      "type": "none"
+    }
+  ],
+  "packageName": "@typespec/compiler"
+}
\ No newline at end of file
diff --git a/packages/compiler/core/checker.ts b/packages/compiler/core/checker.ts
index ce5a0f5e944..68b095b3e32 100644
--- a/packages/compiler/core/checker.ts
+++ b/packages/compiler/core/checker.ts
@@ -2978,8 +2978,8 @@ export function createChecker(program: Program): Checker {
       reportCheckerDiagnostic(
         createDiagnostic({
           code: "unsupported-default",
-          format: { type: type.kind },
-          target: defaultType,
+          format: { type: defaultType.kind },
+          target: defaultNode,
         })
       );
       return errorType;
diff --git a/packages/compiler/test/checker/model.test.ts b/packages/compiler/test/checker/model.test.ts
index 376d17f5deb..0f9eda35b52 100644
--- a/packages/compiler/test/checker/model.test.ts
+++ b/packages/compiler/test/checker/model.test.ts
@@ -6,6 +6,7 @@ import {
   createTestHost,
   expectDiagnosticEmpty,
   expectDiagnostics,
+  extractCursor,
   TestHost,
 } from "../../testing/index.js";
 
@@ -149,6 +150,21 @@ describe("compiler: models", () => {
     }
   });
 
+  it(`emit diagnostic when using non value type as default value`, async () => {
+    const { source, pos } = extractCursor(`
+    model Foo<D> {
+      prop?: string = ┆D;
+    }
+    `);
+    testHost.addTypeSpecFile("main.tsp", source);
+    const diagnostics = await testHost.diagnose("main.tsp");
+    expectDiagnostics(diagnostics, {
+      code: "unsupported-default",
+      message: "Default must be have a value type but has type 'TemplateParameter'.",
+      pos,
+    });
+  });
+
   it(`doesn't emit unsupported-default diagnostic when type is an error`, async () => {
     testHost.addTypeSpecFile(
       "main.tsp",