Publishing an npm package with private pnpm monorepo dependencies involves navigating a complex setup, as outlined by software engineer Vadim Korolik from highlight.io. A monorepo is a code repository that stores multiple distinct projects side by side, allowing packages to use one another directly without external syncing. The process includes using yarn v3 workspaces for organizing JavaScript and TypeScript packages, enabling seamless local package references that mimic npm imports. Challenges arise when private packages, like the internal client library at highlight.io, must be referenced without being publicly published, which can lead to large bundle sizes in the npm package. The solution involves using relative path imports and code splitting to manage bundle size efficiently. Additionally, transitioning from yarn to pnpm requires configuration updates such as adjusting tsconfig.json and setting up pnpm-workspace.yaml. The guide also highlights the importance of automating build processes with tools like turborepo or Nx to streamline package bundling for production.