diff -u b/core/config/schema/core.data_types.schema.yml b/core/config/schema/core.data_types.schema.yml
--- b/core/config/schema/core.data_types.schema.yml
+++ b/core/config/schema/core.data_types.schema.yml
@@ -808,6 +808,9 @@
     auto_create_bundle:
       type: string
       label: 'Bundle assigned to the auto-created entities.'
+    allow_self_reference:
+      type: boolean
+      label: 'Allow an entity to reference itself'
 
 # Schema for all entity reference 'default:*' selection handlers that are not
 # providing a specific schema.
@@ -822,9 +825,6 @@
     auto_create_bundle:
       type: string
       label: 'Bundle assigned to the auto-created entities.'
-    allow_self_reference:
-      type: boolean
-      label: 'Allow an entity to reference itself'
 
 # Schema for all entity reference 'default:*' selection handlers that are not
 # providing a specific schema.
reverted:
--- b/core/lib/Drupal/Core/Entity/EntityAutocompleteMatcher.php
+++ a/core/lib/Drupal/Core/Entity/EntityAutocompleteMatcher.php
@@ -39,8 +39,6 @@
    *   An array of settings that will be passed to the selection handler.
    * @param string $string
    *   (optional) The label of the entity to query by.
-   * @param \Drupal\Core\Entity\EntityInterface $host_entity
-   *   (optional) The referencing entity, if any. Defaults to NULL.
    *
    * @return array
    *   An array of matched entity labels, in the format required by the AJAX
@@ -51,13 +49,12 @@
    *
    * @see \Drupal\system\Controller\EntityAutocompleteController
    */
+  public function getMatches($target_type, $selection_handler, $selection_settings, $string = '') {
-  public function getMatches($target_type, $selection_handler, $selection_settings, $string = '', EntityInterface $host_entity = NULL) {
     $matches = [];
 
     $options = $selection_settings + [
       'target_type' => $target_type,
       'handler' => $selection_handler,
-      'entity' => $host_entity,
     ];
     $handler = $this->selectionManager->getInstance($options);
 
diff -u b/core/lib/Drupal/Core/Entity/Plugin/EntityReferenceSelection/DefaultSelection.php b/core/lib/Drupal/Core/Entity/Plugin/EntityReferenceSelection/DefaultSelection.php
--- b/core/lib/Drupal/Core/Entity/Plugin/EntityReferenceSelection/DefaultSelection.php
+++ b/core/lib/Drupal/Core/Entity/Plugin/EntityReferenceSelection/DefaultSelection.php
@@ -4,6 +4,7 @@
 
 use Drupal\Component\Utility\Html;
 use Drupal\Core\Database\Query\AlterableInterface;
+use Drupal\Core\Entity\EntityInterface;
 use Drupal\Core\Entity\EntityManagerInterface;
 use Drupal\Core\Entity\EntityReferenceSelection\SelectionPluginBase;
 use Drupal\Core\Entity\EntityReferenceSelection\SelectionTrait;
@@ -201,7 +202,7 @@
     $form['allow_self_reference'] = [
       '#type' => 'checkbox',
       '#title' => $this->t('Allow an entity to reference itself'),
-      '#default_value' => $selection_handler_settings['allow_self_reference'],
+      '#default_value' => $configuration['allow_self_reference'],
     ];
 
     return $form;
@@ -359,9 +360,18 @@
       $query->condition($label_key, $match, $match_operator);
     }
 
-    // Disallow self-references if possible.
-    if (isset($this->configuration['entity']) && $this->configuration['entity']->id() && isset($handler_settings['allow_self_reference']) && !$handler_settings['allow_self_reference']) {
-      $query->condition($entity_type->getKey('id'), $this->configuration['entity']->id(), '<>');
+    // Disallow references to the referencing entity.
+    $entity = $this->configuration['entity'] ? $this->configuration['entity'] : NULL;
+    if ($entity instanceof EntityInterface) {
+      // To maintain backwards compatibility: if the setting is not set, then
+      // allow referencing self.
+      $allow_self_reference = isset($configuration['handler_settings']['allow_self_reference']) ? !empty($configuration['handler_settings']['allow_self_reference']) : TRUE;
+      if (!$allow_self_reference) {
+        // Referencing entity must be the same entity type as the query.
+        if ($entity->getEntityTypeId() == $entity_type->id()) {
+          $query->condition($entity_type->getKey('id'), $entity->id(), '<>');
+        }
+      }
     }
 
     // Add entity-access tag.
reverted:
--- b/core/lib/Drupal/Core/Field/Plugin/Field/FieldWidget/EntityReferenceAutocompleteWidget.php
+++ a/core/lib/Drupal/Core/Field/Plugin/Field/FieldWidget/EntityReferenceAutocompleteWidget.php
@@ -88,10 +88,7 @@
     $referenced_entities = $items->referencedEntities();
 
     // Append the match operation to the selection settings.
+    $selection_settings = $this->getFieldSetting('handler_settings') + ['match_operator' => $this->getSetting('match_operator')];
-    $selection_settings = $this->getFieldSetting('handler_settings') + [
-      'match_operator' => $this->getSetting('match_operator'),
-      'entity' => $entity,
-    ];
 
     $element += [
       '#type' => 'entity_autocomplete',
reverted:
--- b/core/modules/system/src/Controller/EntityAutocompleteController.php
+++ a/core/modules/system/src/Controller/EntityAutocompleteController.php
@@ -78,7 +78,6 @@
    */
   public function handleAutocomplete(Request $request, $target_type, $selection_handler, $selection_settings_key) {
     $matches = [];
-
     // Get the typed string from the URL, if it exists.
     if ($input = $request->query->get('q')) {
       $typed_string = Tags::explode($input);
@@ -101,12 +100,7 @@
         throw new AccessDeniedHttpException();
       }
 
+      $matches = $this->matcher->getMatches($target_type, $selection_handler, $selection_settings, $typed_string);
-      // The host entity was not passed in the selection settings. Set to NULL.
-      if (empty($selection_settings['entity'])) {
-        $selection_settings['entity'] = NULL;
-      }
-
-      $matches = $this->matcher->getMatches($target_type, $selection_handler, $selection_settings, $typed_string, $selection_settings['entity']);
     }
 
     return new JsonResponse($matches);
reverted:
--- b/core/modules/system/system.routing.yml
+++ a/core/modules/system/system.routing.yml
@@ -501,10 +501,9 @@
     _permission: 'access administration pages'
 
 system.entity_autocomplete:
+  path: '/entity_reference_autocomplete/{target_type}/{selection_handler}/{selection_settings_key}'
-  path: '/entity_reference_autocomplete/{target_type}/{selection_handler}/{selection_settings_key}/{host_entity_id}'
   defaults:
     _controller: '\Drupal\system\Controller\EntityAutocompleteController::handleAutocomplete'
-    host_entity_id: ''
   requirements:
     _access: 'TRUE'
 
diff -u b/core/modules/system/tests/src/Kernel/Entity/EntityReferenceSelectionReferenceableTest.php b/core/modules/system/tests/src/Kernel/Entity/EntityReferenceSelectionReferenceableTest.php
--- b/core/modules/system/tests/src/Kernel/Entity/EntityReferenceSelectionReferenceableTest.php
+++ b/core/modules/system/tests/src/Kernel/Entity/EntityReferenceSelectionReferenceableTest.php
@@ -5,6 +5,7 @@
 use Drupal\Component\Utility\Html;
 use Drupal\Component\Utility\Unicode;
 use Drupal\entity_test\Entity\EntityTest;
+use Drupal\entity_test\Entity\EntityTestNoLabel;
 use Drupal\field\Tests\EntityReference\EntityReferenceTestTrait;
 use Drupal\field\Entity\FieldConfig;
 use Drupal\node\Entity\NodeType;
@@ -54,10 +55,6 @@
     $this->installEntitySchema('entity_test');
     $this->installEntitySchema('entity_test_no_label');
 
-    /** @var \Drupal\Core\Entity\EntityStorageInterface $storage */
-    $storage = $this->container->get('entity.manager')
-      ->getStorage('entity_test_no_label');
-
     // Create a new node-type.
     NodeType::create([
       'type' => $node_type = Unicode::strtolower($this->randomMachineName()),
@@ -73,41 +70,101 @@
 
     // Generate a bundle name to be used with 'entity_test_no_label'.
     $this->bundle = Unicode::strtolower($this->randomMachineName());
-
-    // Create 6 entities to be referenced by the field.
-    foreach (static::$labels as $name) {
-      $storage->create([
-        'id' => Unicode::strtolower($this->randomMachineName()),
-        'name' => $name,
-        'type' => $this->bundle,
-      ])->save();
-    }
   }
 
   /**
    * Tests the 'allow_self_reference' selection handler setting.
+   *
+   * @param $allow_self_reference
+   *   Value for 'allow_self_reference' selection handler setting.
+   * @param $entity_is_referencable
+   *   Assert whether the referencing entity is referencable.
+   *
+   * @dataProvider providerAllowSelfReference
    */
-  public function testAllowSelfReference() {
+  public function testAllowSelfReference($allow_self_reference, $entity_is_referencable) {
     $field_name = 'field_test';
     $this->createEntityReferenceField('entity_test', 'entity_test', $field_name, 'Test entity reference', 'entity_test');
+    $field_config = FieldConfig::loadByName('entity_test', 'entity_test', $field_name);
+    $handler_settings = $field_config->getSetting('handler_settings');
+    $handler_settings['allow_self_reference'] = $allow_self_reference;
+    $field_config
+      ->setSetting('handler_settings', $handler_settings)
+      ->save();
+
+    $entity = EntityTestNoLabel::create(['name' => $this->randomMachineName()]);
+    $entity->save();
+    $other = EntityTest::create(['name' => $this->randomMachineName()]);
+    $other->save();
+
+    $handler = $this->container
+      ->get('plugin.manager.entity_reference_selection')
+      ->getSelectionHandler($field_config, $entity);
+
+    $referenceable = $handler->getReferenceableEntities()['entity_test'];
+    if ($entity_is_referencable) {
+      $this->assertArrayHasKey($entity->id(), $referenceable, 'Can reference entity.');
+    }
+    else {
+      $this->assertArrayNotHasKey($entity->id(), $referenceable, 'Can not reference entity.');
+    }
+    // Other entity is always referencable.
+    $this->assertArrayHasKey($other->id(), $referenceable, 'Can reference other entity.');
+  }
 
-    // Create a test entity and check that it cannot reference itself.
-    $host_entity = EntityTest::create(['name' => $this->randomMachineName()]);
-    $host_entity->save();
+  /**
+   * Data provider for testAllowSelfReference().
+   */
+  public function providerAllowSelfReference() {
+    return [
+      'when setting is omitted, referencing entity is referencable' => [
+        NULL,
+        TRUE,
+      ],
+      'when setting is true, referencing entity is referencable' => [
+        TRUE,
+        TRUE,
+      ],
+      'when setting is false, referencing entity is not referencable' => [
+        FALSE,
+        FALSE,
+      ],
+    ];
+  }
 
+  /**
+   * Tests entities can be referenced despite having the same ID as referencer.
+   *
+   * Ensures that the 'allow_self_reference' selection handler setting does not
+   * attempt to exclude entities that are different entity types.
+   */
+  public function testPreventSelfReferenceDifferentEntityType() {
+    $field_name = 'field_test';
+    $this->createEntityReferenceField('entity_test', 'entity_test', $field_name, 'Test entity reference', 'entity_test');
     $field_config = FieldConfig::loadByName('entity_test', 'entity_test', $field_name);
-    $this->selectionHandler = $this->container->get('plugin.manager.entity_reference_selection')->getSelectionHandler($field_config, $host_entity);
-
-    $referenceables = $this->selectionHandler->getReferenceableEntities();
-    $this->assertTrue(isset($referenceables['entity_test'][$host_entity->id()]));
+    $handler_settings = $field_config->getSetting('handler_settings');
+    $handler_settings['allow_self_reference'] = FALSE;
+    $field_config
+      ->setSetting('handler_settings', $handler_settings)
+      ->save();
+
+    $entity = EntityTestNoLabel::create(['name' => $this->randomMachineName()]);
+    $entity->save();
+    $other = EntityTest::create(['name' => $this->randomMachineName()]);
+    $other->save();
+
+    // The entity type doesn't matter, so long as it is a different type to the
+    // other entity.
+    $this->assertNotEquals($entity->getEntityTypeId(), $other->getEntityTypeId());
+    // This test requires ID's to be the same.
+    $this->assertEquals($entity->id(), $other->id());
+
+    $handler = $this->container
+      ->get('plugin.manager.entity_reference_selection')
+      ->getSelectionHandler($field_config, $entity);
 
-    $selection_setttings = $field_config->getSetting('handler_settings');
-    $selection_setttings['allow_self_reference'] = FALSE;
-    $field_config->setSetting('handler_settings', $selection_setttings)->save();
-
-    $this->selectionHandler = $this->container->get('plugin.manager.entity_reference_selection')->getSelectionHandler($field_config, $host_entity);
-    $referenceables = $this->selectionHandler->getReferenceableEntities();
-    $this->assertTrue(!isset($referenceables['entity_test'][$host_entity->id()]));
+    $referenceable = $handler->getReferenceableEntities()['entity_test'];
+    $this->assertArrayHasKey($entity->id(), $referenceable, 'Can reference entity even though the IDs are the same.');
   }
 
   /**
@@ -130,6 +187,19 @@
    * @dataProvider providerTestCases
    */
   public function testReferenceablesWithNoLabelKey($match, $match_operator, $limit, $count_limited, array $items, $count_all) {
+    /** @var \Drupal\Core\Entity\EntityStorageInterface $storage */
+    $storage = $this->container->get('entity.manager')
+      ->getStorage('entity_test_no_label');
+
+    // Create 6 entities to be referenced by the field.
+    foreach (static::$labels as $name) {
+      $storage->create([
+        'id' => Unicode::strtolower($this->randomMachineName()),
+        'name' => $name,
+        'type' => $this->bundle,
+      ])->save();
+    }
+
     // Test ::getReferenceableEntities().
     $referenceables = $this->selectionHandler->getReferenceableEntities($match, $match_operator, $limit);