diff --git a/sqlglot/dialects/tsql.py b/sqlglot/dialects/tsql.py
index aefe625b..a555f5c4 100644
--- a/sqlglot/dialects/tsql.py
+++ b/sqlglot/dialects/tsql.py
@@ -730,6 +730,17 @@ class TSQL(Dialect):
             exp.VolatileProperty: exp.Properties.Location.UNSUPPORTED,
         }
 
+        def lateral_op(self, expression: exp.Lateral) -> str:
+            cross_apply = expression.args.get("cross_apply")
+            if cross_apply is True:
+                return "CROSS APPLY"
+            if cross_apply is False:
+                return "OUTER APPLY"
+
+            # TODO: perhaps we can check if the parent is a Join and transpile it appropriately
+            self.unsupported("LATERAL clause is not supported.")
+            return "LATERAL"
+
         def timefromparts_sql(self, expression: exp.TimeFromParts) -> str:
             nano = expression.args.get("nano")
             if nano is not None:
diff --git a/sqlglot/expressions.py b/sqlglot/expressions.py
index 56580dcf..9609c332 100644
--- a/sqlglot/expressions.py
+++ b/sqlglot/expressions.py
@@ -1925,7 +1925,13 @@ class Join(Expression):
 
 
 class Lateral(UDTF):
-    arg_types = {"this": True, "view": False, "outer": False, "alias": False}
+    arg_types = {
+        "this": True,
+        "view": False,
+        "outer": False,
+        "alias": False,
+        "cross_apply": False,  # True -> CROSS APPLY, False -> OUTER APPLY
+    }
 
 
 class MatchRecognize(Expression):
diff --git a/sqlglot/generator.py b/sqlglot/generator.py
index c9adb835..98337fc6 100644
--- a/sqlglot/generator.py
+++ b/sqlglot/generator.py
@@ -1686,7 +1686,8 @@ class Generator:
         if not on_sql and using:
             on_sql = csv(*(self.sql(column) for column in using))
 
-        this_sql = self.sql(expression, "this")
+        this = expression.this
+        this_sql = self.sql(this)
 
         if on_sql:
             on_sql = self.indent(on_sql, skip_first=True)
@@ -1696,6 +1697,9 @@ class Generator:
             else:
                 on_sql = f"{space}ON {on_sql}"
         elif not op_sql:
+            if isinstance(this, exp.Lateral) and this.args.get("cross_apply") is not None:
+                return f" {this_sql}"
+
             return f", {this_sql}"
 
         op_sql = f"{op_sql} JOIN" if op_sql else "JOIN"
@@ -1706,6 +1710,19 @@ class Generator:
         args = f"({args})" if len(args.split(",")) > 1 else args
         return f"{args} {arrow_sep} {self.sql(expression, 'this')}"
 
+    def lateral_op(self, expression: exp.Lateral) -> str:
+        cross_apply = expression.args.get("cross_apply")
+
+        # https://www.mssqltips.com/sqlservertip/1958/sql-server-cross-apply-and-outer-apply/
+        if cross_apply is True:
+            op = "INNER JOIN "
+        elif cross_apply is False:
+            op = "LEFT JOIN "
+        else:
+            op = ""
+
+        return f"{op}LATERAL"
+
     def lateral_sql(self, expression: exp.Lateral) -> str:
         this = self.sql(expression, "this")
 
@@ -1719,7 +1736,7 @@ class Generator:
 
         alias = self.sql(expression, "alias")
         alias = f" AS {alias}" if alias else ""
-        return f"LATERAL {this}{alias}"
+        return f"{self.lateral_op(expression)} {this}{alias}"
 
     def limit_sql(self, expression: exp.Limit, top: bool = False) -> str:
         this = self.sql(expression, "this")
diff --git a/sqlglot/parser.py b/sqlglot/parser.py
index 89577cd5..40a71da5 100644
--- a/sqlglot/parser.py
+++ b/sqlglot/parser.py
@@ -2493,13 +2493,14 @@ class Parser(metaclass=_Parser):
         )
 
     def _parse_lateral(self) -> t.Optional[exp.Lateral]:
-        outer_apply = self._match_pair(TokenType.OUTER, TokenType.APPLY)
         cross_apply = self._match_pair(TokenType.CROSS, TokenType.APPLY)
+        if not cross_apply and self._match_pair(TokenType.OUTER, TokenType.APPLY):
+            cross_apply = False
 
-        if outer_apply or cross_apply:
+        if cross_apply is not None:
             this = self._parse_select(table=True)
             view = None
-            outer = not cross_apply
+            outer = None
         elif self._match(TokenType.LATERAL):
             this = self._parse_select(table=True)
             view = self._match(TokenType.VIEW)
@@ -2532,7 +2533,14 @@ class Parser(metaclass=_Parser):
         else:
             table_alias = self._parse_table_alias()
 
-        return self.expression(exp.Lateral, this=this, view=view, outer=outer, alias=table_alias)
+        return self.expression(
+            exp.Lateral,
+            this=this,
+            view=view,
+            outer=outer,
+            alias=table_alias,
+            cross_apply=cross_apply,
+        )
 
     def _parse_join_parts(
         self,
@@ -2566,9 +2574,6 @@ class Parser(metaclass=_Parser):
         if not skip_join_token and not join and not outer_apply and not cross_apply:
             return None
 
-        if outer_apply:
-            side = Token(TokenType.LEFT, "LEFT")
-
         kwargs: t.Dict[str, t.Any] = {"this": self._parse_table(parse_bracket=parse_bracket)}
 
         if method:

diff --git a/tests/dialects/test_tsql.py b/tests/dialects/test_tsql.py
index e9c0a84d..fde88d70 100644
--- a/tests/dialects/test_tsql.py
+++ b/tests/dialects/test_tsql.py
@@ -1247,39 +1247,45 @@ WHERE
         self.validate_all(
             "SELECT x.a, x.b, t.v, t.y FROM x CROSS APPLY (SELECT v, y FROM t) t(v, y)",
             write={
-                "spark": "SELECT x.a, x.b, t.v, t.y FROM x, LATERAL (SELECT v, y FROM t) AS t(v, y)",
+                "spark": "SELECT x.a, x.b, t.v, t.y FROM x INNER JOIN LATERAL (SELECT v, y FROM t) AS t(v, y)",
+                "tsql": "SELECT x.a, x.b, t.v, t.y FROM x CROSS APPLY (SELECT v, y FROM t) AS t(v, y)",
             },
         )
         self.validate_all(
             "SELECT x.a, x.b, t.v, t.y FROM x OUTER APPLY (SELECT v, y FROM t) t(v, y)",
             write={
                 "spark": "SELECT x.a, x.b, t.v, t.y FROM x LEFT JOIN LATERAL (SELECT v, y FROM t) AS t(v, y)",
+                "tsql": "SELECT x.a, x.b, t.v, t.y FROM x OUTER APPLY (SELECT v, y FROM t) AS t(v, y)",
             },
         )
         self.validate_all(
             "SELECT x.a, x.b, t.v, t.y, s.v, s.y FROM x OUTER APPLY (SELECT v, y FROM t) t(v, y) OUTER APPLY (SELECT v, y FROM t) s(v, y) LEFT JOIN z ON z.id = s.id",
             write={
                 "spark": "SELECT x.a, x.b, t.v, t.y, s.v, s.y FROM x LEFT JOIN LATERAL (SELECT v, y FROM t) AS t(v, y) LEFT JOIN LATERAL (SELECT v, y FROM t) AS s(v, y) LEFT JOIN z ON z.id = s.id",
+                "tsql": "SELECT x.a, x.b, t.v, t.y, s.v, s.y FROM x OUTER APPLY (SELECT v, y FROM t) AS t(v, y) OUTER APPLY (SELECT v, y FROM t) AS s(v, y) LEFT JOIN z ON z.id = s.id",
             },
         )
 
     def test_lateral_table_valued_function(self):
         self.validate_all(
-            "SELECT t.x, y.z FROM x CROSS APPLY tvfTest(t.x)y(z)",
+            "SELECT t.x, y.z FROM x CROSS APPLY tvfTest(t.x) y(z)",
             write={
-                "spark": "SELECT t.x, y.z FROM x, LATERAL TVFTEST(t.x) AS y(z)",
+                "spark": "SELECT t.x, y.z FROM x INNER JOIN LATERAL TVFTEST(t.x) AS y(z)",
+                "tsql": "SELECT t.x, y.z FROM x CROSS APPLY TVFTEST(t.x) AS y(z)",
             },
         )
         self.validate_all(
             "SELECT t.x, y.z FROM x OUTER APPLY tvfTest(t.x)y(z)",
             write={
                 "spark": "SELECT t.x, y.z FROM x LEFT JOIN LATERAL TVFTEST(t.x) AS y(z)",
+                "tsql": "SELECT t.x, y.z FROM x OUTER APPLY TVFTEST(t.x) AS y(z)",
             },
         )
         self.validate_all(
             "SELECT t.x, y.z FROM x OUTER APPLY a.b.tvfTest(t.x)y(z)",
             write={
                 "spark": "SELECT t.x, y.z FROM x LEFT JOIN LATERAL a.b.TVFTEST(t.x) AS y(z)",
+                "tsql": "SELECT t.x, y.z FROM x OUTER APPLY a.b.TVFTEST(t.x) AS y(z)",
             },
         )
 

CROSS APPLY is changed to LATERAL (tsql)
Code to reproduce:
```
import sqlglot

input_sql = """
SELECT
    sd1.id,
    sd1.item_id,
    sd1.ds,
FROM
    sqlmesh_example.seed_model AS sd1
CROSS APPLY (
    SELECT TOP 1
        sd2.id
    FROM
        sqlmesh_example.seed_model AS sd2
    WHERE sd1.id = sd2.id
)
"""

sqlglot.transpile(input_sql, read="tsql")
```

Code output:
`'SELECT sd1.id, sd1.item_id, sd1.ds FROM sqlmesh_example.seed_model AS sd1, LATERAL (SELECT TOP 1 sd2.id FROM sqlmesh_example.seed_model AS sd2 WHERE sd1.id = 
sd2.id)`

Error when executing query - coming from inner-select inside parenthases:
`SQL Error [156] [S0001]: Incorrect syntax near the keyword 'SELECT'.`

While LATERAL is reserved in tsql, there is no functional use. I would expect that CROSS APPLY would stay CROSS APPLY when transpiling back to tsql or when transpiling inner LATERAL joins from other dialects to tsql.
tests/dialects/test_tsql.py::TestTSQL::test_lateral_subquery tests/dialects/test_tsql.py::TestTSQL::test_lateral_table_valued_function
tests/dialects/test_tsql.py::TestTSQL::test__types_ints tests/dialects/test_tsql.py::TestTSQL::test_add_date tests/dialects/test_tsql.py::TestTSQL::test_charindex tests/dialects/test_tsql.py::TestTSQL::test_commit tests/dialects/test_tsql.py::TestTSQL::test_convert_date_format tests/dialects/test_tsql.py::TestTSQL::test_current_user tests/dialects/test_tsql.py::TestTSQL::test_date_diff tests/dialects/test_tsql.py::TestTSQL::test_datefromparts tests/dialects/test_tsql.py::TestTSQL::test_datename tests/dialects/test_tsql.py::TestTSQL::test_datepart tests/dialects/test_tsql.py::TestTSQL::test_ddl tests/dialects/test_tsql.py::TestTSQL::test_eomonth tests/dialects/test_tsql.py::TestTSQL::test_format tests/dialects/test_tsql.py::TestTSQL::test_fullproc tests/dialects/test_tsql.py::TestTSQL::test_hints tests/dialects/test_tsql.py::TestTSQL::test_identifier_prefixes tests/dialects/test_tsql.py::TestTSQL::test_iif tests/dialects/test_tsql.py::TestTSQL::test_insert_cte tests/dialects/test_tsql.py::TestTSQL::test_isnull tests/dialects/test_tsql.py::TestTSQL::test_jsonvalue tests/dialects/test_tsql.py::TestTSQL::test_len tests/dialects/test_tsql.py::TestTSQL::test_openjson tests/dialects/test_tsql.py::TestTSQL::test_procedure_keywords tests/dialects/test_tsql.py::TestTSQL::test_qualify_derived_table_outputs tests/dialects/test_tsql.py::TestTSQL::test_replicate tests/dialects/test_tsql.py::TestTSQL::test_rollback tests/dialects/test_tsql.py::TestTSQL::test_set tests/dialects/test_tsql.py::TestTSQL::test_string tests/dialects/test_tsql.py::TestTSQL::test_system_time tests/dialects/test_tsql.py::TestTSQL::test_temp_table tests/dialects/test_tsql.py::TestTSQL::test_temporal_table tests/dialects/test_tsql.py::TestTSQL::test_top tests/dialects/test_tsql.py::TestTSQL::test_transaction tests/dialects/test_tsql.py::TestTSQL::test_tsql tests/dialects/test_tsql.py::TestTSQL::test_types tests/dialects/test_tsql.py::TestTSQL::test_types_bin tests/dialects/test_tsql.py::TestTSQL::test_types_date tests/dialects/test_tsql.py::TestTSQL::test_types_decimals tests/dialects/test_tsql.py::TestTSQL::test_types_string tests/dialects/test_tsql.py::TestTSQL::test_udf