diff --git a/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateNoDerivedComputationsInEffects.ts b/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateNoDerivedComputationsInEffects.ts
index 44e65063ec..3b5b70df13 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateNoDerivedComputationsInEffects.ts
+++ b/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateNoDerivedComputationsInEffects.ts
@@ -5,7 +5,7 @@
  * LICENSE file in the root directory of this source tree.
  */
 
-import {CompilerError, Effect} from '..';
+import {CompilerDiagnostic, CompilerError, Effect} from '..';
 import {ErrorCategory} from '../CompilerError';
 import {
   BlockId,
@@ -18,6 +18,9 @@ import {
   CallExpression,
   Instruction,
   isUseStateType,
+  isUseRefType,
+  GeneratedSource,
+  SourceLocation,
 } from '../HIR';
 import {eachInstructionLValue, eachInstructionOperand} from '../HIR/visitors';
 import {isMutable} from '../ReactiveScopes/InferReactiveScopeVariables';
@@ -58,6 +61,10 @@ export function validateNoDerivedComputationsInEffects(fn: HIRFunction): void {
   const functions: Map<IdentifierId, FunctionExpression> = new Map();
 
   const derivationCache: Map<IdentifierId, DerivationMetadata> = new Map();
+  const setStateCache: Map<string | undefined | null, Array<Place>> = new Map();
+
+  const effects: Array<HIRFunction> = [];
+
   if (fn.fnType === 'Hook') {
     for (const param of fn.params) {
       if (param.kind === 'Identifier') {
@@ -126,11 +133,7 @@ export function validateNoDerivedComputationsInEffects(fn: HIRFunction): void {
           ) {
             const effectFunction = functions.get(value.args[0].identifier.id);
             if (effectFunction != null) {
-              validateEffect(
-                effectFunction.loweredFunc.func,
-                errors,
-                derivationCache,
-              );
+              effects.push(effectFunction.loweredFunc.func);
             }
           } else if (isUseStateType(lvalue.identifier)) {
             const stateValueSource = value.args[0];
@@ -142,6 +145,25 @@ export function validateNoDerivedComputationsInEffects(fn: HIRFunction): void {
         }
 
         for (const operand of eachInstructionOperand(instr)) {
+          // Record setState usages everywhere
+          switch (instr.value.kind) {
+            case 'JsxExpression':
+            case 'CallExpression':
+            case 'MethodCall':
+              if (
+                isSetStateType(operand.identifier) &&
+                operand.loc !== GeneratedSource
+              ) {
+                if (setStateCache.has(operand.loc.identifierName)) {
+                  setStateCache.get(operand.loc.identifierName)!.push(operand);
+                } else {
+                  setStateCache.set(operand.loc.identifierName, [operand]);
+                }
+              }
+              break;
+            default:
+          }
+
           const operandMetadata = derivationCache.get(operand.identifier.id);
 
           if (operandMetadata === undefined) {
@@ -210,6 +232,10 @@ export function validateNoDerivedComputationsInEffects(fn: HIRFunction): void {
     }
   }
 
+  for (const effect of effects) {
+    validateEffect(effect, errors, derivationCache, setStateCache);
+  }
+
   if (errors.hasAnyErrors()) {
     throw errors;
   }
@@ -267,14 +293,22 @@ function validateEffect(
   effectFunction: HIRFunction,
   errors: CompilerError,
   derivationCache: Map<IdentifierId, DerivationMetadata>,
+  setStateCache: Map<string | undefined | null, Array<Place>>,
 ): void {
+  const effectSetStateCache: Map<
+    string | undefined | null,
+    Array<Place>
+  > = new Map();
   const seenBlocks: Set<BlockId> = new Set();
 
   const effectDerivedSetStateCalls: Array<{
     value: CallExpression;
+    loc: SourceLocation;
     sourceIds: Set<IdentifierId>;
+    typeOfValue: TypeOfValue;
   }> = [];
 
+  const globals: Set<IdentifierId> = new Set();
   for (const block of effectFunction.body.blocks.values()) {
     for (const pred of block.preds) {
       if (!seenBlocks.has(pred)) {
@@ -284,6 +318,33 @@ function validateEffect(
     }
 
     for (const instr of block.instructions) {
+      // Early return if any instruction is deriving a value from a ref
+      if (isUseRefType(instr.lvalue.identifier)) {
+        return;
+      }
+
+      for (const operand of eachInstructionOperand(instr)) {
+        switch (instr.value.kind) {
+          case 'JsxExpression':
+          case 'CallExpression':
+          case 'MethodCall':
+            if (
+              isSetStateType(operand.identifier) &&
+              operand.loc !== GeneratedSource
+            ) {
+              if (effectSetStateCache.has(operand.loc.identifierName)) {
+                effectSetStateCache
+                  .get(operand.loc.identifierName)!
+                  .push(operand);
+              } else {
+                effectSetStateCache.set(operand.loc.identifierName, [operand]);
+              }
+            }
+            break;
+          default:
+        }
+      }
+
       if (
         instr.value.kind === 'CallExpression' &&
         isSetStateType(instr.value.callee.identifier) &&
@@ -297,22 +358,78 @@ function validateEffect(
         if (argMetadata !== undefined) {
           effectDerivedSetStateCalls.push({
             value: instr.value,
+            loc: instr.value.callee.loc,
             sourceIds: argMetadata.sourcesIds,
+            typeOfValue: argMetadata.typeOfValue,
           });
         }
+      } else if (instr.value.kind === 'CallExpression') {
+        const calleeMetadata = derivationCache.get(
+          instr.value.callee.identifier.id,
+        );
+
+        if (
+          calleeMetadata !== undefined &&
+          (calleeMetadata.typeOfValue === 'fromProps' ||
+            calleeMetadata.typeOfValue === 'fromPropsAndState')
+        ) {
+          // If the callee is a prop we can't confidently say that it should be derived in render
+          return;
+        }
+
+        if (globals.has(instr.value.callee.identifier.id)) {
+          // If the callee is a global we can't confidently say that it should be derived in render
+          return;
+        }
+      } else if (instr.value.kind === 'LoadGlobal') {
+        globals.add(instr.lvalue.identifier.id);
+        for (const operand of eachInstructionOperand(instr)) {
+          globals.add(operand.identifier.id);
+        }
       }
     }
     seenBlocks.add(block.id);
   }
 
   for (const derivedSetStateCall of effectDerivedSetStateCalls) {
-    errors.push({
-      category: ErrorCategory.EffectDerivationsOfState,
-      reason:
-        'Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)',
-      description: null,
-      loc: derivedSetStateCall.value.loc,
-      suggestions: null,
-    });
+    if (
+      derivedSetStateCall.loc !== GeneratedSource &&
+      effectSetStateCache.has(derivedSetStateCall.loc.identifierName) &&
+      setStateCache.has(derivedSetStateCall.loc.identifierName) &&
+      effectSetStateCache.get(derivedSetStateCall.loc.identifierName)!
+        .length ===
+        setStateCache.get(derivedSetStateCall.loc.identifierName)!.length
+    ) {
+      const derivedDepsStr = Array.from(derivedSetStateCall.sourceIds)
+        .map(sourceId => {
+          const sourceMetadata = derivationCache.get(sourceId);
+          return sourceMetadata?.place.identifier.name?.value;
+        })
+        .filter(Boolean)
+        .join(', ');
+
+      let description;
+
+      if (derivedSetStateCall.typeOfValue === 'fromProps') {
+        description = `From props: [${derivedDepsStr}]`;
+      } else if (derivedSetStateCall.typeOfValue === 'fromState') {
+        description = `From local state: [${derivedDepsStr}]`;
+      } else {
+        description = `From props and local state: [${derivedDepsStr}]`;
+      }
+
+      errors.pushDiagnostic(
+        CompilerDiagnostic.create({
+          description: `Derived values (${description}) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user`,
+          category: ErrorCategory.EffectDerivationsOfState,
+          reason:
+            'You might not need an effect. Derive values in render, not effects.',
+        }).withDetails({
+          kind: 'error',
+          loc: derivedSetStateCall.value.loc,
+          message: 'This should be computed during render, not in an effect',
+        }),
+      );
+    }
   }
 }
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-call-outside-effect-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-call-outside-effect-no-error.expect.md
new file mode 100644
index 0000000000..5d8aab0679
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-call-outside-effect-no-error.expect.md
@@ -0,0 +1,88 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({initialName}) {
+  const [name, setName] = useState('');
+
+  useEffect(() => {
+    setName(initialName);
+  }, [initialName]);
+
+  return (
+    <div>
+      // 🟡 If the is also called outside of the effect, it's still wrong but
+      // should be solved by hoisting state
+      <input value={name} onChange={e => setName(e.target.value)} />
+    </div>
+  );
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{initialName: 'John'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+function Component(t0) {
+  const $ = _c(6);
+  const { initialName } = t0;
+  const [name, setName] = useState("");
+  let t1;
+  let t2;
+  if ($[0] !== initialName) {
+    t1 = () => {
+      setName(initialName);
+    };
+    t2 = [initialName];
+    $[0] = initialName;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] === Symbol.for("react.memo_cache_sentinel")) {
+    t3 = (e) => setName(e.target.value);
+    $[3] = t3;
+  } else {
+    t3 = $[3];
+  }
+  let t4;
+  if ($[4] !== name) {
+    t4 = (
+      <div>
+        // 🟡 If the is also called outside of the effect, it's still wrong but
+        // should be solved by hoisting state
+        <input value={name} onChange={t3} />
+      </div>
+    );
+    $[4] = name;
+    $[5] = t4;
+  } else {
+    t4 = $[5];
+  }
+  return t4;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ initialName: "John" }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>// 🟡 If the is also called outside of the effect, it's still wrong but // should be solved by hoisting state<input value="John"></div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-call-outside-effect-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-call-outside-effect-no-error.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-call-outside-effect-no-error.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-call-outside-effect-no-error.js
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-used-outside-effect-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-used-outside-effect-no-error.expect.md
new file mode 100644
index 0000000000..57aee86a69
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-used-outside-effect-no-error.expect.md
@@ -0,0 +1,85 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function MockComponent({onSet}) {
+  return <div onClick={() => onSet('clicked')}>Mock Component</div>;
+}
+
+function Component({propValue}) {
+  const [value, setValue] = useState(null);
+  useEffect(() => {
+    setValue(propValue);
+  }, [propValue]);
+
+  return <MockComponent onSet={setValue} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{propValue: 'test'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+function MockComponent(t0) {
+  const $ = _c(2);
+  const { onSet } = t0;
+  let t1;
+  if ($[0] !== onSet) {
+    t1 = <div onClick={() => onSet("clicked")}>Mock Component</div>;
+    $[0] = onSet;
+    $[1] = t1;
+  } else {
+    t1 = $[1];
+  }
+  return t1;
+}
+
+function Component(t0) {
+  const $ = _c(4);
+  const { propValue } = t0;
+  const [, setValue] = useState(null);
+  let t1;
+  let t2;
+  if ($[0] !== propValue) {
+    t1 = () => {
+      setValue(propValue);
+    };
+    t2 = [propValue];
+    $[0] = propValue;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] === Symbol.for("react.memo_cache_sentinel")) {
+    t3 = <MockComponent onSet={setValue} />;
+    $[3] = t3;
+  } else {
+    t3 = $[3];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ propValue: "test" }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>Mock Component</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-used-outside-effect-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-used-outside-effect-no-error.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-used-outside-effect-no-error.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-setter-used-outside-effect-no-error.js
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-ref-and-state-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-ref-and-state-no-error.expect.md
new file mode 100644
index 0000000000..1bb5e18626
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-ref-and-state-no-error.expect.md
@@ -0,0 +1,73 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState, useRef} from 'react';
+
+export default function Component({test}) {
+  const [local, setLocal] = useState('');
+
+  const myRef = useRef(null);
+
+  useEffect(() => {
+    setLocal(myRef.current + test);
+  }, [test]);
+
+  return <>{local}</>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{test: 'testString'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState, useRef } from "react";
+
+export default function Component(t0) {
+  const $ = _c(5);
+  const { test } = t0;
+  const [local, setLocal] = useState("");
+
+  const myRef = useRef(null);
+  let t1;
+  let t2;
+  if ($[0] !== test) {
+    t1 = () => {
+      setLocal(myRef.current + test);
+    };
+    t2 = [test];
+    $[0] = test;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] !== local) {
+    t3 = <>{local}</>;
+    $[3] = local;
+    $[4] = t3;
+  } else {
+    t3 = $[4];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ test: "testString" }],
+};
+
+```
+      
+### Eval output
+(kind: ok) nulltestString
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-ref-and-state-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-ref-and-state-no-error.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-ref-and-state-no-error.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-ref-and-state-no-error.js
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-prop-function-call-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-prop-function-call-no-error.expect.md
new file mode 100644
index 0000000000..afae2c20a6
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-prop-function-call-no-error.expect.md
@@ -0,0 +1,75 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({propValue, onChange}) {
+  const [value, setValue] = useState(null);
+  useEffect(() => {
+    setValue(propValue);
+    onChange();
+  }, [propValue]);
+
+  return <div>{value}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{propValue: 'test', onChange: () => {}}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+function Component(t0) {
+  const $ = _c(7);
+  const { propValue, onChange } = t0;
+  const [value, setValue] = useState(null);
+  let t1;
+  if ($[0] !== onChange || $[1] !== propValue) {
+    t1 = () => {
+      setValue(propValue);
+      onChange();
+    };
+    $[0] = onChange;
+    $[1] = propValue;
+    $[2] = t1;
+  } else {
+    t1 = $[2];
+  }
+  let t2;
+  if ($[3] !== propValue) {
+    t2 = [propValue];
+    $[3] = propValue;
+    $[4] = t2;
+  } else {
+    t2 = $[4];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[5] !== value) {
+    t3 = <div>{value}</div>;
+    $[5] = value;
+    $[6] = t3;
+  } else {
+    t3 = $[6];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ propValue: "test", onChange: () => {} }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>test</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-prop-function-call-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-prop-function-call-no-error.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-prop-function-call-no-error.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-prop-function-call-no-error.js
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-with-global-function-call-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-with-global-function-call-no-error.expect.md
new file mode 100644
index 0000000000..6d3de1cf6f
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-with-global-function-call-no-error.expect.md
@@ -0,0 +1,70 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({propValue}) {
+  const [value, setValue] = useState(null);
+  useEffect(() => {
+    setValue(propValue);
+    globalCall();
+  }, [propValue]);
+
+  return <div>{value}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{propValue: 'test'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+function Component(t0) {
+  const $ = _c(5);
+  const { propValue } = t0;
+  const [value, setValue] = useState(null);
+  let t1;
+  let t2;
+  if ($[0] !== propValue) {
+    t1 = () => {
+      setValue(propValue);
+      globalCall();
+    };
+    t2 = [propValue];
+    $[0] = propValue;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] !== value) {
+    t3 = <div>{value}</div>;
+    $[3] = value;
+    $[4] = t3;
+  } else {
+    t3 = $[4];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ propValue: "test" }],
+};
+
+```
+      
+### Eval output
+(kind: exception) globalCall is not defined
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-with-global-function-call-no-error.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-with-global-function-call-no-error.js
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-conditionally-in-effect.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-conditionally-in-effect.expect.md
index 24df0001ab..48a9429f19 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-conditionally-in-effect.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-conditionally-in-effect.expect.md
@@ -32,13 +32,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props: [value]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.derived-state-conditionally-in-effect.ts:9:6
    7 |   useEffect(() => {
    8 |     if (enabled) {
 >  9 |       setLocalValue(value);
-     |       ^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |       ^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
   10 |     } else {
   11 |       setLocalValue('disabled');
   12 |     }
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-default-props.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-default-props.expect.md
index d374888897..5c166cdbcb 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-default-props.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-default-props.expect.md
@@ -28,13 +28,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props: [input]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.derived-state-from-default-props.ts:8:4
    6 |
    7 |   useEffect(() => {
 >  8 |     setCurrInput(input + localConst);
-     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
    9 |   }, [input, localConst]);
   10 |
   11 |   return <div>{currInput}</div>;
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-local-state-and-component-scope.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-local-state-and-component-scope.expect.md
index ca7695e2ea..3f6e56c35d 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-local-state-and-component-scope.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-local-state-and-component-scope.expect.md
@@ -36,13 +36,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props and local state: [firstName]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.derived-state-from-prop-local-state-and-component-scope.ts:11:4
    9 |
   10 |   useEffect(() => {
 > 11 |     setFullName(firstName + ' ' + middleName + ' ' + lastName);
-     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
   12 |   }, [firstName, middleName, lastName]);
   13 |
   14 |   return (
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-call-outside-effect-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-call-outside-effect-no-error.expect.md
deleted file mode 100644
index 5cc82027de..0000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-call-outside-effect-no-error.expect.md
+++ /dev/null
@@ -1,49 +0,0 @@
-
-## Input
-
-```javascript
-// @validateNoDerivedComputationsInEffects
-import {useEffect, useState} from 'react';
-
-function Component({initialName}) {
-  const [name, setName] = useState('');
-
-  useEffect(() => {
-    setName(initialName);
-  }, [initialName]);
-
-  return (
-    <div>
-      // 🟡 If the is also called outside of the effect, it's still wrong but
-      // should be solved by hoisting state
-      <input value={name} onChange={e => setName(e.target.value)} />
-    </div>
-  );
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [{initialName: 'John'}],
-};
-
-```
-
-
-## Error
-
-```
-Found 1 error:
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.derived-state-from-prop-setter-call-outside-effect-no-error.ts:8:4
-   6 |
-   7 |   useEffect(() => {
->  8 |     setName(initialName);
-     |     ^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-   9 |   }, [initialName]);
-  10 |
-  11 |   return (
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-used-outside-effect-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-used-outside-effect-no-error.expect.md
deleted file mode 100644
index 34f2384f03..0000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-setter-used-outside-effect-no-error.expect.md
+++ /dev/null
@@ -1,46 +0,0 @@
-
-## Input
-
-```javascript
-// @validateNoDerivedComputationsInEffects
-import {useEffect, useState} from 'react';
-
-function MockComponent({onSet}) {
-  return <div onClick={() => onSet('clicked')}>Mock Component</div>;
-}
-
-function Component({propValue}) {
-  const [value, setValue] = useState(null);
-  useEffect(() => {
-    setValue(propValue);
-  }, [propValue]);
-
-  return <MockComponent onSet={setValue} />;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [{propValue: 'test'}],
-};
-
-```
-
-
-## Error
-
-```
-Found 1 error:
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.derived-state-from-prop-setter-used-outside-effect-no-error.ts:11:4
-   9 |   const [value, setValue] = useState(null);
-  10 |   useEffect(() => {
-> 11 |     setValue(propValue);
-     |     ^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-  12 |   }, [propValue]);
-  13 |
-  14 |   return <MockComponent onSet={setValue} />;
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-with-side-effect.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-with-side-effect.expect.md
index fc06bdeb37..4988bb2630 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-with-side-effect.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-prop-with-side-effect.expect.md
@@ -28,13 +28,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props: [value]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.derived-state-from-prop-with-side-effect.ts:7:4
    5 |
    6 |   useEffect(() => {
 >  7 |     setLocalValue(value);
-     |     ^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
    8 |     document.title = `Value: ${value}`;
    9 |   }, [value]);
   10 |
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-ref-and-state-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-ref-and-state-no-error.expect.md
deleted file mode 100644
index 9f5783d41a..0000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.derived-state-from-ref-and-state-no-error.expect.md
+++ /dev/null
@@ -1,45 +0,0 @@
-
-## Input
-
-```javascript
-// @validateNoDerivedComputationsInEffects
-import {useEffect, useState, useRef} from 'react';
-
-export default function Component({test}) {
-  const [local, setLocal] = useState('');
-
-  const myRef = useRef(null);
-
-  useEffect(() => {
-    setLocal(myRef.current + test);
-  }, [test]);
-
-  return <>{local}</>;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [{test: 'testString'}],
-};
-
-```
-
-
-## Error
-
-```
-Found 1 error:
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.derived-state-from-ref-and-state-no-error.ts:10:4
-   8 |
-   9 |   useEffect(() => {
-> 10 |     setLocal(myRef.current + test);
-     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-  11 |   }, [test]);
-  12 |
-  13 |   return <>{local}</>;
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-local-function-call.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-local-function-call.expect.md
index 7dc6a0ffcd..c2c81bd8ac 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-local-function-call.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-local-function-call.expect.md
@@ -33,13 +33,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props: [propValue]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.effect-contains-local-function-call.ts:12:4
   10 |
   11 |   useEffect(() => {
 > 12 |     setValue(propValue);
-     |     ^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
   13 |     localFunction();
   14 |   }, [propValue]);
   15 |
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-prop-function-call-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-prop-function-call-no-error.expect.md
deleted file mode 100644
index 31b7114af5..0000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-contains-prop-function-call-no-error.expect.md
+++ /dev/null
@@ -1,43 +0,0 @@
-
-## Input
-
-```javascript
-// @validateNoDerivedComputationsInEffects
-import {useEffect, useState} from 'react';
-
-function Component({propValue, onChange}) {
-  const [value, setValue] = useState(null);
-  useEffect(() => {
-    setValue(propValue);
-    onChange();
-  }, [propValue]);
-
-  return <div>{value}</div>;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [{propValue: 'test', onChange: () => {}}],
-};
-
-```
-
-
-## Error
-
-```
-Found 1 error:
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.effect-contains-prop-function-call-no-error.ts:7:4
-   5 |   const [value, setValue] = useState(null);
-   6 |   useEffect(() => {
->  7 |     setValue(propValue);
-     |     ^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-   8 |     onChange();
-   9 |   }, [propValue]);
-  10 |
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.expect.md
deleted file mode 100644
index 8115bb162b..0000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.expect.md
+++ /dev/null
@@ -1,43 +0,0 @@
-
-## Input
-
-```javascript
-// @validateNoDerivedComputationsInEffects
-import {useEffect, useState} from 'react';
-
-function Component({propValue}) {
-  const [value, setValue] = useState(null);
-  useEffect(() => {
-    setValue(propValue);
-    globalCall();
-  }, [propValue]);
-
-  return <div>{value}</div>;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [{propValue: 'test'}],
-};
-
-```
-
-
-## Error
-
-```
-Found 1 error:
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.effect-with-global-function-call-no-error.ts:7:4
-   5 |   const [value, setValue] = useState(null);
-   6 |   useEffect(() => {
->  7 |     setValue(propValue);
-     |     ^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-   8 |     globalCall();
-   9 |   }, [propValue]);
-  10 |
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-computation-in-effect.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-computation-in-effect.expect.md
index 5e9efc3a33..279d7d7a3a 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-computation-in-effect.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-computation-in-effect.expect.md
@@ -29,13 +29,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From local state: []) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.invalid-derived-computation-in-effect.ts:9:4
    7 |   const [fullName, setFullName] = useState('');
    8 |   useEffect(() => {
 >  9 |     setFullName(firstName + ' ' + lastName);
-     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
   10 |   }, [firstName, lastName]);
   11 |
   12 |   return <div>{fullName}</div>;
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-computed-props.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-computed-props.expect.md
index 39d71798aa..6bf62694c3 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-computed-props.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-computed-props.expect.md
@@ -29,13 +29,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props: [props]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.invalid-derived-state-from-computed-props.ts:9:4
    7 |   useEffect(() => {
    8 |     const computed = props.prefix + props.value + props.suffix;
 >  9 |     setDisplayValue(computed);
-     |     ^^^^^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
   10 |   }, [props.prefix, props.value, props.suffix]);
   11 |
   12 |   return <div>{displayValue}</div>;
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-destructured-props.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-destructured-props.expect.md
index 7f3f807568..c1c78ce47d 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-destructured-props.expect.md
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.invalid-derived-state-from-destructured-props.expect.md
@@ -30,13 +30,15 @@ export const FIXTURE_ENTRYPOINT = {
 ```
 Found 1 error:
 
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+Error: You might not need an effect. Derive values in render, not effects.
+
+Derived values (From props: [props]) should be computed during render, rather than in effects. Using an effect triggers an additional render which can hurt performance and user experience, potentially briefly showing stale values to the user.
 
 error.invalid-derived-state-from-destructured-props.ts:10:4
    8 |
    9 |   useEffect(() => {
 > 10 |     setFullName(props.firstName + ' ' + props.lastName);
-     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
+     |     ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ This should be computed during render, not in an effect
   11 |   }, [props.firstName, props.lastName]);
   12 |
   13 |   return <div>{fullName}</div>;
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.ref-conditional-in-effect-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.ref-conditional-in-effect-no-error.expect.md
deleted file mode 100644
index 5aad420e8e..0000000000
--- a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.ref-conditional-in-effect-no-error.expect.md
+++ /dev/null
@@ -1,60 +0,0 @@
-
-## Input
-
-```javascript
-// @validateNoDerivedComputationsInEffects
-import {useEffect, useState, useRef} from 'react';
-
-export default function Component({test}) {
-  const [local, setLocal] = useState(0);
-
-  const myRef = useRef(null);
-
-  useEffect(() => {
-    if (myRef.current) {
-      setLocal(test);
-    } else {
-      setLocal(test + test);
-    }
-  }, [test]);
-
-  return <>{local}</>;
-}
-
-export const FIXTURE_ENTRYPOINT = {
-  fn: Component,
-  params: [{test: 4}],
-};
-
-```
-
-
-## Error
-
-```
-Found 2 errors:
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.ref-conditional-in-effect-no-error.ts:11:6
-   9 |   useEffect(() => {
-  10 |     if (myRef.current) {
-> 11 |       setLocal(test);
-     |       ^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-  12 |     } else {
-  13 |       setLocal(test + test);
-  14 |     }
-
-Error: Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-
-error.ref-conditional-in-effect-no-error.ts:13:6
-  11 |       setLocal(test);
-  12 |     } else {
-> 13 |       setLocal(test + test);
-     |       ^^^^^^^^^^^^^^^^^^^^^ Values derived from props and state should be calculated during render, not in an effect. (https://react.dev/learn/you-might-not-need-an-effect#updating-state-based-on-props-or-state)
-  14 |     }
-  15 |   }, [test]);
-  16 |
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/ref-conditional-in-effect-no-error.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/ref-conditional-in-effect-no-error.expect.md
new file mode 100644
index 0000000000..3cb010baaf
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/ref-conditional-in-effect-no-error.expect.md
@@ -0,0 +1,82 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState, useRef} from 'react';
+
+export default function Component({test}) {
+  const [local, setLocal] = useState(0);
+
+  const myRef = useRef(null);
+
+  useEffect(() => {
+    if (myRef.current) {
+      setLocal(test);
+    } else {
+      setLocal(test + test);
+    }
+  }, [test]);
+
+  return <>{local}</>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{test: 4}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState, useRef } from "react";
+
+export default function Component(t0) {
+  const $ = _c(5);
+  const { test } = t0;
+  const [local, setLocal] = useState(0);
+
+  const myRef = useRef(null);
+  let t1;
+  let t2;
+  if ($[0] !== test) {
+    t1 = () => {
+      if (myRef.current) {
+        setLocal(test);
+      } else {
+        setLocal(test + test);
+      }
+    };
+
+    t2 = [test];
+    $[0] = test;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] !== local) {
+    t3 = <>{local}</>;
+    $[3] = local;
+    $[4] = t3;
+  } else {
+    t3 = $[4];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ test: 4 }],
+};
+
+```
+      
+### Eval output
+(kind: ok) 8
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.ref-conditional-in-effect-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/ref-conditional-in-effect-no-error.js
similarity index 100%
rename from compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.ref-conditional-in-effect-no-error.js
rename to compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/ref-conditional-in-effect-no-error.js