diff --git a/compiler/packages/babel-plugin-react-forget/src/Inference/InferReferenceEffects.ts b/compiler/packages/babel-plugin-react-forget/src/Inference/InferReferenceEffects.ts
index 79ebcb449c..daeaed5969 100644
--- a/compiler/packages/babel-plugin-react-forget/src/Inference/InferReferenceEffects.ts
+++ b/compiler/packages/babel-plugin-react-forget/src/Inference/InferReferenceEffects.ts
@@ -21,6 +21,7 @@ import {
   MethodCall,
   Phi,
   Place,
+  SpreadPattern,
   Type,
   ValueKind,
   ValueReason,
@@ -133,26 +134,48 @@ export default function inferReferenceEffects(
         kind: ValueKind.Frozen,
         reason: new Set([ValueReason.ReactiveFunctionArgument]),
       };
-  for (const param of fn.params) {
+
+  const isComponent = isComponentName(fn.id);
+  if (isComponent) {
+    CompilerError.invariant(fn.params.length <= 2, {
+      reason:
+        "Expected React component to have not more than two parameters: one for props and for ref",
+      description: null,
+      loc: fn.loc,
+      suggestions: null,
+    });
+    const [props, ref] = fn.params;
     let value: InstructionValue;
     let place: Place;
-    if (param.kind === "Identifier") {
-      place = param;
-      value = {
-        kind: "Primitive",
-        loc: param.loc,
-        value: undefined,
-      };
-    } else {
-      place = param.place;
-      value = {
-        kind: "Primitive",
-        loc: param.place.loc,
-        value: undefined,
-      };
+    if (props) {
+      inferParam(props, initialState, paramKind);
+    }
+    if (ref) {
+      if (ref.kind === "Identifier") {
+        place = ref;
+        value = {
+          kind: "ObjectExpression",
+          properties: [],
+          loc: ref.loc,
+        };
+      } else {
+        place = ref.place;
+        value = {
+          kind: "ObjectExpression",
+          properties: [],
+          loc: ref.place.loc,
+        };
+      }
+      initialState.initialize(value, {
+        kind: ValueKind.Mutable,
+        reason: new Set([ValueReason.Other]),
+      });
+      initialState.define(place, value);
+    }
+  } else {
+    for (const param of fn.params) {
+      inferParam(param, initialState, paramKind);
     }
-    initialState.initialize(value, paramKind);
-    initialState.define(place, value);
   }
 
   // Map of blocks to the last (merged) incoming state that was processed
@@ -596,6 +619,36 @@ class InferenceState {
   }
 }
 
+function isComponentName(name: string | null): boolean {
+  return name !== null && /^[A-Z]/.test(name);
+}
+
+function inferParam(
+  param: Place | SpreadPattern,
+  initialState: InferenceState,
+  paramKind: AbstractValue
+): void {
+  let value: InstructionValue;
+  let place: Place;
+  if (param.kind === "Identifier") {
+    place = param;
+    value = {
+      kind: "Primitive",
+      loc: param.loc,
+      value: undefined,
+    };
+  } else {
+    place = param.place;
+    value = {
+      kind: "Primitive",
+      loc: param.place.loc,
+      value: undefined,
+    };
+  }
+  initialState.initialize(value, paramKind);
+  initialState.define(place, value);
+}
+
 /*
  * Joins two values using the following rules:
  * == Effect Transitions ==
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/ref-parameter-mutate-in-effect.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/ref-parameter-mutate-in-effect.expect.md
new file mode 100644
index 0000000000..a3822fea87
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/ref-parameter-mutate-in-effect.expect.md
@@ -0,0 +1,67 @@
+
+## Input
+
+```javascript
+import { useEffect } from "react";
+
+function Foo(props, ref) {
+  useEffect(() => {
+    ref.current = 2;
+  }, []);
+  return <div>{props.bar}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [{ bar: "foo" }, { ref: { cuurrent: 1 } }],
+  isComponent: true,
+};
+
+```
+
+## Code
+
+```javascript
+import { useEffect, unstable_useMemoCache as useMemoCache } from "react";
+
+function Foo(props, ref) {
+  const $ = useMemoCache(5);
+  let t0;
+  if ($[0] !== ref.current) {
+    t0 = () => {
+      ref.current = 2;
+    };
+    $[0] = ref.current;
+    $[1] = t0;
+  } else {
+    t0 = $[1];
+  }
+  let t1;
+  if ($[2] === Symbol.for("react.memo_cache_sentinel")) {
+    t1 = [];
+    $[2] = t1;
+  } else {
+    t1 = $[2];
+  }
+  useEffect(t0, t1);
+  let t2;
+  if ($[3] !== props.bar) {
+    t2 = <div>{props.bar}</div>;
+    $[3] = props.bar;
+    $[4] = t2;
+  } else {
+    t2 = $[4];
+  }
+  return t2;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [{ bar: "foo" }, { ref: { cuurrent: 1 } }],
+  isComponent: true,
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>foo</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/ref-parameter-mutate-in-effect.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/ref-parameter-mutate-in-effect.js
new file mode 100644
index 0000000000..adc1c9ce89
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/ref-parameter-mutate-in-effect.js
@@ -0,0 +1,14 @@
+import { useEffect } from "react";
+
+function Foo(props, ref) {
+  useEffect(() => {
+    ref.current = 2;
+  }, []);
+  return <div>{props.bar}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [{ bar: "foo" }, { ref: { cuurrent: 1 } }],
+  isComponent: true,
+};
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/todo.validate-mutate-ref-arg-in-render.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/todo.validate-mutate-ref-arg-in-render.expect.md
new file mode 100644
index 0000000000..8416b01394
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/todo.validate-mutate-ref-arg-in-render.expect.md
@@ -0,0 +1,46 @@
+
+## Input
+
+```javascript
+// @validateRefAccessDuringRender: true
+function Foo(props, ref) {
+  ref.current = 2;
+  return <div>{props.bar}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [{ bar: "foo" }, { ref: { cuurrent: 1 } }],
+  isComponent: true,
+};
+
+```
+
+## Code
+
+```javascript
+import { unstable_useMemoCache as useMemoCache } from "react"; // @validateRefAccessDuringRender: true
+function Foo(props, ref) {
+  const $ = useMemoCache(2);
+  ref.current = 2;
+  let t0;
+  if ($[0] !== props.bar) {
+    t0 = <div>{props.bar}</div>;
+    $[0] = props.bar;
+    $[1] = t0;
+  } else {
+    t0 = $[1];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [{ bar: "foo" }, { ref: { cuurrent: 1 } }],
+  isComponent: true,
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>foo</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/todo.validate-mutate-ref-arg-in-render.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/todo.validate-mutate-ref-arg-in-render.js
new file mode 100644
index 0000000000..6163a7b007
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/todo.validate-mutate-ref-arg-in-render.js
@@ -0,0 +1,11 @@
+// @validateRefAccessDuringRender: true
+function Foo(props, ref) {
+  ref.current = 2;
+  return <div>{props.bar}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [{ bar: "foo" }, { ref: { cuurrent: 1 } }],
+  isComponent: true,
+};
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-1.expect.md
similarity index 76%
rename from compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter.expect.md
rename to compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-1.expect.md
index f37e101de6..793cdea9b4 100644
--- a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter.expect.md
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-1.expect.md
@@ -2,8 +2,7 @@
 ## Input
 
 ```javascript
-// @debug
-function Component(a, [b], { c }) {
+function Component({ a: a, b: [b], c: { c } }) {
   let d = a++;
   let e = ++a;
   let f = b--;
@@ -15,7 +14,7 @@ function Component(a, [b], { c }) {
 
 export const FIXTURE_ENTRYPOINT = {
   fn: Component,
-  params: [2, [3], { c: 4 }],
+  params: [{ a: 2, b: [3], c: { c: 4 } }],
   isComponent: false,
 };
 
@@ -24,11 +23,12 @@ export const FIXTURE_ENTRYPOINT = {
 ## Code
 
 ```javascript
-import { unstable_useMemoCache as useMemoCache } from "react"; // @debug
-function Component(a, t37, t38) {
+import { unstable_useMemoCache as useMemoCache } from "react";
+function Component(t38) {
   const $ = useMemoCache(10);
-  let [b] = t37;
-  let { c } = t38;
+  let { a, b: t40, c: t41 } = t38;
+  let [b] = t40;
+  let { c } = t41;
   const d = a++;
   const e = ++a;
   const f = b--;
@@ -66,7 +66,7 @@ function Component(a, t37, t38) {
 
 export const FIXTURE_ENTRYPOINT = {
   fn: Component,
-  params: [2, [3], { c: 4 }],
+  params: [{ a: 2, b: [3], c: { c: 4 } }],
   isComponent: false,
 };
 
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-1.js
similarity index 69%
rename from compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter.js
rename to compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-1.js
index ec5c6d56f0..bbed4b7f86 100644
--- a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter.js
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-1.js
@@ -1,5 +1,4 @@
-// @debug
-function Component(a, [b], { c }) {
+function Component({ a: a, b: [b], c: { c } }) {
   let d = a++;
   let e = ++a;
   let f = b--;
@@ -11,6 +10,6 @@ function Component(a, [b], { c }) {
 
 export const FIXTURE_ENTRYPOINT = {
   fn: Component,
-  params: [2, [3], { c: 4 }],
+  params: [{ a: 2, b: [3], c: { c: 4 } }],
   isComponent: false,
 };
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-2.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-2.expect.md
new file mode 100644
index 0000000000..e07c7bf161
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-2.expect.md
@@ -0,0 +1,49 @@
+
+## Input
+
+```javascript
+function Component(a) {
+  let d = a++;
+  let e = ++a;
+  return [a, d, e];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [2],
+  isComponent: false,
+};
+
+```
+
+## Code
+
+```javascript
+import { unstable_useMemoCache as useMemoCache } from "react";
+function Component(a) {
+  const $ = useMemoCache(4);
+  const d = a++;
+  const e = ++a;
+  let t0;
+  if ($[0] !== a || $[1] !== d || $[2] !== e) {
+    t0 = [a, d, e];
+    $[0] = a;
+    $[1] = d;
+    $[2] = e;
+    $[3] = t0;
+  } else {
+    t0 = $[3];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [2],
+  isComponent: false,
+};
+
+```
+      
+### Eval output
+(kind: ok) [4,2,4]
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-2.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-2.js
new file mode 100644
index 0000000000..b86519477c
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-2.js
@@ -0,0 +1,11 @@
+function Component(a) {
+  let d = a++;
+  let e = ++a;
+  return [a, d, e];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [2],
+  isComponent: false,
+};
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-3.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-3.expect.md
new file mode 100644
index 0000000000..04905404f8
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-3.expect.md
@@ -0,0 +1,50 @@
+
+## Input
+
+```javascript
+function Component({ c }) {
+  let h = c++;
+  let i = --c;
+  return [c, h, i];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ c: 4 }],
+  isComponent: false,
+};
+
+```
+
+## Code
+
+```javascript
+import { unstable_useMemoCache as useMemoCache } from "react";
+function Component(t14) {
+  const $ = useMemoCache(4);
+  let { c } = t14;
+  const h = c++;
+  const i = --c;
+  let t0;
+  if ($[0] !== c || $[1] !== h || $[2] !== i) {
+    t0 = [c, h, i];
+    $[0] = c;
+    $[1] = h;
+    $[2] = i;
+    $[3] = t0;
+  } else {
+    t0 = $[3];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ c: 4 }],
+  isComponent: false,
+};
+
+```
+      
+### Eval output
+(kind: ok) [4,4,4]
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-3.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-3.js
new file mode 100644
index 0000000000..488cc93d49
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-3.js
@@ -0,0 +1,11 @@
+function Component({ c }) {
+  let h = c++;
+  let i = --c;
+  return [c, h, i];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ c: 4 }],
+  isComponent: false,
+};
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-4.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-4.expect.md
new file mode 100644
index 0000000000..4ec48b36ab
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-4.expect.md
@@ -0,0 +1,50 @@
+
+## Input
+
+```javascript
+function Component([b]) {
+  let f = b--;
+  let g = --b;
+  return [b, f, g];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [[3]],
+  isComponent: false,
+};
+
+```
+
+## Code
+
+```javascript
+import { unstable_useMemoCache as useMemoCache } from "react";
+function Component(t14) {
+  const $ = useMemoCache(4);
+  let [b] = t14;
+  const f = b--;
+  const g = --b;
+  let t0;
+  if ($[0] !== b || $[1] !== f || $[2] !== g) {
+    t0 = [b, f, g];
+    $[0] = b;
+    $[1] = f;
+    $[2] = g;
+    $[3] = t0;
+  } else {
+    t0 = $[3];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [[3]],
+  isComponent: false,
+};
+
+```
+      
+### Eval output
+(kind: ok) [1,3,1]
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-4.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-4.js
new file mode 100644
index 0000000000..c4c75e460d
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/update-expression-on-function-parameter-4.js
@@ -0,0 +1,11 @@
+function Component([b]) {
+  let f = b--;
+  let g = --b;
+  return [b, f, g];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [[3]],
+  isComponent: false,
+};