diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-conditionally-in-effect.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-conditionally-in-effect.expect.md
new file mode 100644
index 0000000000..b7a1c85d52
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-conditionally-in-effect.expect.md
@@ -0,0 +1,79 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({value, enabled}) {
+  const [localValue, setLocalValue] = useState('');
+
+  useEffect(() => {
+    if (enabled) {
+      setLocalValue(value);
+    } else {
+      setLocalValue('disabled');
+    }
+  }, [value, enabled]);
+
+  return <div>{localValue}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{value: 'test', enabled: true}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+function Component(t0) {
+  const $ = _c(6);
+  const { value, enabled } = t0;
+  const [localValue, setLocalValue] = useState("");
+  let t1;
+  let t2;
+  if ($[0] !== enabled || $[1] !== value) {
+    t1 = () => {
+      if (enabled) {
+        setLocalValue(value);
+      } else {
+        setLocalValue("disabled");
+      }
+    };
+
+    t2 = [value, enabled];
+    $[0] = enabled;
+    $[1] = value;
+    $[2] = t1;
+    $[3] = t2;
+  } else {
+    t1 = $[2];
+    t2 = $[3];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[4] !== localValue) {
+    t3 = <div>{localValue}</div>;
+    $[4] = localValue;
+    $[5] = t3;
+  } else {
+    t3 = $[5];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ value: "test", enabled: true }],
+};
+
+```
+      
+### 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/derived-state-conditionally-in-effect.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-conditionally-in-effect.js
new file mode 100644
index 0000000000..79d83b8925
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-conditionally-in-effect.js
@@ -0,0 +1,21 @@
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({value, enabled}) {
+  const [localValue, setLocalValue] = useState('');
+
+  useEffect(() => {
+    if (enabled) {
+      setLocalValue(value);
+    } else {
+      setLocalValue('disabled');
+    }
+  }, [value, enabled]);
+
+  return <div>{localValue}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{value: 'test', enabled: true}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-default-props.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-default-props.expect.md
new file mode 100644
index 0000000000..d4024eab5c
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-default-props.expect.md
@@ -0,0 +1,68 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+
+export default function Component(input = 'empty') {
+  const [currInput, setCurrInput] = useState(input);
+  const localConst = 'local const';
+
+  useEffect(() => {
+    setCurrInput(input + localConst);
+  }, [input, localConst]);
+
+  return <div>{currInput}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{input: 'test'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+
+export default function Component(t0) {
+  const $ = _c(5);
+  const input = t0 === undefined ? "empty" : t0;
+  const [currInput, setCurrInput] = useState(input);
+  let t1;
+  let t2;
+  if ($[0] !== input) {
+    t1 = () => {
+      setCurrInput(input + "local const");
+    };
+    t2 = [input, "local const"];
+    $[0] = input;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] !== currInput) {
+    t3 = <div>{currInput}</div>;
+    $[3] = currInput;
+    $[4] = t3;
+  } else {
+    t3 = $[4];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ input: "test" }],
+};
+
+```
+      
+### Eval output
+(kind: exception) useState 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/derived-state-from-default-props.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-default-props.js
new file mode 100644
index 0000000000..20a646f1ff
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-default-props.js
@@ -0,0 +1,17 @@
+// @validateNoDerivedComputationsInEffects
+
+export default function Component(input = 'empty') {
+  const [currInput, setCurrInput] = useState(input);
+  const localConst = 'local const';
+
+  useEffect(() => {
+    setCurrInput(input + localConst);
+  }, [input, localConst]);
+
+  return <div>{currInput}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{input: 'test'}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/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/derived-state-from-prop-local-state-and-component-scope.expect.md
new file mode 100644
index 0000000000..932e4fc9cc
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-local-state-and-component-scope.expect.md
@@ -0,0 +1,108 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({firstName}) {
+  const [lastName, setLastName] = useState('Doe');
+  const [fullName, setFullName] = useState('John');
+
+  const middleName = 'D.';
+
+  useEffect(() => {
+    setFullName(firstName + ' ' + middleName + ' ' + lastName);
+  }, [firstName, middleName, lastName]);
+
+  return (
+    <div>
+      <input value={lastName} onChange={e => setLastName(e.target.value)} />
+      <div>{fullName}</div>
+    </div>
+  );
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{firstName: 'John'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+function Component(t0) {
+  const $ = _c(12);
+  const { firstName } = t0;
+  const [lastName, setLastName] = useState("Doe");
+  const [fullName, setFullName] = useState("John");
+  let t1;
+  let t2;
+  if ($[0] !== firstName || $[1] !== lastName) {
+    t1 = () => {
+      setFullName(firstName + " " + "D." + " " + lastName);
+    };
+    t2 = [firstName, "D.", lastName];
+    $[0] = firstName;
+    $[1] = lastName;
+    $[2] = t1;
+    $[3] = t2;
+  } else {
+    t1 = $[2];
+    t2 = $[3];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[4] === Symbol.for("react.memo_cache_sentinel")) {
+    t3 = (e) => setLastName(e.target.value);
+    $[4] = t3;
+  } else {
+    t3 = $[4];
+  }
+  let t4;
+  if ($[5] !== lastName) {
+    t4 = <input value={lastName} onChange={t3} />;
+    $[5] = lastName;
+    $[6] = t4;
+  } else {
+    t4 = $[6];
+  }
+  let t5;
+  if ($[7] !== fullName) {
+    t5 = <div>{fullName}</div>;
+    $[7] = fullName;
+    $[8] = t5;
+  } else {
+    t5 = $[8];
+  }
+  let t6;
+  if ($[9] !== t4 || $[10] !== t5) {
+    t6 = (
+      <div>
+        {t4}
+        {t5}
+      </div>
+    );
+    $[9] = t4;
+    $[10] = t5;
+    $[11] = t6;
+  } else {
+    t6 = $[11];
+  }
+  return t6;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ firstName: "John" }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div><input value="Doe"><div>John D. Doe</div></div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-local-state-and-component-scope.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-local-state-and-component-scope.js
new file mode 100644
index 0000000000..4b1f7222e7
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-local-state-and-component-scope.js
@@ -0,0 +1,25 @@
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({firstName}) {
+  const [lastName, setLastName] = useState('Doe');
+  const [fullName, setFullName] = useState('John');
+
+  const middleName = 'D.';
+
+  useEffect(() => {
+    setFullName(firstName + ' ' + middleName + ' ' + lastName);
+  }, [firstName, middleName, lastName]);
+
+  return (
+    <div>
+      <input value={lastName} onChange={e => setLastName(e.target.value)} />
+      <div>{fullName}</div>
+    </div>
+  );
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{firstName: 'John'}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-with-side-effect.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-with-side-effect.expect.md
new file mode 100644
index 0000000000..cc98724820
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-with-side-effect.expect.md
@@ -0,0 +1,69 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+
+function Component({value}) {
+  const [localValue, setLocalValue] = useState('');
+
+  useEffect(() => {
+    setLocalValue(value);
+    document.title = `Value: ${value}`;
+  }, [value]);
+
+  return <div>{localValue}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{value: 'test'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+
+function Component(t0) {
+  const $ = _c(5);
+  const { value } = t0;
+  const [localValue, setLocalValue] = useState("");
+  let t1;
+  let t2;
+  if ($[0] !== value) {
+    t1 = () => {
+      setLocalValue(value);
+      document.title = `Value: ${value}`;
+    };
+    t2 = [value];
+    $[0] = value;
+    $[1] = t1;
+    $[2] = t2;
+  } else {
+    t1 = $[1];
+    t2 = $[2];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[3] !== localValue) {
+    t3 = <div>{localValue}</div>;
+    $[3] = localValue;
+    $[4] = t3;
+  } else {
+    t3 = $[4];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ value: "test" }],
+};
+
+```
+      
+### Eval output
+(kind: exception) useState 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/derived-state-from-prop-with-side-effect.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-with-side-effect.js
new file mode 100644
index 0000000000..11c4340eab
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/derived-state-from-prop-with-side-effect.js
@@ -0,0 +1,17 @@
+// @validateNoDerivedComputationsInEffects
+
+function Component({value}) {
+  const [localValue, setLocalValue] = useState('');
+
+  useEffect(() => {
+    setLocalValue(value);
+    document.title = `Value: ${value}`;
+  }, [value]);
+
+  return <div>{localValue}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{value: 'test'}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-local-function-call.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-local-function-call.expect.md
new file mode 100644
index 0000000000..36aa1ce15d
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-local-function-call.expect.md
@@ -0,0 +1,86 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({propValue}) {
+  const [value, setValue] = useState(null);
+
+  function localFunction() {
+    console.log('local function');
+  }
+
+  useEffect(() => {
+    setValue(propValue);
+    localFunction();
+  }, [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(6);
+  const { propValue } = t0;
+  const [value, setValue] = useState(null);
+  let t1;
+  if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
+    t1 = function localFunction() {
+      console.log("local function");
+    };
+    $[0] = t1;
+  } else {
+    t1 = $[0];
+  }
+  const localFunction = t1;
+  let t2;
+  let t3;
+  if ($[1] !== propValue) {
+    t2 = () => {
+      setValue(propValue);
+      localFunction();
+    };
+    t3 = [propValue];
+    $[1] = propValue;
+    $[2] = t2;
+    $[3] = t3;
+  } else {
+    t2 = $[2];
+    t3 = $[3];
+  }
+  useEffect(t2, t3);
+  let t4;
+  if ($[4] !== value) {
+    t4 = <div>{value}</div>;
+    $[4] = value;
+    $[5] = t4;
+  } else {
+    t4 = $[5];
+  }
+  return t4;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ propValue: "test" }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>test</div>
+logs: ['local function']
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-local-function-call.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-local-function-call.js
new file mode 100644
index 0000000000..00e658d896
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/effect-contains-local-function-call.js
@@ -0,0 +1,22 @@
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+function Component({propValue}) {
+  const [value, setValue] = useState(null);
+
+  function localFunction() {
+    console.log('local function');
+  }
+
+  useEffect(() => {
+    setValue(propValue);
+    localFunction();
+  }, [propValue]);
+
+  return <div>{value}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{propValue: 'test'}],
+};
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
new file mode 100644
index 0000000000..44ca7ffa5a
--- /dev/null
+++ 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
@@ -0,0 +1,49 @@
+
+## 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-call-outside-effect-no-error.js 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.js
new file mode 100644
index 0000000000..7b93e3c79d
--- /dev/null
+++ 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.js
@@ -0,0 +1,23 @@
+// @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'}],
+};
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
new file mode 100644
index 0000000000..a271a4c54b
--- /dev/null
+++ 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
@@ -0,0 +1,46 @@
+
+## 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-setter-used-outside-effect-no-error.js 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.js
new file mode 100644
index 0000000000..ab2c1a5182
--- /dev/null
+++ 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.js
@@ -0,0 +1,20 @@
+// @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'}],
+};
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
new file mode 100644
index 0000000000..90bef0c2e7
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.expect.md
@@ -0,0 +1,43 @@
+
+## 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.effect-with-global-function-call-no-error.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.js
new file mode 100644
index 0000000000..6c10927cc1
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/error.effect-with-global-function-call-no-error.js
@@ -0,0 +1,17 @@
+// @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'}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-computation-in-effect.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-computation-in-effect.expect.md
new file mode 100644
index 0000000000..b26a51832e
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-computation-in-effect.expect.md
@@ -0,0 +1,69 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+function Component() {
+  const [firstName, setFirstName] = useState('Taylor');
+  const lastName = 'Swift';
+
+  // 🔴 Avoid: redundant state and unnecessary Effect
+  const [fullName, setFullName] = useState('');
+  useEffect(() => {
+    setFullName(firstName + ' ' + lastName);
+  }, [firstName, lastName]);
+
+  return <div>{fullName}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+function Component() {
+  const $ = _c(5);
+  const [firstName] = useState("Taylor");
+
+  const [fullName, setFullName] = useState("");
+  let t0;
+  let t1;
+  if ($[0] !== firstName) {
+    t0 = () => {
+      setFullName(firstName + " " + "Swift");
+    };
+    t1 = [firstName, "Swift"];
+    $[0] = firstName;
+    $[1] = t0;
+    $[2] = t1;
+  } else {
+    t0 = $[1];
+    t1 = $[2];
+  }
+  useEffect(t0, t1);
+  let t2;
+  if ($[3] !== fullName) {
+    t2 = <div>{fullName}</div>;
+    $[3] = fullName;
+    $[4] = t2;
+  } else {
+    t2 = $[4];
+  }
+  return t2;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [],
+};
+
+```
+      
+### Eval output
+(kind: exception) useState 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/invalid-derived-computation-in-effect.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-computation-in-effect.js
new file mode 100644
index 0000000000..10dba6f999
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-computation-in-effect.js
@@ -0,0 +1,18 @@
+// @validateNoDerivedComputationsInEffects
+function Component() {
+  const [firstName, setFirstName] = useState('Taylor');
+  const lastName = 'Swift';
+
+  // 🔴 Avoid: redundant state and unnecessary Effect
+  const [fullName, setFullName] = useState('');
+  useEffect(() => {
+    setFullName(firstName + ' ' + lastName);
+  }, [firstName, lastName]);
+
+  return <div>{fullName}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-computed-props.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-computed-props.expect.md
new file mode 100644
index 0000000000..c8d60f981b
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-computed-props.expect.md
@@ -0,0 +1,72 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+export default function Component(props) {
+  const [displayValue, setDisplayValue] = useState('');
+
+  useEffect(() => {
+    const computed = props.prefix + props.value + props.suffix;
+    setDisplayValue(computed);
+  }, [props.prefix, props.value, props.suffix]);
+
+  return <div>{displayValue}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{prefix: '[', value: 'test', suffix: ']'}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+export default function Component(props) {
+  const $ = _c(7);
+  const [displayValue, setDisplayValue] = useState("");
+  let t0;
+  let t1;
+  if ($[0] !== props.prefix || $[1] !== props.suffix || $[2] !== props.value) {
+    t0 = () => {
+      const computed = props.prefix + props.value + props.suffix;
+      setDisplayValue(computed);
+    };
+    t1 = [props.prefix, props.value, props.suffix];
+    $[0] = props.prefix;
+    $[1] = props.suffix;
+    $[2] = props.value;
+    $[3] = t0;
+    $[4] = t1;
+  } else {
+    t0 = $[3];
+    t1 = $[4];
+  }
+  useEffect(t0, t1);
+  let t2;
+  if ($[5] !== displayValue) {
+    t2 = <div>{displayValue}</div>;
+    $[5] = displayValue;
+    $[6] = t2;
+  } else {
+    t2 = $[6];
+  }
+  return t2;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ prefix: "[", value: "test", suffix: "]" }],
+};
+
+```
+      
+### 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/invalid-derived-state-from-computed-props.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-computed-props.js
new file mode 100644
index 0000000000..31fb30cef9
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-computed-props.js
@@ -0,0 +1,18 @@
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+export default function Component(props) {
+  const [displayValue, setDisplayValue] = useState('');
+
+  useEffect(() => {
+    const computed = props.prefix + props.value + props.suffix;
+    setDisplayValue(computed);
+  }, [props.prefix, props.value, props.suffix]);
+
+  return <div>{displayValue}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{prefix: '[', value: 'test', suffix: ']'}],
+};
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-destructured-props.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-destructured-props.expect.md
new file mode 100644
index 0000000000..c06b8772e4
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-destructured-props.expect.md
@@ -0,0 +1,74 @@
+
+## Input
+
+```javascript
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+export default function Component({props}) {
+  const [fullName, setFullName] = useState(
+    props.firstName + ' ' + props.lastName
+  );
+
+  useEffect(() => {
+    setFullName(props.firstName + ' ' + props.lastName);
+  }, [props.firstName, props.lastName]);
+
+  return <div>{fullName}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{props: {firstName: 'John', lastName: 'Doe'}}],
+};
+
+```
+
+## Code
+
+```javascript
+import { c as _c } from "react/compiler-runtime"; // @validateNoDerivedComputationsInEffects
+import { useEffect, useState } from "react";
+
+export default function Component(t0) {
+  const $ = _c(6);
+  const { props } = t0;
+  const [fullName, setFullName] = useState(
+    props.firstName + " " + props.lastName,
+  );
+  let t1;
+  let t2;
+  if ($[0] !== props.firstName || $[1] !== props.lastName) {
+    t1 = () => {
+      setFullName(props.firstName + " " + props.lastName);
+    };
+    t2 = [props.firstName, props.lastName];
+    $[0] = props.firstName;
+    $[1] = props.lastName;
+    $[2] = t1;
+    $[3] = t2;
+  } else {
+    t1 = $[2];
+    t2 = $[3];
+  }
+  useEffect(t1, t2);
+  let t3;
+  if ($[4] !== fullName) {
+    t3 = <div>{fullName}</div>;
+    $[4] = fullName;
+    $[5] = t3;
+  } else {
+    t3 = $[5];
+  }
+  return t3;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ props: { firstName: "John", lastName: "Doe" } }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>John Doe</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-destructured-props.js b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-destructured-props.js
new file mode 100644
index 0000000000..2df3df1d52
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/effect-derived-computations/invalid-derived-state-from-destructured-props.js
@@ -0,0 +1,19 @@
+// @validateNoDerivedComputationsInEffects
+import {useEffect, useState} from 'react';
+
+export default function Component({props}) {
+  const [fullName, setFullName] = useState(
+    props.firstName + ' ' + props.lastName
+  );
+
+  useEffect(() => {
+    setFullName(props.firstName + ' ' + props.lastName);
+  }, [props.firstName, props.lastName]);
+
+  return <div>{fullName}</div>;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{props: {firstName: 'John', lastName: 'Doe'}}],
+};