diff --git a/compiler/packages/babel-plugin-react-forget/src/Inference/InferReactivePlaces.ts b/compiler/packages/babel-plugin-react-forget/src/Inference/InferReactivePlaces.ts
index abf0578f71..e350310383 100644
--- a/compiler/packages/babel-plugin-react-forget/src/Inference/InferReactivePlaces.ts
+++ b/compiler/packages/babel-plugin-react-forget/src/Inference/InferReactivePlaces.ts
@@ -23,6 +23,7 @@ import {
   eachTerminalOperand,
 } from "../HIR/visitors";
 import { hasBackEdge } from "../Optimization/DeadCodeElimination";
+import { isMutable } from "../ReactiveScopes/InferReactiveScopeVariables";
 import { assertExhaustive } from "../Utils/utils";
 
 /**
@@ -195,11 +196,13 @@ export function inferReactivePlaces(fn: HIRFunction): void {
               case Effect.Store:
               case Effect.ConditionallyMutate:
               case Effect.Mutate: {
-                const resolvedId = identifierMapping.get(operand.identifier);
-                if (resolvedId !== undefined) {
-                  reactiveIdentifiers.markReactiveIdentifier(resolvedId);
+                if (isMutable(instruction, operand)) {
+                  const resolvedId = identifierMapping.get(operand.identifier);
+                  if (resolvedId !== undefined) {
+                    reactiveIdentifiers.markReactiveIdentifier(resolvedId);
+                  }
+                  reactiveIdentifiers.markReactive(operand);
                 }
-                reactiveIdentifiers.markReactive(operand);
                 break;
               }
               case Effect.Freeze:
diff --git a/compiler/packages/babel-plugin-react-forget/src/ReactiveScopes/InferReactiveScopeVariables.ts b/compiler/packages/babel-plugin-react-forget/src/ReactiveScopes/InferReactiveScopeVariables.ts
index ec7a031504..4f9c57d6fb 100644
--- a/compiler/packages/babel-plugin-react-forget/src/ReactiveScopes/InferReactiveScopeVariables.ts
+++ b/compiler/packages/babel-plugin-react-forget/src/ReactiveScopes/InferReactiveScopeVariables.ts
@@ -212,7 +212,7 @@ export function inferReactiveScopeVariables(fn: HIRFunction): void {
 }
 
 // Is the operand mutable at this given instruction
-function isMutable({ id }: Instruction, place: Place): boolean {
+export function isMutable({ id }: Instruction, place: Place): boolean {
   const range = place.identifier.mutableRange;
   return id >= range.start && id < range.end;
 }
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/phi-type-inference-property-store.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/phi-type-inference-property-store.expect.md
index 65dc68f39e..de9cb4fce2 100644
--- a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/phi-type-inference-property-store.expect.md
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/phi-type-inference-property-store.expect.md
@@ -32,7 +32,7 @@ export const FIXTURE_ENTRYPOINT = {
 ```javascript
 import { unstable_useMemoCache as useMemoCache } from "react"; // @debug
 function Component(props) {
-  const $ = useMemoCache(7);
+  const $ = useMemoCache(5);
   let t0;
   if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
     t0 = {};
@@ -42,7 +42,7 @@ function Component(props) {
   }
   const x = t0;
   let y;
-  if ($[1] !== props || $[2] !== x) {
+  if ($[1] !== props) {
     if (props.cond) {
       y = {};
     } else {
@@ -51,19 +51,17 @@ function Component(props) {
 
     y.x = x;
     $[1] = props;
-    $[2] = x;
-    $[3] = y;
+    $[2] = y;
   } else {
-    y = $[3];
+    y = $[2];
   }
   let t1;
-  if ($[4] !== x || $[5] !== y) {
+  if ($[3] !== y) {
     t1 = [x, y];
-    $[4] = x;
-    $[5] = y;
-    $[6] = t1;
+    $[3] = y;
+    $[4] = t1;
   } else {
-    t1 = $[6];
+    t1 = $[4];
   }
   return t1;
 }
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-nonreactive-captured-with-reactive.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-nonreactive-captured-with-reactive.expect.md
new file mode 100644
index 0000000000..2db66ce7d6
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-nonreactive-captured-with-reactive.expect.md
@@ -0,0 +1,50 @@
+
+## Input
+
+```javascript
+function Component(props) {
+  const x = {};
+  const y = props.y;
+  return [x, y]; // x is captured here along with a reactive value. this shouldn't make `x` reactive!
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ y: 42 }],
+};
+
+```
+
+## Code
+
+```javascript
+import { unstable_useMemoCache as useMemoCache } from "react";
+function Component(props) {
+  const $ = useMemoCache(3);
+  let t0;
+  if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
+    t0 = {};
+    $[0] = t0;
+  } else {
+    t0 = $[0];
+  }
+  const x = t0;
+  const y = props.y;
+  let t1;
+  if ($[1] !== y) {
+    t1 = [x, y];
+    $[1] = y;
+    $[2] = t1;
+  } else {
+    t1 = $[2];
+  }
+  return t1;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ y: 42 }],
+};
+
+```
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-nonreactive-captured-with-reactive.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-nonreactive-captured-with-reactive.js
new file mode 100644
index 0000000000..877ac4fc55
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-nonreactive-captured-with-reactive.js
@@ -0,0 +1,10 @@
+function Component(props) {
+  const x = {};
+  const y = props.y;
+  return [x, y]; // x is captured here along with a reactive value. this shouldn't make `x` reactive!
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ y: 42 }],
+};
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-object-captured-with-reactive-mutated.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-object-captured-with-reactive-mutated.expect.md
new file mode 100644
index 0000000000..c111af2fe8
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-object-captured-with-reactive-mutated.expect.md
@@ -0,0 +1,59 @@
+
+## Input
+
+```javascript
+const { mutate } = require("shared-runtime");
+
+function Component(props) {
+  const x = {};
+  const y = props.y;
+  const z = [x, y];
+  mutate(z);
+  // x's object identity can change bc it co-mutates with z, which is reactive via props.y
+  return [x];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ y: 42 }],
+};
+
+```
+
+## Code
+
+```javascript
+import { unstable_useMemoCache as useMemoCache } from "react";
+const { mutate } = require("shared-runtime");
+
+function Component(props) {
+  const $ = useMemoCache(4);
+  let x;
+  if ($[0] !== props.y) {
+    x = {};
+    const y = props.y;
+    const z = [x, y];
+    mutate(z);
+    $[0] = props.y;
+    $[1] = x;
+  } else {
+    x = $[1];
+  }
+  let t0;
+  if ($[2] !== x) {
+    t0 = [x];
+    $[2] = x;
+    $[3] = t0;
+  } else {
+    t0 = $[3];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ y: 42 }],
+};
+
+```
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-object-captured-with-reactive-mutated.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-object-captured-with-reactive-mutated.js
new file mode 100644
index 0000000000..97835f1f64
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/reactive-dependency-object-captured-with-reactive-mutated.js
@@ -0,0 +1,15 @@
+const { mutate } = require("shared-runtime");
+
+function Component(props) {
+  const x = {};
+  const y = props.y;
+  const z = [x, y];
+  mutate(z);
+  // x's object identity can change bc it co-mutates with z, which is reactive via props.y
+  return [x];
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ y: 42 }],
+};