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 01f88d4b8a..024ecd0ef2 100644
--- a/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateNoDerivedComputationsInEffects.ts
+++ b/compiler/packages/babel-plugin-react-compiler/src/Validation/ValidateNoDerivedComputationsInEffects.ts
@@ -18,6 +18,7 @@ import {
   CallExpression,
   Instruction,
   isUseStateType,
+  isUseRefType,
 } from '../HIR';
 import {eachInstructionLValue, eachInstructionOperand} from '../HIR/visitors';
 import {isMutable} from '../ReactiveScopes/InferReactiveScopeVariables';
@@ -284,6 +285,11 @@ 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;
+      }
+
       if (
         instr.value.kind === 'CallExpression' &&
         isSetStateType(instr.value.callee.identifier) &&
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/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.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