diff --git a/src/functionalTest/kotlin/com/github/jengelman/gradle/plugins/shadow/FilteringTest.kt b/src/functionalTest/kotlin/com/github/jengelman/gradle/plugins/shadow/FilteringTest.kt
index be80e5e49..7859b117d 100644
--- a/src/functionalTest/kotlin/com/github/jengelman/gradle/plugins/shadow/FilteringTest.kt
+++ b/src/functionalTest/kotlin/com/github/jengelman/gradle/plugins/shadow/FilteringTest.kt
@@ -1,6 +1,8 @@
 package com.github.jengelman.gradle.plugins.shadow
 
 import assertk.assertThat
+import com.github.jengelman.gradle.plugins.shadow.tasks.ShadowJar.Companion.SHADOW_JAR_TASK_NAME
+import com.github.jengelman.gradle.plugins.shadow.testkit.containsAtLeast
 import com.github.jengelman.gradle.plugins.shadow.testkit.containsOnly
 import com.github.jengelman.gradle.plugins.shadow.util.Issue
 import kotlin.io.path.appendText
@@ -247,6 +249,81 @@ class FilteringTest : BasePluginTest() {
     }
   }
 
+  @Issue("https://github.com/GradleUp/shadow/issues/882")
+  @Test
+  fun shadowJarWithArtifactTransformOnProjectDependency() {
+    settingsScript.appendText(
+      """
+      include 'lib', 'app'
+      """
+        .trimIndent()
+    )
+    projectScript.writeText("")
+
+    path("lib/src/main/java/lib/Lib.java")
+      .writeText(
+        """
+        package lib;
+        public class Lib {}
+        """
+          .trimIndent()
+      )
+    path("lib/build.gradle").writeText(getDefaultProjectBuildScript("java") + lineSeparator)
+
+    path("app/src/main/java/app/App.java")
+      .writeText(
+        """
+        package app;
+        public class App {}
+        """
+          .trimIndent()
+      )
+    path("app/build.gradle")
+      .writeText(
+        """
+        ${getDefaultProjectBuildScript("java")}
+
+        abstract class NoOpTransform implements TransformAction<TransformParameters.None> {
+          @InputArtifact
+          abstract Provider<FileSystemLocation> getInputArtifact()
+
+          void transform(TransformOutputs outputs) {
+            def input = inputArtifact.get().asFile
+            def output = outputs.file(input.name)
+            output.bytes = input.bytes
+          }
+        }
+
+        def customAttr = Attribute.of('custom-transformed', Boolean)
+
+        dependencies {
+          implementation project(':lib')
+          attributesSchema {
+            attribute(customAttr)
+          }
+          artifactTypes.getByName('jar') {
+            attributes.attribute(customAttr, false)
+          }
+          registerTransform(NoOpTransform) {
+            from.attribute(customAttr, false)
+            to.attribute(customAttr, true)
+          }
+        }
+
+        configurations.runtimeClasspath {
+          attributes.attribute(customAttr, true)
+        }
+        """
+          .trimIndent() + lineSeparator
+      )
+
+    runWithSuccess(":app:$SHADOW_JAR_TASK_NAME")
+
+    assertThat(jarPath("app/build/libs/app-1.0-all.jar")).useAll {
+      containsAtLeast("app/", "app/App.class", *manifestEntries)
+    }
+  }
+
   private fun commonAssertions() {
     assertThat(outputShadowedJar).useAll {
       containsOnly("c.properties", *entriesInAB, *manifestEntries)
diff --git a/src/main/kotlin/com/github/jengelman/gradle/plugins/shadow/tasks/DependencyFilter.kt b/src/main/kotlin/com/github/jengelman/gradle/plugins/shadow/tasks/DependencyFilter.kt
index 90d38555b..4a9a668ba 100644
--- a/src/main/kotlin/com/github/jengelman/gradle/plugins/shadow/tasks/DependencyFilter.kt
+++ b/src/main/kotlin/com/github/jengelman/gradle/plugins/shadow/tasks/DependencyFilter.kt
@@ -1,6 +1,7 @@
 package com.github.jengelman.gradle.plugins.shadow.tasks
 
 import java.io.Serializable
+import java.util.concurrent.Callable
 import org.gradle.api.Project
 import org.gradle.api.artifacts.Configuration
 import org.gradle.api.artifacts.Dependency
@@ -47,15 +48,22 @@ public interface DependencyFilter : Serializable {
     )
 
     override fun resolve(configuration: Configuration): FileCollection {
-      val includes = mutableSetOf<ResolvedDependency>()
-      val excludes = mutableSetOf<ResolvedDependency>()
-      resolve(
-        dependencies = configuration.resolvedConfiguration.firstLevelModuleDependencies,
-        includedDependencies = includes,
-        excludedDependencies = excludes,
-      )
-      return project.files(configuration.files) -
-        project.files(excludes.flatMap { it.moduleArtifacts.map(ResolvedArtifact::getFile) })
+      return project
+        .files(
+          Callable {
+            val includes = mutableSetOf<ResolvedDependency>()
+            val excludes = mutableSetOf<ResolvedDependency>()
+            resolve(
+              dependencies = configuration.resolvedConfiguration.firstLevelModuleDependencies,
+              includedDependencies = includes,
+              excludedDependencies = excludes,
+            )
+            val excludedFiles =
+              excludes.flatMap { it.moduleArtifacts.map(ResolvedArtifact::getFile) }.toSet()
+            configuration.files.filter { it !in excludedFiles }
+          }
+        )
+        .builtBy(configuration)
     }
 
     override fun resolve(configurations: Collection<Configuration>): FileCollection {