diff --git a/.changeset/perfect-dolls-clean.md b/.changeset/perfect-dolls-clean.md
new file mode 100644
index 000000000..404c8ec96
--- /dev/null
+++ b/.changeset/perfect-dolls-clean.md
@@ -0,0 +1,5 @@
+---
+"@preact/signals": patch
+---
+
+Update useComputed compute function on rerender
diff --git a/packages/preact/src/index.ts b/packages/preact/src/index.ts
index 7ffe05199..219cf42ad 100644
--- a/packages/preact/src/index.ts
+++ b/packages/preact/src/index.ts
@@ -421,11 +421,18 @@ export function useSignal<T>(value?: T, options?: SignalOptions<T>) {
 	)[0];
 }
 
-export function useComputed<T>(compute: () => T, options?: SignalOptions<T>) {
-	const $compute = useRef(compute);
-	$compute.current = compute;
+export function useComputed<T>(
+	compute: () => T,
+	options?: SignalOptions<T>
+): ReadonlySignal<T> {
+	const [$fn, $computed] = useMemo(() => {
+		const $fn = signal(compute);
+		return [$fn, computed(() => $fn.value(), options)] as const;
+	}, []);
+
 	(currentComponent as AugmentedComponent)._updateFlags |= HAS_COMPUTEDS;
-	return useMemo(() => computed<T>(() => $compute.current(), options), []);
+	$fn.value = compute;
+	return $computed;
 }
 
 function safeRaf(callback: () => void) {
diff --git a/packages/preact/test/index.test.tsx b/packages/preact/test/index.test.tsx
index 7d3ebe95b..fec3c928c 100644
--- a/packages/preact/test/index.test.tsx
+++ b/packages/preact/test/index.test.tsx
@@ -15,7 +15,13 @@ import {
 	Component,
 } from "preact";
 import type { ComponentChildren, FunctionComponent, VNode } from "preact";
-import { useContext, useEffect, useRef, useState } from "preact/hooks";
+import {
+	useContext,
+	useEffect,
+	useRef,
+	useState,
+	useCallback,
+} from "preact/hooks";
 import { setupRerender, act } from "preact/test-utils";
 
 const sleep = (ms?: number) => new Promise(r => setTimeout(r, ms));
@@ -1001,4 +1007,57 @@ describe("@preact/signals", () => {
 			expect(spy).to.have.been.calledWith("willmount:1");
 		});
 	});
+
+	describe("useComputed", () => {
+		it("should recompute and update dependency list when the compute function changes", async () => {
+			const s1 = signal(1);
+			const s2 = signal("a");
+
+			function App({ x }: { x: Signal }) {
+				const fn = useCallback(() => {
+					return x.value;
+				}, [x]);
+
+				const c = useComputed(fn);
+				return <span>{c.value}</span>;
+			}
+
+			render(<App x={s1} />, scratch);
+			expect(scratch.textContent).to.equal("1");
+
+			render(<App x={s2} />, scratch);
+			expect(scratch.textContent).to.equal("a");
+
+			s1.value = 2;
+			rerender();
+			expect(scratch.textContent).to.equal("a");
+
+			s2.value = "b";
+			rerender();
+			expect(scratch.textContent).to.equal("b");
+		});
+
+		it("should not recompute when the compute function doesn't change and dependency values don't change", async () => {
+			const s1 = signal(1);
+			const spy = sinon.spy();
+
+			function App({ x }: { x: Signal }) {
+				const fn = useCallback(() => {
+					spy();
+					return x.value;
+				}, [x]);
+
+				const c = useComputed(fn);
+				return <span>{c.value}</span>;
+			}
+
+			render(<App x={s1} />, scratch);
+			expect(scratch.textContent).to.equal("1");
+			expect(spy).to.have.been.calledOnce;
+
+			rerender();
+			expect(scratch.textContent).to.equal("1");
+			expect(spy).to.have.been.calledOnce;
+		});
+	});
 });