diff --git a/.changeset/fuzzy-shrimps-call.md b/.changeset/fuzzy-shrimps-call.md
new file mode 100644
index 00000000000..ad484ae08ba
--- /dev/null
+++ b/.changeset/fuzzy-shrimps-call.md
@@ -0,0 +1,5 @@
+---
+"@apollo/client": patch
+---
+
+Fix a bug where `useFragment` did not re-render as expected
diff --git a/.size-limits.json b/.size-limits.json
index 8965193f2fe..7b0839e8f80 100644
--- a/.size-limits.json
+++ b/.size-limits.json
@@ -1,4 +1,4 @@
 {
-  "dist/apollo-client.min.cjs": 40252,
-  "import { ApolloClient, InMemoryCache, HttpLink } from \"dist/index.js\" (production)": 33059
+  "dist/apollo-client.min.cjs": 40242,
+  "import { ApolloClient, InMemoryCache, HttpLink } from \"dist/index.js\" (production)": 33058
 }
diff --git a/src/react/hooks/__tests__/useFragment.test.tsx b/src/react/hooks/__tests__/useFragment.test.tsx
index f58ef9aaa6d..046c1c538c9 100644
--- a/src/react/hooks/__tests__/useFragment.test.tsx
+++ b/src/react/hooks/__tests__/useFragment.test.tsx
@@ -260,6 +260,45 @@ describe("useFragment", () => {
       "item 4",
     ]);
 
+    // set Item #2 back to its original value
+    act(() => {
+      cache.writeFragment({
+        fragment: ItemFragment,
+        data: {
+          __typename: "Item",
+          id: 2,
+          text: "Item #2",
+        },
+      });
+    });
+
+    await waitFor(() => {
+      expect(getItemTexts()).toEqual([
+        "Item #1",
+        "Item #2",
+        "Item #3 from cache.modify",
+        "Item #4 updated",
+        "Item #5",
+      ]);
+    });
+
+    expect(renders).toEqual([
+      "list",
+      "item 1",
+      "item 2",
+      "item 5",
+      "item 2",
+      "list",
+      "item 1",
+      "item 2",
+      "item 3",
+      "item 4",
+      "item 5",
+      "item 4",
+      // Only the second item should have re-rendered.
+      "item 2",
+    ]);
+
     expect(cache.extract()).toEqual({
       "Item:1": {
         __typename: "Item",
@@ -268,7 +307,7 @@ describe("useFragment", () => {
       "Item:2": {
         __typename: "Item",
         id: 2,
-        text: "Item #2 updated",
+        text: "Item #2",
       },
       "Item:3": {
         __typename: "Item",
diff --git a/src/react/hooks/useFragment.ts b/src/react/hooks/useFragment.ts
index 9cc56f05908..89ce1603a00 100644
--- a/src/react/hooks/useFragment.ts
+++ b/src/react/hooks/useFragment.ts
@@ -75,30 +75,28 @@ function _useFragment<TData = any, TVars = OperationVariables>(
     [cache, from]
   );
 
-  const resultRef = React.useRef<UseFragmentResult<TData>>();
   const stableOptions = useDeepMemo(() => ({ ...rest, from: id! }), [rest, id]);
 
   // Since .next is async, we need to make sure that we
   // get the correct diff on the next render given new diffOptions
-  const currentDiff = React.useMemo(() => {
+  const diff = React.useMemo(() => {
     const { fragment, fragmentName, from, optimistic = true } = stableOptions;
 
-    return diffToResult(
-      cache.diff<TData>({
-        ...stableOptions,
-        returnPartialData: true,
-        id: from,
-        query: cache["getFragmentDoc"](fragment, fragmentName),
-        optimistic,
-      })
-    );
+    return {
+      result: diffToResult(
+        cache.diff<TData>({
+          ...stableOptions,
+          returnPartialData: true,
+          id: from,
+          query: cache["getFragmentDoc"](fragment, fragmentName),
+          optimistic,
+        })
+      ),
+    };
   }, [stableOptions, cache]);
 
   // Used for both getSnapshot and getServerSnapshot
-  const getSnapshot = React.useCallback(
-    () => resultRef.current || currentDiff,
-    [currentDiff]
-  );
+  const getSnapshot = React.useCallback(() => diff.result, [diff]);
 
   return useSyncExternalStore(
     React.useCallback(
@@ -109,9 +107,9 @@ function _useFragment<TData = any, TVars = OperationVariables>(
             // Since `next` is called async by zen-observable, we want to avoid
             // unnecessarily rerendering this hook for the initial result
             // emitted from watchFragment which should be equal to
-            // `currentDiff`.
-            if (equal(result, currentDiff)) return;
-            resultRef.current = result;
+            // `diff.result`.
+            if (equal(result, diff.result)) return;
+            diff.result = result;
             // If we get another update before we've re-rendered, bail out of
             // the update and try again. This ensures that the relative timing
             // between useQuery and useFragment stays roughly the same as
@@ -121,12 +119,11 @@ function _useFragment<TData = any, TVars = OperationVariables>(
           },
         });
         return () => {
-          resultRef.current = void 0;
           subscription.unsubscribe();
           clearTimeout(lastTimeout);
         };
       },
-      [cache, stableOptions, currentDiff]
+      [cache, stableOptions, diff]
     ),
     getSnapshot,
     getSnapshot