diff --git a/Package.resolved b/Package.resolved
index 8f5d4c31..0fb0d955 100644
--- a/Package.resolved
+++ b/Package.resolved
@@ -1,5 +1,5 @@
 {
-  "originHash" : "ac879199bc109c96e02f389573ce5b101fa5c8a274b809fc57dba0d4736f5b6f",
+  "originHash" : "dc8209f1497546c820fac828af8d595b6882cb88310f412367280d8cde593506",
   "pins" : [
     {
       "identity" : "combine-schedulers",
@@ -76,10 +76,10 @@
     {
       "identity" : "xctest-dynamic-overlay",
       "kind" : "remoteSourceControl",
-      "location" : "https://github.com/pointfreeco/xctest-dynamic-overlay",
+      "location" : "https://github.com/jflan-dd/xctest-dynamic-overlay",
       "state" : {
-        "revision" : "27d767d643fa2cf083d0a73d74fa84cacb53e85c",
-        "version" : "1.4.1"
+        "branch" : "jflan/override-test-id",
+        "revision" : "09a97f20368a8c47b1fd86c4be9beb49585414ea"
       }
     }
   ],
diff --git a/Package@swift-6.0.swift b/Package@swift-6.0.swift
index 25dfe592..07cada9a 100644
--- a/Package@swift-6.0.swift
+++ b/Package@swift-6.0.swift
@@ -29,7 +29,7 @@ let package = Package(
     .package(url: "https://github.com/pointfreeco/combine-schedulers", from: "1.0.2"),
     .package(url: "https://github.com/pointfreeco/swift-clocks", from: "1.0.4"),
     .package(url: "https://github.com/pointfreeco/swift-concurrency-extras", from: "1.0.0"),
-    .package(url: "https://github.com/pointfreeco/xctest-dynamic-overlay", from: "1.4.0"),
+    .package(url: "https://github.com/jflan-dd/xctest-dynamic-overlay", branch: "jflan/override-test-id"),
     .package(url: "https://github.com/swiftlang/swift-syntax", "509.0.0"..<"601.0.0-prerelease"),
   ],
   targets: [
diff --git a/Sources/DependenciesTestSupport/TestTrait.swift b/Sources/DependenciesTestSupport/TestTrait.swift
index b5a3f4a7..74c66eb8 100644
--- a/Sources/DependenciesTestSupport/TestTrait.swift
+++ b/Sources/DependenciesTestSupport/TestTrait.swift
@@ -59,8 +59,10 @@
     public var isRecursive: Bool { true }
 
     public func prepare(for test: Test) async throws {
-      testValuesByTestID.withValue {
-        self.updateValues(&$0[test.id, default: DependencyValues(context: .test)])
+      TestContext.withTestID(test.id) {
+        testValuesByTestID.withValue { values in
+          self.updateValues(&values[test.id, default: DependencyValues(context: .test)])
+        }
       }
     }
   }
diff --git a/Tests/DependenciesTests/SwiftTestingTests.swift b/Tests/DependenciesTests/SwiftTestingTests.swift
index f4f2b8d8..dba34744 100644
--- a/Tests/DependenciesTests/SwiftTestingTests.swift
+++ b/Tests/DependenciesTests/SwiftTestingTests.swift
@@ -48,6 +48,24 @@
       #endif
     }
 
+    static let updateValues: @Sendable (inout DependencyValues) -> Void = {
+      $0[ValueProvidingKey.self].setValue(5)
+    }
+    
+    @Test(.dependencies(updateValues))
+    func cachedTraitUpdate() {
+      @Dependency(ValueProvidingKey.self) var provider
+
+      #expect(provider.value == 5, "Updates in made in .dependencies closure update cached dependency")
+    }
+    
+    @Test
+    func cacheIsolatedBetweenTests() {
+      @Dependency(ValueProvidingKey.self) var provider
+
+      #expect(provider.value == 0)
+    }
+
     @Test(.dependency(\.date.now, Date(timeIntervalSinceReferenceDate: 0)))
     func trait() {
       @Dependency(\.date.now) var now
@@ -92,4 +110,28 @@
       }
     }
   }
+
+  private protocol ValueProviding: Sendable {
+    var value: Int { get }
+    
+    func setValue(_ value: Int)
+  }
+
+  private final class ValueProvidingMock: ValueProviding {
+    let _value: LockIsolated<Int>
+
+    var value: Int { _value.value }
+    
+    init(value: Int) {
+      _value = .init(value)
+    }
+    
+    func setValue(_ value: Int) {
+      _value.setValue(value)
+    }
+  }
+
+  private enum ValueProvidingKey: TestDependencyKey {
+    static var testValue: ValueProviding { ValueProvidingMock(value: 0) }
+  }
 #endif