diff --git a/changelog/@unreleased/pr-1260.v2.yml b/changelog/@unreleased/pr-1260.v2.yml
new file mode 100644
index 000000000..979f665f0
--- /dev/null
+++ b/changelog/@unreleased/pr-1260.v2.yml
@@ -0,0 +1,5 @@
+type: fix
+fix:
+  description: Fix baseline-exact-dependencies to no longer resolve compileOnly directly.
+  links:
+  - https://github.com/palantir/gradle-baseline/pull/1260
diff --git a/gradle-baseline-java/src/main/groovy/com/palantir/baseline/plugins/BaselineExactDependencies.java b/gradle-baseline-java/src/main/groovy/com/palantir/baseline/plugins/BaselineExactDependencies.java
index 462e28860..6108ccd63 100644
--- a/gradle-baseline-java/src/main/groovy/com/palantir/baseline/plugins/BaselineExactDependencies.java
+++ b/gradle-baseline-java/src/main/groovy/com/palantir/baseline/plugins/BaselineExactDependencies.java
@@ -41,6 +41,7 @@
 import org.gradle.api.artifacts.ResolvedDependency;
 import org.gradle.api.artifacts.component.ComponentIdentifier;
 import org.gradle.api.artifacts.component.ProjectComponentIdentifier;
+import org.gradle.api.attributes.Usage;
 import org.gradle.api.plugins.JavaPlugin;
 import org.gradle.api.plugins.JavaPluginConvention;
 import org.gradle.api.tasks.SourceSet;
@@ -65,17 +66,26 @@ public void apply(Project project) {
                     .getByName(SourceSet.MAIN_SOURCE_SET_NAME);
             Configuration compileClasspath =
                     project.getConfigurations().getByName(JavaPlugin.COMPILE_CLASSPATH_CONFIGURATION_NAME);
-            Configuration compileOnlyClasspath =
+            Configuration compileOnly =
                     project.getConfigurations().getByName(JavaPlugin.COMPILE_ONLY_CONFIGURATION_NAME);
-            Configuration annotationProcessorClasspath =
-                    project.getConfigurations().getByName(JavaPlugin.ANNOTATION_PROCESSOR_CONFIGURATION_NAME);
+            Configuration justCompileOnlyResolvable = project.getConfigurations()
+                    .create("baseline-exact-dependencies-compileOnly", conf -> {
+                        conf.setVisible(false);
+                        conf.setCanBeConsumed(false);
+                        conf.extendsFrom(compileOnly);
+                        // Important! this ensures we resolve 'compile' variants rather than 'runtime'
+                        // This is the same attribute that's being set on compileClasspath
+                        conf.getAttributes()
+                                .attribute(
+                                        Usage.USAGE_ATTRIBUTE,
+                                        project.getObjects().named(Usage.class, Usage.JAVA_API));
+                    });
 
             project.getTasks().create("checkUnusedDependencies", CheckUnusedDependenciesTask.class, task -> {
                 task.dependsOn(JavaPlugin.CLASSES_TASK_NAME);
                 task.setSourceClasses(mainSourceSet.getOutput().getClassesDirs());
                 task.dependenciesConfiguration(compileClasspath);
-                task.sourceOnlyConfiguration(compileOnlyClasspath);
-                task.sourceOnlyConfiguration(annotationProcessorClasspath);
+                task.sourceOnlyConfiguration(justCompileOnlyResolvable);
 
                 // this is liberally applied to ease the Java8 -> 11 transition
                 task.ignore("javax.annotation", "javax.annotation-api");
diff --git a/gradle-baseline-java/src/main/groovy/com/palantir/baseline/tasks/CheckUnusedDependenciesTask.java b/gradle-baseline-java/src/main/groovy/com/palantir/baseline/tasks/CheckUnusedDependenciesTask.java
index 2a85b8926..77e11d722 100644
--- a/gradle-baseline-java/src/main/groovy/com/palantir/baseline/tasks/CheckUnusedDependenciesTask.java
+++ b/gradle-baseline-java/src/main/groovy/com/palantir/baseline/tasks/CheckUnusedDependenciesTask.java
@@ -68,13 +68,6 @@ public final void checkUnusedDependencies() {
                 .collect(Collectors.toSet());
         BaselineExactDependencies.INDEXES.populateIndexes(declaredDependencies);
 
-        Set<ResolvedArtifact> necessaryArtifacts = Streams.stream(
-                        sourceClasses.get().iterator())
-                .flatMap(BaselineExactDependencies::referencedClasses)
-                .map(BaselineExactDependencies.INDEXES::classToDependency)
-                .filter(Optional::isPresent)
-                .map(Optional::get)
-                .collect(Collectors.toSet());
         Set<ResolvedArtifact> declaredArtifacts = declaredDependencies.stream()
                 .flatMap(dependency -> dependency.getModuleArtifacts().stream())
                 .filter(dependency ->
@@ -83,6 +76,14 @@ public final void checkUnusedDependencies() {
 
         excludeSourceOnlyDependencies();
 
+        Set<ResolvedArtifact> necessaryArtifacts = Streams.stream(
+                        sourceClasses.get().iterator())
+                .flatMap(BaselineExactDependencies::referencedClasses)
+                .map(BaselineExactDependencies.INDEXES::classToDependency)
+                .filter(Optional::isPresent)
+                .map(Optional::get)
+                .collect(Collectors.toSet());
+
         Set<ResolvedArtifact> possiblyUnused = Sets.difference(declaredArtifacts, necessaryArtifacts);
         getLogger()
                 .debug(
diff --git a/gradle-baseline-java/src/test/groovy/com/palantir/baseline/BaselineExactDependenciesTest.groovy b/gradle-baseline-java/src/test/groovy/com/palantir/baseline/BaselineExactDependenciesTest.groovy
index c71277916..962497ba9 100644
--- a/gradle-baseline-java/src/test/groovy/com/palantir/baseline/BaselineExactDependenciesTest.groovy
+++ b/gradle-baseline-java/src/test/groovy/com/palantir/baseline/BaselineExactDependenciesTest.groovy
@@ -26,6 +26,7 @@ class BaselineExactDependenciesTest extends AbstractPluginTest {
         plugins {
             id 'java'
             id 'com.palantir.baseline-exact-dependencies'
+            id 'com.palantir.baseline' apply false
         }
     '''.stripIndent()
 
@@ -43,6 +44,22 @@ class BaselineExactDependenciesTest extends AbstractPluginTest {
         with('checkUnusedDependencies', 'checkImplicitDependencies', '--stacktrace').build()
     }
 
+    def 'both tasks vacuously pass with no dependencies when entire baseline is applied'() {
+        when:
+        buildFile << standardBuildFile
+        buildFile << """
+            repositories {
+                jcenter()
+                mavenLocal() // for baseline-error-prone
+            }
+            apply plugin: 'com.palantir.baseline'
+        """.stripIndent()
+        file('src/main/java/pkg/Foo.java') << minimalJavaFile
+
+        then:
+        with('checkUnusedDependencies', 'checkImplicitDependencies', '--stacktrace').build()
+    }
+
     def 'tasks are not run as part of ./gradlew check'() {
         when:
         buildFile << standardBuildFile