diff --git a/src/functionalTest/groovy/com/autonomousapps/android/AndroidTransformSpec.groovy b/src/functionalTest/groovy/com/autonomousapps/android/AndroidTransformSpec.groovy
new file mode 100644
index 000000000..99c5a697e
--- /dev/null
+++ b/src/functionalTest/groovy/com/autonomousapps/android/AndroidTransformSpec.groovy
@@ -0,0 +1,32 @@
+// Copyright (c) 2024. Tony Robalik.
+// SPDX-License-Identifier: Apache-2.0
+package com.autonomousapps.android
+
+
+import com.autonomousapps.android.projects.AndroidTransformProject
+import org.gradle.util.GradleVersion
+
+import static com.autonomousapps.advice.truth.BuildHealthSubject.buildHealth
+import static com.autonomousapps.utils.Runner.build
+import static com.google.common.truth.Truth.assertAbout
+
+/** See https://github.com/autonomousapps/dependency-analysis-gradle-plugin/issues/1346. */
+final class AndroidTransformSpec extends AbstractAndroidSpec {
+
+  def "does not recommend replace api with implementation (#gradleVersion AGP #agpVersion)"() {
+    given:
+    def project = new AndroidTransformProject(agpVersion as String)
+    gradleProject = project.gradleProject
+
+    when:
+    build(gradleVersion as GradleVersion, gradleProject.rootDir, 'buildHealth')
+
+    then:
+    assertAbout(buildHealth())
+      .that(project.actualBuildHealth())
+      .containsExactlyDependencyAdviceIn(project.expectedBuildHealth)
+
+    where:
+    [gradleVersion, agpVersion] << gradleAgpMatrix()
+  }
+}
diff --git a/src/functionalTest/groovy/com/autonomousapps/android/projects/AndroidTransformProject.groovy b/src/functionalTest/groovy/com/autonomousapps/android/projects/AndroidTransformProject.groovy
new file mode 100644
index 000000000..46de768cc
--- /dev/null
+++ b/src/functionalTest/groovy/com/autonomousapps/android/projects/AndroidTransformProject.groovy
@@ -0,0 +1,185 @@
+// Copyright (c) 2024. Tony Robalik.
+// SPDX-License-Identifier: Apache-2.0
+package com.autonomousapps.android.projects
+
+
+import com.autonomousapps.kit.GradleProject
+import com.autonomousapps.kit.Source
+import com.autonomousapps.kit.gradle.dependencies.Plugins
+import com.autonomousapps.model.ProjectAdvice
+
+import static com.autonomousapps.AdviceHelper.actualProjectAdvice
+import static com.autonomousapps.AdviceHelper.emptyProjectAdviceFor
+import static com.autonomousapps.kit.gradle.Dependency.project
+
+/**
+ * https://github.com/autonomousapps/dependency-analysis-gradle-plugin/issues/1346.
+ */
+final class AndroidTransformProject extends AbstractAndroidProject {
+
+  final GradleProject gradleProject
+  private final String agpVersion
+
+  AndroidTransformProject(String agpVersion) {
+    super(agpVersion)
+
+    this.agpVersion = agpVersion
+    this.gradleProject = build()
+  }
+
+  private GradleProject build() {
+    return newAndroidGradleProjectBuilder(agpVersion)
+      .withAndroidLibProject('consumer', 'com.example.consumer') { consumer ->
+        consumer.manifest = libraryManifest('com.example.consumer')
+        consumer.sources = consumerSources
+        consumer.withBuildScript { bs ->
+          bs.plugins = [Plugins.androidLib, Plugins.kotlinAndroidNoVersion, Plugins.dependencyAnalysisNoVersion]
+          bs.android = defaultAndroidLibBlock(true, 'com.example.consumer')
+
+          bs.dependencies(
+            project('api', ':producer'),
+          )
+          bs.withGroovy(TRANSFORM_TASK)
+        }
+      }
+      .withSubproject('producer') { producer ->
+        producer.sources = producerSources
+        producer.withBuildScript { bs ->
+          bs.plugins = [Plugins.kotlinJvmNoVersion, Plugins.dependencyAnalysisNoVersion]
+        }
+      }
+      .write()
+  }
+
+  private static TRANSFORM_TASK =
+    """\
+    import com.android.build.api.artifact.ScopedArtifact
+    import com.android.build.api.variant.ScopedArtifacts
+    import java.io.FileInputStream
+    import java.io.FileOutputStream
+    import java.nio.file.Files
+    import java.nio.file.Paths
+    import java.util.zip.ZipEntry
+    import java.util.zip.ZipFile
+    import java.util.zip.ZipOutputStream
+    
+    abstract class TransformTask extends DefaultTask {
+      @PathSensitive(PathSensitivity.RELATIVE)
+      @InputFiles
+      abstract ListProperty<RegularFile> getAllJars();
+    
+      @PathSensitive(PathSensitivity.RELATIVE)
+      @InputFiles
+      abstract ListProperty<Directory> getAllDirs();
+    
+      @OutputFile
+      abstract RegularFileProperty getOutput();
+    
+      @TaskAction
+      void transform() {
+        def outputFile = output.get().asFile
+        def outputStream = new ZipOutputStream(new FileOutputStream(outputFile))
+        try {
+          allJars.get().forEach { jar ->
+            addJarToZip(jar.asFile, outputStream)
+          }
+          allDirs.get().forEach { dir ->
+            addDirectoryToZip(dir.asFile, outputStream, dir.asFile.path)
+          }
+        } finally {
+          outputStream.close()
+        }
+    
+        println("Copying \${allJars.get()} and \${allDirs.get()} into \${output.get()}")
+        println("Resulting jar file contents:")
+        def zipFile = new ZipFile(outputFile)
+        try {
+          zipFile.entries().each {
+            println(it.name)
+          }
+        } finally {
+          zipFile.close()
+        }
+      }
+    
+      void addJarToZip(File file, ZipOutputStream zipOut) {
+        def zipFile = new ZipFile(file)
+        zipFile.entries().each {
+          def zipEntry = new ZipEntry(it.name)
+          zipOut.putNextEntry(zipEntry)
+          def inputStream = zipFile.getInputStream(it)
+          try {
+            inputStream.transferTo(zipOut)
+          } finally {
+            inputStream.close()
+          }
+        }
+      }
+    
+      void addDirectoryToZip(File directory, ZipOutputStream zipOut, String basePath) {
+        Files.walk(directory.toPath()).forEach {
+          def file = it.toFile()
+          if (file.isFile()) {
+            def fileInputStream = new FileInputStream(file)
+            try {
+              def zipEntry = new ZipEntry(Paths.get(basePath).relativize(file.toPath()).toString())
+              zipOut.putNextEntry(zipEntry)
+              fileInputStream.transferTo(zipOut)
+              zipOut.closeEntry()
+            } finally {
+              fileInputStream.close()
+            }
+          }
+        }
+      }
+    }
+    
+    androidComponents {
+      onVariants(selector().all()) { variant ->
+        variant.artifacts
+          .forScope(ScopedArtifacts.Scope.PROJECT)
+          .use(tasks.register("transformTask\${variant.name.capitalize()}", TransformTask.class))
+          .toTransform(ScopedArtifact.CLASSES.INSTANCE,  { it.getAllJars() }, { it.getAllDirs() }, { it.getOutput() })
+      }
+    }
+    """.stripIndent()
+
+  private List<Source> consumerSources = [
+    Source.kotlin(
+      """
+      package com.example.consumer
+      
+      import com.example.producer.Producer
+      
+      class Consumer : Producer() {
+        override fun produce(): String {
+          return "Hello, world!"
+        }
+      }
+      """.stripIndent()
+    )
+      .withPath('com.example.consumer', 'Consumer')
+      .build()
+  ]
+
+  private List<Source> producerSources = [
+    Source.kotlin(
+      """
+      package com.example.producer
+      
+      abstract class Producer {
+        abstract fun produce(): String
+      }
+      """.stripIndent()
+    )
+      .withPath('com.example.producer', 'Producer')
+      .build()
+  ]
+
+  Set<ProjectAdvice> actualBuildHealth() {
+    return actualProjectAdvice(gradleProject)
+  }
+
+  final Set<ProjectAdvice> expectedBuildHealth =
+    emptyProjectAdviceFor(':consumer', ':producer')
+}
diff --git a/src/main/kotlin/com/autonomousapps/internal/BytecodeParsers.kt b/src/main/kotlin/com/autonomousapps/internal/BytecodeParsers.kt
index 268752e32..88b531c5f 100644
--- a/src/main/kotlin/com/autonomousapps/internal/BytecodeParsers.kt
+++ b/src/main/kotlin/com/autonomousapps/internal/BytecodeParsers.kt
@@ -12,6 +12,8 @@ import com.autonomousapps.model.internal.intermediates.consumer.ExplodingBytecod
 import com.autonomousapps.model.internal.intermediates.consumer.MemberAccess
 import org.gradle.api.logging.Logger
 import java.io.File
+import java.nio.file.Paths
+import java.util.jar.JarFile
 
 internal sealed class ClassReferenceParser(private val buildDir: File) {
 
@@ -31,32 +33,55 @@ internal sealed class ClassReferenceParser(private val buildDir: File) {
 /** Given a set of .class files, produce a set of FQCN references present in that set. */
 internal class ClassFilesParser(
   private val classes: Set<File>,
+  private val jarFiles: Set<File>,
   buildDir: File
 ) : ClassReferenceParser(buildDir) {
 
   private val logger = getLogger<ClassFilesParser>()
 
   override fun parseBytecode(): Set<ExplodingBytecode> {
-    return classes.asSequenceOfClassFiles()
-      .map { classFile ->
-        val classFilePath = classFile.path
-        val explodedClass = classFile.inputStream().use {
+    return (classesExplodingBytecode() + jarsExplodingBytecode()).toSet()
+  }
+
+  private fun classesExplodingBytecode(): List<ExplodingBytecode> {
+    return classes.asSequenceOfClassFiles().map { classFile ->
+      val classFilePath = classFile.path
+      val explodedClass = classFile.inputStream().use {
+        BytecodeReader(it.readBytes(), logger, classFilePath).parse()
+      }
+
+      explodedClass.toExplodingBytecode(relativize(classFile))
+    }.toList()
+  }
+
+  private fun jarsExplodingBytecode(): List<ExplodingBytecode> {
+    return jarFiles.asSequence().map { file ->
+      val jarFile = JarFile(file)
+
+      jarFile.asSequenceOfClassFiles().map { classFileEntry ->
+        val classFilePath = Paths.get(file.path, classFileEntry.name).toString()
+        val classFileRelativePath = Paths.get(relativize(file), classFileEntry.name).toString()
+        val explodedClass = jarFile.getInputStream(classFileEntry).use {
           BytecodeReader(it.readBytes(), logger, classFilePath).parse()
         }
 
-        ExplodingBytecode(
-          relativePath = relativize(classFile),
-          className = explodedClass.className,
-          superClass = explodedClass.superClass,
-          interfaces = explodedClass.interfaces,
-          sourceFile = explodedClass.source,
-          nonAnnotationClasses = explodedClass.nonAnnotationClasses,
-          annotationClasses = explodedClass.annotationClasses,
-          invisibleAnnotationClasses = explodedClass.invisibleAnnotationClasses,
-          binaryClassAccesses = explodedClass.binaryClasses,
-        )
+        explodedClass.toExplodingBytecode(classFileRelativePath)
       }
-      .toSet()
+    }.flatten().toList()
+  }
+
+  private fun ExplodedClass.toExplodingBytecode(relativePath: String): ExplodingBytecode {
+    return ExplodingBytecode(
+      relativePath = relativePath,
+      className = className,
+      superClass = superClass,
+      interfaces = interfaces,
+      sourceFile = source,
+      nonAnnotationClasses = nonAnnotationClasses,
+      annotationClasses = annotationClasses,
+      invisibleAnnotationClasses = invisibleAnnotationClasses,
+      binaryClassAccesses = binaryClasses,
+    )
   }
 }
 
@@ -121,6 +146,8 @@ private class BytecodeReader(
       .filterNot { it.startsWith("java/") }
       // Filter out a "used class" that is exactly the class under analysis
       .filterNot { it == classAnalyzer.className }
+      // Filter out parent class name for inner classes
+      .filterNot { it.substringBefore('$') == classAnalyzer.className.substringBefore('$') }
       // More human-readable
       .map { canonicalize(it) }
       .toSortedSet()
@@ -135,6 +162,8 @@ private class BytecodeReader(
       .filterKeys { !it.startsWith("java/") }
       // Filter out a "used class" that is exactly the class under analysis
       .filterKeys { it != classAnalyzer.className }
+      // Filter out parent class name for inner classes
+      .filterKeys { it.substringBefore('$') != classAnalyzer.className.substringBefore('$') }
   }
 }
 
diff --git a/src/main/kotlin/com/autonomousapps/internal/kotlin/PublicApiDump.kt b/src/main/kotlin/com/autonomousapps/internal/kotlin/PublicApiDump.kt
index 4178db5b3..f9cbcbabc 100644
--- a/src/main/kotlin/com/autonomousapps/internal/kotlin/PublicApiDump.kt
+++ b/src/main/kotlin/com/autonomousapps/internal/kotlin/PublicApiDump.kt
@@ -38,9 +38,15 @@ internal fun getBinaryAPI(jar: JarFile, visibilityFilter: (String) -> Boolean =
 
 internal fun getBinaryAPI(
   classes: Set<File>,
+  jarFiles: Set<JarFile>,
   visibilityFilter: (String) -> Boolean = { true }
-): List<ClassBinarySignature> =
-  getBinaryAPI(classes.asSequence().map { it.inputStream() }, visibilityFilter)
+): List<ClassBinarySignature> {
+  val classesBinaryAPI = getBinaryAPI(classes.asSequence().map { it.inputStream() }, visibilityFilter)
+  val jarsBinaryAPI = jarFiles.flatMap { getBinaryAPI(it, visibilityFilter) }
+
+  return classesBinaryAPI + jarsBinaryAPI
+}
+
 
 internal fun getBinaryAPI(
   classStreams: Sequence<InputStream>,
diff --git a/src/main/kotlin/com/autonomousapps/internal/kotlin/abiDependencies.kt b/src/main/kotlin/com/autonomousapps/internal/kotlin/abiDependencies.kt
index 641a3071c..3db721cbd 100644
--- a/src/main/kotlin/com/autonomousapps/internal/kotlin/abiDependencies.kt
+++ b/src/main/kotlin/com/autonomousapps/internal/kotlin/abiDependencies.kt
@@ -9,12 +9,14 @@ import com.autonomousapps.internal.utils.allItems
 import com.autonomousapps.internal.utils.flatMapToSet
 import com.autonomousapps.model.internal.intermediates.consumer.ExplodingAbi
 import java.io.File
+import java.util.jar.JarFile
 
 internal fun computeAbi(
   classFiles: Set<File>,
+  jarFiles: Set<JarFile>,
   exclusions: AbiExclusions,
   abiDumpFile: File? = null
-): Set<ExplodingAbi> = getBinaryAPI(classFiles).explodedAbi(exclusions, abiDumpFile)
+): Set<ExplodingAbi> = getBinaryAPI(classFiles, jarFiles).explodedAbi(exclusions, abiDumpFile)
 
 private fun List<ClassBinarySignature>.explodedAbi(
   exclusions: AbiExclusions,
diff --git a/src/main/kotlin/com/autonomousapps/internal/utils/collections.kt b/src/main/kotlin/com/autonomousapps/internal/utils/collections.kt
index 6cdc7a150..44d2c6f7f 100644
--- a/src/main/kotlin/com/autonomousapps/internal/utils/collections.kt
+++ b/src/main/kotlin/com/autonomousapps/internal/utils/collections.kt
@@ -64,6 +64,10 @@ internal fun Iterable<File>.filterToClassFiles(): List<File> {
   return filter { it.extension == "class" && !it.name.endsWith("module-info.class") }
 }
 
+internal fun Iterable<File>.filterToJarFiles(): List<File> {
+  return filter { it.extension == "jar" }
+}
+
 /** Filters a [FileCollection] to contain only class files. */
 internal fun FileCollection.filterToClassFiles(): FileCollection {
   return filter {
diff --git a/src/main/kotlin/com/autonomousapps/tasks/AbiAnalysisTask.kt b/src/main/kotlin/com/autonomousapps/tasks/AbiAnalysisTask.kt
index 6d75b42d1..ca89d3069 100644
--- a/src/main/kotlin/com/autonomousapps/tasks/AbiAnalysisTask.kt
+++ b/src/main/kotlin/com/autonomousapps/tasks/AbiAnalysisTask.kt
@@ -10,6 +10,7 @@ import com.autonomousapps.internal.kotlin.computeAbi
 import com.autonomousapps.internal.utils.bufferWriteJsonSet
 import com.autonomousapps.internal.utils.filterToClassFiles
 import com.autonomousapps.internal.utils.fromJson
+import com.autonomousapps.internal.utils.mapToSet
 import com.autonomousapps.internal.utils.getAndDelete
 import org.gradle.api.file.ConfigurableFileCollection
 import org.gradle.api.file.RegularFileProperty
@@ -18,6 +19,7 @@ import org.gradle.api.tasks.*
 import org.gradle.workers.WorkAction
 import org.gradle.workers.WorkParameters
 import org.gradle.workers.WorkerExecutor
+import java.util.jar.JarFile
 import javax.inject.Inject
 
 @CacheableTask
@@ -52,6 +54,7 @@ abstract class AbiAnalysisTask @Inject constructor(
       classFiles.setFrom(classes.asFileTree.filterToClassFiles().files)
       // Android projects
       classFiles.from(androidClassFiles())
+      jarFiles.from(androidJarFiles())
 
       exclusions.set(this@AbiAnalysisTask.exclusions)
       output.set(this@AbiAnalysisTask.output)
@@ -61,6 +64,7 @@ abstract class AbiAnalysisTask @Inject constructor(
 
   interface AbiAnalysisParameters : WorkParameters {
     val classFiles: ConfigurableFileCollection
+    val jarFiles: ConfigurableFileCollection
     val exclusions: Property<String>
     val output: RegularFileProperty
     val abiDump: RegularFileProperty
@@ -73,9 +77,10 @@ abstract class AbiAnalysisTask @Inject constructor(
       val outputAbiDump = parameters.abiDump.getAndDelete()
 
       val classFiles = parameters.classFiles.files
+      val jarFiles = parameters.jarFiles.mapToSet { JarFile(it) }
       val exclusions = parameters.exclusions.orNull?.fromJson<AbiExclusions>() ?: AbiExclusions.NONE
 
-      val explodingAbi = computeAbi(classFiles, exclusions, outputAbiDump)
+      val explodingAbi = computeAbi(classFiles, jarFiles, exclusions, outputAbiDump)
 
       output.bufferWriteJsonSet(explodingAbi)
     }
diff --git a/src/main/kotlin/com/autonomousapps/tasks/AndroidClassesTask.kt b/src/main/kotlin/com/autonomousapps/tasks/AndroidClassesTask.kt
index de5540a3d..1a730cffa 100644
--- a/src/main/kotlin/com/autonomousapps/tasks/AndroidClassesTask.kt
+++ b/src/main/kotlin/com/autonomousapps/tasks/AndroidClassesTask.kt
@@ -3,6 +3,7 @@
 package com.autonomousapps.tasks
 
 import com.autonomousapps.internal.utils.filterToClassFiles
+import com.autonomousapps.internal.utils.filterToJarFiles
 import org.gradle.api.DefaultTask
 import org.gradle.api.file.Directory
 import org.gradle.api.file.RegularFile
@@ -20,7 +21,7 @@ import java.io.File
  */
 abstract class AndroidClassesTask : DefaultTask() {
 
-  /** Will be empty for this task. */
+  /** May be empty. */
   @get:PathSensitive(PathSensitivity.RELATIVE)
   @get:InputFiles
   abstract val jars: ListProperty<RegularFile>
@@ -34,4 +35,9 @@ abstract class AndroidClassesTask : DefaultTask() {
   protected fun androidClassFiles(): List<File> {
     return dirs.getOrElse(emptyList()).flatMap { it.asFileTree.files }.filterToClassFiles()
   }
+
+  /** Must be called during the execution phase. */
+  protected fun androidJarFiles(): List<File> {
+    return jars.getOrElse(emptyList()).map { it.asFile }.filterToJarFiles()
+  }
 }
diff --git a/src/main/kotlin/com/autonomousapps/tasks/ClassListExploderTask.kt b/src/main/kotlin/com/autonomousapps/tasks/ClassListExploderTask.kt
index 54517273f..645ea1a89 100644
--- a/src/main/kotlin/com/autonomousapps/tasks/ClassListExploderTask.kt
+++ b/src/main/kotlin/com/autonomousapps/tasks/ClassListExploderTask.kt
@@ -40,6 +40,7 @@ abstract class ClassListExploderTask @Inject constructor(
       classFiles.setFrom(classes.asFileTree.filterToClassFiles().files)
       // Android projects
       classFiles.from(androidClassFiles())
+      jarFiles.from(androidJarFiles())
 
       buildDir.set(layout.buildDirectory)
       output.set(this@ClassListExploderTask.output)
@@ -48,6 +49,7 @@ abstract class ClassListExploderTask @Inject constructor(
 
   interface ClassListExploderParameters : WorkParameters {
     val classFiles: ConfigurableFileCollection
+    val jarFiles: ConfigurableFileCollection
     val buildDir: DirectoryProperty
     val output: RegularFileProperty
   }
@@ -59,6 +61,7 @@ abstract class ClassListExploderTask @Inject constructor(
 
       val usedClasses = ClassFilesParser(
         classes = parameters.classFiles.asFileTree.files,
+        jarFiles = parameters.jarFiles.files,
         buildDir = parameters.buildDir.get().asFile,
       ).analyze()