diff --git a/src/DynamicData.Tests/API/ApiApprovalTests.DynamicDataTests.DotNet8_0.verified.txt b/src/DynamicData.Tests/API/ApiApprovalTests.DynamicDataTests.DotNet8_0.verified.txt
index 5aa67a234..54782cbd8 100644
--- a/src/DynamicData.Tests/API/ApiApprovalTests.DynamicDataTests.DotNet8_0.verified.txt
+++ b/src/DynamicData.Tests/API/ApiApprovalTests.DynamicDataTests.DotNet8_0.verified.txt
@@ -2039,6 +2039,14 @@ namespace DynamicData
             where TDestination :  class
             where TSource :  notnull
             where TKey :  notnull { }
+        public static System.IObservable<DynamicData.IChangeSet<TDestination, TKey>> TransformWithInlineUpdate<TDestination, TSource, TKey>(this System.IObservable<DynamicData.IChangeSet<TSource, TKey>> source, System.Func<TSource, TDestination> transformFactory, System.Action<TDestination, TSource> updateAction, bool transformOnRefresh)
+            where TDestination :  class
+            where TSource :  notnull
+            where TKey :  notnull { }
+        public static System.IObservable<DynamicData.IChangeSet<TDestination, TKey>> TransformWithInlineUpdate<TDestination, TSource, TKey>(this System.IObservable<DynamicData.IChangeSet<TSource, TKey>> source, System.Func<TSource, TDestination> transformFactory, System.Action<TDestination, TSource> updateAction, System.Action<DynamicData.Kernel.Error<TSource, TKey>> errorHandler, bool transformOnRefresh)
+            where TDestination :  class
+            where TSource :  notnull
+            where TKey :  notnull { }
         public static System.IObservable<DynamicData.ISortedChangeSet<TObject, TKey>> TreatMovesAsRemoveAdd<TObject, TKey>(this System.IObservable<DynamicData.ISortedChangeSet<TObject, TKey>> source)
             where TObject :  notnull
             where TKey :  notnull { }
diff --git a/src/DynamicData.Tests/Cache/TransformWithInlineUpdateFixture.cs b/src/DynamicData.Tests/Cache/TransformWithInlineUpdateFixture.cs
index 170ffadf2..88249e34a 100644
--- a/src/DynamicData.Tests/Cache/TransformWithInlineUpdateFixture.cs
+++ b/src/DynamicData.Tests/Cache/TransformWithInlineUpdateFixture.cs
@@ -76,9 +76,34 @@ public void Remove()
         stub.Results.Data.Count.Should().Be(0, "Should be nothing cached");
     }
 
+
+    [Fact]
+    public void TransformOnRefresh()
+    {
+        using var stub = new TransformWithInlineUpdateFixtureStub(true);
+        var person = new Person("Adult1", 50);
+        stub.Source.AddOrUpdate(person);
+
+        var transformedPerson = stub.Results.Data.Items.First();
+
+        person.Age = 51;
+        stub.Source.Refresh(person);
+
+        var updatedTransform = stub.Results.Data.Items.First();
+
+        updatedTransform.Age.Should().Be(51, "Age should be updated from 50 to 51.");
+        stub.Results.Messages.Count.Should().Be(2, "Should be 2 updates");
+        stub.Results.Data.Count.Should().Be(1, "Should be 1 item in the cache");
+        transformedPerson.Should().Be(stub.Results.Data.Items.First(), "Should be same transformed person instance.");
+    }
+
     private class TransformWithInlineUpdateFixtureStub : IDisposable
     {
-        public TransformWithInlineUpdateFixtureStub() => Results = new ChangeSetAggregator<Person, string>(Source.Connect().TransformWithInlineUpdate(TransformFactory, UpdateAction));
+        public TransformWithInlineUpdateFixtureStub(bool transformOnRefresh = false)
+        {
+            Results = new ChangeSetAggregator<Person, string>(Source.Connect()
+                .TransformWithInlineUpdate(TransformFactory, UpdateAction, transformOnRefresh));
+        }
 
         public ChangeSetAggregator<Person, string> Results { get; }
 
diff --git a/src/DynamicData/Cache/Internal/TransformWithInlineUpdate.cs b/src/DynamicData/Cache/Internal/TransformWithInlineUpdate.cs
index 0d747a43a..8efde6da3 100644
--- a/src/DynamicData/Cache/Internal/TransformWithInlineUpdate.cs
+++ b/src/DynamicData/Cache/Internal/TransformWithInlineUpdate.cs
@@ -11,7 +11,8 @@ namespace DynamicData.Cache.Internal;
 internal sealed class TransformWithInlineUpdate<TDestination, TSource, TKey>(IObservable<IChangeSet<TSource, TKey>> source,
                                  Func<TSource, TDestination> transformFactory,
                                  Action<TDestination, TSource> updateAction,
-                                 Action<Error<TSource, TKey>>? exceptionCallback = null)
+                                 Action<Error<TSource, TKey>>? exceptionCallback = null,
+                                 bool transformOnRefresh = false)
     where TDestination : class
     where TSource : notnull
     where TKey : notnull
@@ -41,7 +42,15 @@ private IObservable<IChangeSet<TDestination, TKey>> RunImpl() => source.Scan(
                                 break;
 
                             case ChangeReason.Refresh:
-                                cache.Refresh(change.Key);
+                                if (transformOnRefresh)
+                                {
+                                    InlineUpdate(cache, change);
+                                }
+                                else
+                                {
+                                    cache.Refresh(change.Key);
+                                }
+
                                 break;
 
                             case ChangeReason.Moved:
diff --git a/src/DynamicData/Cache/ObservableCacheEx.cs b/src/DynamicData/Cache/ObservableCacheEx.cs
index d933c83b3..b33f1b845 100644
--- a/src/DynamicData/Cache/ObservableCacheEx.cs
+++ b/src/DynamicData/Cache/ObservableCacheEx.cs
@@ -5914,7 +5914,35 @@ public static IObservable<IChangeSet<TDestination, TKey>> TransformWithInlineUpd
         transformFactory.ThrowArgumentNullExceptionIfNull(nameof(transformFactory));
         updateAction.ThrowArgumentNullExceptionIfNull(nameof(updateAction));
 
-        return new TransformWithInlineUpdate<TDestination, TSource, TKey>(source, transformFactory, updateAction).Run();
+        return source.TransformWithInlineUpdate(transformFactory, updateAction, false);
+    }
+
+    /// <summary>
+    /// Projects each update item to a new form using the specified transform function and when an update is received, allows the preservation of the previous instance.
+    /// </summary>
+    /// <typeparam name="TDestination">The type of the destination.</typeparam>
+    /// <typeparam name="TSource">The type of the source.</typeparam>
+    /// <typeparam name="TKey">The type of the key.</typeparam>
+    /// <param name="source">The source.</param>
+    /// <param name="transformFactory">The transform factory.</param>
+    /// <param name="updateAction">Apply changes to the original. Example (previousTransformedItem, newOriginalItem) => previousTransformedItem.Value = newOriginalItem.</param>
+    /// <param name="transformOnRefresh">Should a new transform be applied when a refresh event is received.</param>
+    /// <returns>
+    /// A transformed update collection.
+    /// </returns>
+    /// <exception cref="ArgumentNullException">source
+    /// or
+    /// transformFactory.</exception>
+    public static IObservable<IChangeSet<TDestination, TKey>> TransformWithInlineUpdate<TDestination, TSource, TKey>(this IObservable<IChangeSet<TSource, TKey>> source, Func<TSource, TDestination> transformFactory, Action<TDestination, TSource> updateAction, bool transformOnRefresh)
+        where TDestination : class
+        where TSource : notnull
+        where TKey : notnull
+    {
+        source.ThrowArgumentNullExceptionIfNull(nameof(source));
+        transformFactory.ThrowArgumentNullExceptionIfNull(nameof(transformFactory));
+        updateAction.ThrowArgumentNullExceptionIfNull(nameof(updateAction));
+
+        return new TransformWithInlineUpdate<TDestination, TSource, TKey>(source, transformFactory, updateAction, transformOnRefresh: transformOnRefresh).Run();
     }
 
     /// <summary>
@@ -5943,7 +5971,37 @@ public static IObservable<IChangeSet<TDestination, TKey>> TransformWithInlineUpd
         updateAction.ThrowArgumentNullExceptionIfNull(nameof(updateAction));
         errorHandler.ThrowArgumentNullExceptionIfNull(nameof(errorHandler));
 
-        return new TransformWithInlineUpdate<TDestination, TSource, TKey>(source, transformFactory, updateAction, errorHandler).Run();
+        return source.TransformWithInlineUpdate(transformFactory, updateAction, errorHandler, false);
+    }
+
+    /// <summary>
+    /// Projects each update item to a new form using the specified transform function and when an update is received, allows the preservation of the previous instance.
+    /// </summary>
+    /// <typeparam name="TDestination">The type of the destination.</typeparam>
+    /// <typeparam name="TSource">The type of the source.</typeparam>
+    /// <typeparam name="TKey">The type of the key.</typeparam>
+    /// <param name="source">The source.</param>
+    /// <param name="transformFactory">The transform factory.</param>
+    /// <param name="updateAction">Apply changes to the original. Example (previousTransformedItem, newOriginalItem) => previousTransformedItem.Value = newOriginalItem.</param>
+    /// <param name="errorHandler">The error handler.</param>
+    /// <param name="transformOnRefresh">Should a new transform be applied when a refresh event is received.</param>
+    /// <returns>
+    /// A transformed update collection.
+    /// </returns>
+    /// <exception cref="ArgumentNullException">source
+    /// or
+    /// transformFactory.</exception>
+    public static IObservable<IChangeSet<TDestination, TKey>> TransformWithInlineUpdate<TDestination, TSource, TKey>(this IObservable<IChangeSet<TSource, TKey>> source, Func<TSource, TDestination> transformFactory, Action<TDestination, TSource> updateAction, Action<Error<TSource, TKey>> errorHandler, bool transformOnRefresh)
+        where TDestination : class
+        where TSource : notnull
+        where TKey : notnull
+    {
+        source.ThrowArgumentNullExceptionIfNull(nameof(source));
+        transformFactory.ThrowArgumentNullExceptionIfNull(nameof(transformFactory));
+        updateAction.ThrowArgumentNullExceptionIfNull(nameof(updateAction));
+        errorHandler.ThrowArgumentNullExceptionIfNull(nameof(errorHandler));
+
+        return new TransformWithInlineUpdate<TDestination, TSource, TKey>(source, transformFactory, updateAction, errorHandler, transformOnRefresh).Run();
     }
 
     /// <summary>