diff --git a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinSpecificDependenciesIT.kt b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinSpecificDependenciesIT.kt
index a3facb0e633..43647fe1cc6 100644
--- a/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinSpecificDependenciesIT.kt
+++ b/libraries/tools/kotlin-gradle-plugin-integration-tests/src/test/kotlin/org/jetbrains/kotlin/gradle/KotlinSpecificDependenciesIT.kt
@@ -211,7 +211,7 @@ class KotlinSpecificDependenciesIT : KGPBaseTest() {
                 """.trimMargin()
             )
 
-            buildAndFail("checkDebugDuplicateClasses", forceOutput = true) {
+            buildAndFail("checkDebugDuplicateClasses") {
                 assertOutputContains("Duplicate class kotlin.internal.jdk8.JDK8PlatformImplementations")
             }
         }
@@ -243,6 +243,87 @@ class KotlinSpecificDependenciesIT : KGPBaseTest() {
         }
     }
 
+    @JvmGradlePluginTests
+    @DisplayName("KT-54653: stdlib-jdk7, jdk8 substitution should not work for unrelated configuration")
+    @GradleTest
+    fun stdlibJdkVariantsSubstitutionOnlyConfiguration(gradleVersion: GradleVersion) {
+        project("simpleProject", gradleVersion) {
+            buildGradle.modify {
+                """
+                |$it
+                |
+                |// Stdlib-jdk8 version should be <1.8.0
+                |configurations.create("specificDeps")
+                |
+                |dependencies {
+                |    specificDeps "org.jetbrains.kotlin:kotlin-stdlib-jdk8:1.7.20"
+                |    implementation "org.jetbrains.kotlin:kotlin-stdlib:${buildOptions.kotlinVersion}"
+                |}
+                """.trimMargin()
+            }
+
+            build("dependencies") {
+                assertOutputDoesNotContain(
+                    """
+                    |
+                    |specificDeps
+                    |\--- org.jetbrains.kotlin:kotlin-stdlib-jdk8:1.7.20 -> org.jetbrains.kotlin:kotlin-stdlib:1.7.20
+                    |     +--- org.jetbrains.kotlin:kotlin-stdlib-common:1.7.20
+                    |     \--- org.jetbrains:annotations:13.0
+                    """.trimMargin()
+                )
+            }
+        }
+    }
+
+    @JvmGradlePluginTests
+    @DisplayName("KT-54653: stdlib-jdk7, jdk8 substitution works for complex resolvable configurations hierarchy")
+    @GradleTest
+    fun stdlibJdkVariantSubstitutionComplexResolvableConfiguration(gradleVersion: GradleVersion) {
+        project("simpleProject", gradleVersion) {
+            buildGradle.modify {
+                """
+                |$it
+                |
+                |// Stdlib-jdk8 version should be <1.8.0
+                |def specificDepsConf = configurations.create("specificDeps") {
+                |    setCanBeResolved(true)
+                |}
+                |
+                |configurations.create("specificDepsChild") {
+                |    setCanBeResolved(true)
+                |    extendsFrom specificDepsConf
+                |}
+                |
+                |dependencies {
+                |    specificDeps "org.jetbrains.kotlin:kotlin-stdlib:${buildOptions.kotlinVersion}"
+                |    // brings transitevly older stdlib-jdk7,8 dependencies
+                |    specificDepsChild "org.jetbrains.kotlinx:kotlinx-coroutines-core:1.5.2"
+                |}
+                """.trimMargin()
+            }
+
+            build("dependencies") {
+                assertOutputDoesNotContain(
+                    """
+                    |
+                    |specificDepsChild
+                    |+--- org.jetbrains.kotlin:kotlin-stdlib:${buildOptions.kotlinVersion}
+                    ||    +--- org.jetbrains.kotlin:kotlin-stdlib-common:${buildOptions.kotlinVersion}
+                    ||    \--- org.jetbrains:annotations:13.0
+                    |\--- org.jetbrains.kotlinx:kotlinx-coroutines-core:1.5.2
+                    |     \--- org.jetbrains.kotlinx:kotlinx-coroutines-core-jvm:1.5.2
+                    |          +--- org.jetbrains.kotlin:kotlin-stdlib-jdk8:1.5.30
+                    |          |    +--- org.jetbrains.kotlin:kotlin-stdlib:1.5.30 -> ${buildOptions.kotlinVersion} (*)
+                    |          |    \--- org.jetbrains.kotlin:kotlin-stdlib-jdk7:1.5.30
+                    |          |         \--- org.jetbrains.kotlin:kotlin-stdlib:1.5.30 -> ${buildOptions.kotlinVersion} (*)
+                    |          \--- org.jetbrains.kotlin:kotlin-stdlib-common:1.5.30 -> ${buildOptions.kotlinVersion}
+                    """.trimMargin()
+                )
+            }
+        }
+    }
+
     @MppGradlePluginTests
     @DisplayName("MPP: kotlin-stdlib is added by default")
     @GradleTest
diff --git a/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/KotlinDependenciesManagement.kt b/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/KotlinDependenciesManagement.kt
index 2d1b7dd1635..b0b1677348c 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/KotlinDependenciesManagement.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/KotlinDependenciesManagement.kt
@@ -48,7 +48,7 @@ internal fun customizeKotlinDependencies(project: Project) {
     )
 
     if (propertiesProvider.stdlibJdkVariantsSubstitution) {
-        project.configurations.configureStdlibSubstitution(project.dependencies)
+        project.configurations.configureStdlibSubstitution()
     }
 
     excludeStdlibAndKotlinTestCommonFromPlatformCompilations(project)
diff --git a/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/stdlibDependencyManagement.kt b/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/stdlibDependencyManagement.kt
index dced67e4665..fd3b90f3f47 100644
--- a/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/stdlibDependencyManagement.kt
+++ b/libraries/tools/kotlin-gradle-plugin/src/common/kotlin/org/jetbrains/kotlin/gradle/internal/stdlibDependencyManagement.kt
@@ -6,6 +6,7 @@
 package org.jetbrains.kotlin.gradle.internal
 
 import org.gradle.api.Project
+import org.gradle.api.artifacts.Configuration
 import org.gradle.api.artifacts.ConfigurationContainer
 import org.gradle.api.artifacts.ExternalDependency
 import org.gradle.api.artifacts.dsl.DependencyHandler
@@ -53,9 +54,7 @@ internal fun Project.configureStdlibDefaultDependency(
  * Replacing kotlin-stdlib-jdk8 and kotlin-stdlib-jdk7 artifacts with kotlin-stdlib
  * when project stdlib version is >= 1.8.0
  */
-internal fun ConfigurationContainer.configureStdlibSubstitution(
-    dependencies: DependencyHandler
-) = all { configuration ->
+internal fun ConfigurationContainer.configureStdlibSubstitution() = all { configuration ->
     configuration.withDependencies { dependencySet ->
         dependencySet
             .withType<ExternalDependency>()
@@ -65,25 +64,33 @@ internal fun ConfigurationContainer.configureStdlibSubstitution(
                     dependency.version != null &&
                     SemVer.from(dependency.version!!) >= kotlin180Version
                 ) {
-                    dependencies.modules { componentModuleMetadataHandler ->
-                        componentModuleMetadataHandler.module("org.jetbrains.kotlin:kotlin-stdlib-jdk7") {
-                            it.replacedBy(
-                                "org.jetbrains.kotlin:kotlin-stdlib",
-                                "kotlin-stdlib-jdk7 is now part of kotlin-stdlib"
-                            )
-                        }
-                        componentModuleMetadataHandler.module("org.jetbrains.kotlin:kotlin-stdlib-jdk8") {
-                            it.replacedBy(
-                                "org.jetbrains.kotlin:kotlin-stdlib",
-                                "kotlin-stdlib-jdk8 is now part of kotlin-stdlib"
-                            )
-                        }
+                    if (configuration.isCanBeResolved) configuration.substitudeStdlibJvmVariants(dependency)
+
+                    // dependency substitution only works for resolvable configuration,
+                    // so we need to find all configuration that extends current one
+                    filter {
+                        it.isCanBeResolved && it.hierarchy.contains(configuration)
+                    }.forEach {
+                        it.substitudeStdlibJvmVariants(dependency)
                     }
                 }
             }
     }
 }
 
+private fun Configuration.substitudeStdlibJvmVariants(
+    kotlinStdlibDependency: ExternalDependency
+) {
+    resolutionStrategy.dependencySubstitution {
+        it.substitute(it.module("org.jetbrains.kotlin:kotlin-stdlib-jdk7"))
+            .using(it.module("org.jetbrains.kotlin:kotlin-stdlib:${kotlinStdlibDependency.version}"))
+            .because("kotlin-stdlib-jdk7 is now part of kotlin-stdlib")
+        it.substitute(it.module("org.jetbrains.kotlin:kotlin-stdlib-jdk8"))
+            .using(it.module("org.jetbrains.kotlin:kotlin-stdlib:${kotlinStdlibDependency.version}"))
+            .because("kotlin-stdlib-jdk8 is now part of kotlin-stdlib")
+    }
+}
+
 private fun addStdlibToKpmProject(
     project: Project,
     coreLibrariesVersion: Provider<String>