diff --git a/main/src/main/scala/sbt/internal/server/BuildServerProtocol.scala b/main/src/main/scala/sbt/internal/server/BuildServerProtocol.scala
index 8f3b91801..35b3d4cf5 100644
--- a/main/src/main/scala/sbt/internal/server/BuildServerProtocol.scala
+++ b/main/src/main/scala/sbt/internal/server/BuildServerProtocol.scala
@@ -577,11 +577,22 @@ object BuildServerProtocol {
   }
 
   private def internalDependencyConfigurationsSetting = Def.settingDyn {
-    val directDependencies = Keys.internalDependencyConfigurations.value.map {
-      case (project, rawConfigs) =>
-        val configs = rawConfigs.flatMap(_.split(",")).map(name => ConfigKey(name.trim))
-        (project, configs)
-    }
+    val allScopes = bspWorkspace.value.map { case (_, scope) => scope }.toSet
+    val directDependencies = Keys.internalDependencyConfigurations.value
+      .map {
+        case (project, rawConfigs) =>
+          val configs = rawConfigs
+            .flatMap(_.split(","))
+            .map(name => ConfigKey(name.trim))
+            .filter { config =>
+              val scope = Scope.Global.in(project, config)
+              allScopes.contains(scope)
+            }
+          (project, configs)
+      }
+      .filter {
+        case (_, configs) => configs.nonEmpty
+      }
     val ref = Keys.thisProjectRef.value
     val thisConfig = Keys.configuration.value
     val transitiveDependencies = for {
@@ -589,7 +600,8 @@ object BuildServerProtocol {
       config <- configs if dep != ref || config.name != thisConfig.name
     } yield Keys.bspInternalDependencyConfigurations.in(dep, config)
     Def.setting {
-      val allDependencies = directDependencies ++ transitiveDependencies.join.value.flatten
+      val allDependencies = directDependencies ++
+        transitiveDependencies.join.value.flatten
       allDependencies
         .groupBy(_._1)
         .mapValues { deps =>
diff --git a/sbt/src/sbt-test/dependency-management/custom-config/build.sbt b/sbt/src/sbt-test/dependency-management/custom-config/build.sbt
new file mode 100644
index 000000000..427d4c5fe
--- /dev/null
+++ b/sbt/src/sbt-test/dependency-management/custom-config/build.sbt
@@ -0,0 +1,49 @@
+// Custom configurations
+lazy val Common = config("common").describedAs("Dependencies required in all configurations.")
+lazy val Scalate = config("scalate").extend(Common).describedAs("Dependencies for using Scalate utilities.")
+lazy val Saxon = config("saxon").extend(Common).describedAs("Dependencies for using Saxon utilities.")
+
+// Define a customized compile configuration that includes
+// dependencies defined in our other custom configurations
+lazy val CustomCompile = config("compile").extend(Saxon, Common, Scalate)
+
+// factor out common settings
+ThisBuild / organization := "com.example"
+ThisBuild / scalaVersion := "2.10.6"
+ThisBuild / version      := "0.1.0-SNAPSHOT"
+
+// An example project that only uses the Scalate utilities.
+lazy val a = (project in file("a"))
+  .dependsOn(utils % "compile->scalate")
+
+// An example project that uses the Scalate and Saxon utilities.
+// For the configurations defined here, this is equivalent to doing dependsOn(utils),
+//  but if there were more configurations, it would select only the Scalate and Saxon
+//  dependencies.
+lazy val b = (project in file("b"))
+  .dependsOn(utils % "compile->scalate,saxon")
+
+// Defines the utilities project
+lazy val utils = (project in file("utils"))
+  .settings(
+    inConfig(Common)(Defaults.configSettings),  // Add the src/common/scala/ compilation configuration.
+    addArtifact(Common / packageBin / artifact, Common / packageBin), // Publish the common artifact
+
+    // We want our Common sources to have access to all of the dependencies on the classpaths
+    //   for compile and test, but when depended on, it should only require dependencies in 'common'
+    Common / classpathConfiguration := CustomCompile,
+
+    // Modify the default Ivy configurations.
+    // 'overrideConfigs' ensures that Compile is replaced by CustomCompile
+    ivyConfigurations := overrideConfigs(Scalate, Saxon, Common, CustomCompile)(ivyConfigurations.value),
+
+    // Put all dependencies without an explicit configuration into Common (optional)
+    defaultConfiguration := Some(Common),
+
+    // Declare dependencies in the appropriate configurations
+    libraryDependencies ++= Seq(
+      "org.fusesource.scalate" % "scalate-core" % "1.5.0" % Scalate,
+      "org.squeryl" %% "squeryl" % "0.9.5-6" % Scalate,
+      "net.sf.saxon" % "saxon" % "8.7" % Saxon
+    )
+  )
diff --git a/sbt/src/sbt-test/dependency-management/custom-config/test b/sbt/src/sbt-test/dependency-management/custom-config/test
new file mode 100644
index 000000000..477407e68
--- /dev/null
+++ b/sbt/src/sbt-test/dependency-management/custom-config/test
@@ -0,0 +1 @@
+> name