diff --git a/src/systems/abstractsystem.jl b/src/systems/abstractsystem.jl
index 3187bad240..ab5c459a77 100644
--- a/src/systems/abstractsystem.jl
+++ b/src/systems/abstractsystem.jl
@@ -704,6 +704,15 @@ function has_observed_with_lhs(sys, sym)
     end
 end
 
+function has_parameter_dependency_with_lhs(sys, sym)
+    has_parameter_dependencies(sys) || return false
+    if has_index_cache(sys) && (ic = get_index_cache(sys)) !== nothing
+        return any(isequal(sym), ic.dependent_pars)
+    else
+        return any(isequal(sym), [eq.lhs for eq in parameter_dependencies(sys)])
+    end
+end
+
 function _all_ts_idxs!(ts_idxs, ::NotSymbolic, sys, sym)
     if is_variable(sys, sym) || is_independent_variable(sys, sym)
         push!(ts_idxs, ContinuousTimeseries())
diff --git a/src/systems/diffeqs/abstractodesystem.jl b/src/systems/diffeqs/abstractodesystem.jl
index f9f4d6ad6f..06b6ca5074 100644
--- a/src/systems/diffeqs/abstractodesystem.jl
+++ b/src/systems/diffeqs/abstractodesystem.jl
@@ -860,13 +860,23 @@ function process_DEProblem(constructor, sys::AbstractODESystem, u0map, parammap;
         solvablepars = [p
                         for p in parameters(sys)
                         if is_parameter_solvable(p, parammap, defs, guesses)]
+
+        pvarmap = if parammap === nothing || parammap == SciMLBase.NullParameters() || !(eltype(parammap) <: Pair) && isempty(parammap)
+            defs
+        else
+            merge(defs, todict(parammap))
+        end
+        setparobserved = filter(keys(pvarmap)) do var
+            has_parameter_dependency_with_lhs(sys, var)
+        end
     else
         solvablepars = ()
+        setparobserved = ()
     end
     # ModelingToolkit.get_tearing_state(sys) !== nothing => Requires structural_simplify first
     if sys isa ODESystem && build_initializeprob &&
        (((implicit_dae || !isempty(missingvars) || !isempty(solvablepars) ||
-          !isempty(setobserved)) &&
+          !isempty(setobserved) || !isempty(setparobserved)) &&
          ModelingToolkit.get_tearing_state(sys) !== nothing) ||
         !isempty(initialization_equations(sys))) && t !== nothing
         if eltype(u0map) <: Number
diff --git a/src/systems/nonlinear/initializesystem.jl b/src/systems/nonlinear/initializesystem.jl
index e001bd9cb4..b79c307876 100644
--- a/src/systems/nonlinear/initializesystem.jl
+++ b/src/systems/nonlinear/initializesystem.jl
@@ -146,6 +146,22 @@ function generate_initializesystem(sys::ODESystem;
             end
         end
     end
+
+    # parameter dependencies become equations, their LHS become unknowns
+    for eq in parameter_dependencies(sys)
+        varp = tovar(eq.lhs)
+        paramsubs[eq.lhs] = varp
+        push!(eqs_ics, eq)
+        guessval = get(guesses, eq.lhs, eq.rhs)
+        push!(u0, varp => guessval)
+    end
+
+    # handle values provided for dependent parameters
+    for (k, v) in merge(defaults(sys), pmap)
+        if has_parameter_dependency_with_lhs(sys, k)
+            push!(eqs_ics, paramsubs[k] ~ v)
+        end
+    end
     pars = vcat(
         [get_iv(sys)],
         [p for p in parameters(sys) if !haskey(paramsubs, p)]
@@ -153,12 +169,11 @@ function generate_initializesystem(sys::ODESystem;
     nleqs = [eqs_ics; observed(sys)]
     nleqs = Symbolics.substitute.(nleqs, (paramsubs,))
     unks = [full_states; collect(values(paramsubs))]
-
+    u0 = Dict(k => substitute(v, paramsubs) for (k, v) in u0)
     sys_nl = NonlinearSystem(nleqs,
         unks,
         pars;
         defaults = merge(ModelingToolkit.defaults(sys), todict(u0), dd_guess, pmap),
-        parameter_dependencies = parameter_dependencies(sys),
         checks = check_units,
         name,
         kwargs...)
@@ -205,8 +220,12 @@ function SciMLBase.remake_initializeprob(sys::ODESystem, odefn, u0, t0, p)
     solvablepars = [par
                     for par in parameters(sys)
                     if is_parameter_solvable(par, p, defs, guesses)]
+    pvarmap = merge(defs, p)
+    setparobserved = filter(keys(pvarmap)) do var
+        has_parameter_dependency_with_lhs(sys, var)
+    end
     if (((!isempty(missingvars) || !isempty(solvablepars) ||
-          !isempty(setobserved)) &&
+          !isempty(setobserved) || !isempty(setparobserved)) &&
          ModelingToolkit.get_tearing_state(sys) !== nothing) ||
         !isempty(initialization_equations(sys)))
         initprob = InitializationProblem(sys, t0, u0, p)