diff --git a/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentCodeGen.kt b/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentCodeGen.kt
index 05d795ecb..d9a1b487e 100644
--- a/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentCodeGen.kt
+++ b/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentCodeGen.kt
@@ -208,9 +208,13 @@ internal object ContributesSubcomponentCodeGen : AnvilApplicabilityChecker {
         .filter { it.isAbstract }
         .toList()
 
-      if (functions.size != 1 || functions[0].returnType?.resolve()
-          ?.resolveKSClassDeclaration() != this
-      ) {
+      val returnType = functions.singleOrNull()?.returnType?.resolve()?.resolveKSClassDeclaration()
+      if (returnType != this) {
+
+        val isReturnSuperType = returnType != null && this.superTypes
+          .any { type -> type.resolve().resolveKSClassDeclaration() == returnType }
+        if (isReturnSuperType) return
+
         throw KspAnvilException(
           node = factory,
           message = "A factory must have exactly one abstract function returning the " +
@@ -393,6 +397,11 @@ internal object ContributesSubcomponentCodeGen : AnvilApplicabilityChecker {
         ?.asClassReference()
 
       if (returnType != this) {
+
+        val isReturnSuperType = returnType != null && this.directSuperTypeReferences()
+          .any { it.asClassReference() == returnType }
+        if (isReturnSuperType) return
+
         throw AnvilCompilationExceptionClassReference(
           classReference = factory,
           message = "A factory must have exactly one abstract function returning the " +
diff --git a/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentHandlerGenerator.kt b/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentHandlerGenerator.kt
index 814292ed2..c5396754e 100644
--- a/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentHandlerGenerator.kt
+++ b/compiler/src/main/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentHandlerGenerator.kt
@@ -340,6 +340,10 @@ internal class ContributesSubcomponentHandlerGenerator(
           )
         }
 
+        val superTypes by lazy {
+          contribution.clazz.directSuperTypeReferences()
+            .map { it.asClassReference() }
+        }
         val createComponentFunctions = factory.memberFunctions
           // filter by `isAbstract` even for interfaces,
           // otherwise we get `toString()`, `equals()`, and `hashCode()`.
@@ -349,7 +353,7 @@ internal class ContributesSubcomponentHandlerGenerator(
               ?.asClassReference()
               ?: return@filter false
 
-            returnType.fqName == contributionFqName
+            returnType.fqName == contributionFqName || superTypes.any { it == returnType }
           }
 
         if (createComponentFunctions.size != 1) {
diff --git a/compiler/src/test/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentGeneratorTest.kt b/compiler/src/test/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentGeneratorTest.kt
index 95b52152a..2de7c3e54 100644
--- a/compiler/src/test/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentGeneratorTest.kt
+++ b/compiler/src/test/java/com/squareup/anvil/compiler/codegen/ContributesSubcomponentGeneratorTest.kt
@@ -110,7 +110,7 @@ class ContributesSubcomponentGeneratorTest(
     }
   }
 
-  @Test fun `there is a hint for contributed subcomponents with an interace factory`() {
+  @Test fun `there is a hint for contributed subcomponents with an interface factory`() {
     compile(
       """
       package com.squareup.test
@@ -571,6 +571,46 @@ class ContributesSubcomponentGeneratorTest(
     }
   }
 
+  @Test fun `a factory function may returns the component super type`() {
+    compile(
+      """
+        package com.squareup.test
+
+        import com.squareup.anvil.annotations.ContributesSubcomponent
+        import com.squareup.anvil.annotations.ContributesSubcomponent.Factory
+        import com.squareup.anvil.annotations.ContributesTo
+        import com.squareup.anvil.annotations.MergeComponent
+
+        interface BaseSubcomponentInterface {
+            interface Factory {
+                fun createComponent(): BaseSubcomponentInterface
+            }
+        }
+
+        @ContributesSubcomponent(Any::class, parentScope = Unit::class)
+        interface SubcomponentInterface : BaseSubcomponentInterface {
+          @Factory
+          interface ComponentFactory: BaseSubcomponentInterface.Factory
+
+          @ContributesTo(Unit::class)
+          interface ParentComponent {
+            fun createFactory(): ComponentFactory
+          }
+        }
+
+        @MergeComponent(Unit::class)
+        interface ComponentInterface
+      """,
+      mode = mode,
+    ) {
+      assertThat(subcomponentInterface.hintSubcomponent?.java).isEqualTo(subcomponentInterface)
+      assertThat(subcomponentInterface.hintSubcomponentParentScope).isEqualTo(Unit::class)
+
+      assertThat(subcomponentInterface.componentFactoryInterface.methods.map { it.name })
+        .containsExactly("createComponent")
+    }
+  }
+
   @Test
   fun `using Dagger's @Subcomponent_Factory is an error`() {
     compile(
diff --git a/sample/app/src/test/java/com/squareup/anvil/sample/UserComponentTest.kt b/sample/app/src/test/java/com/squareup/anvil/sample/UserComponentTest.kt
new file mode 100644
index 000000000..c074e080a
--- /dev/null
+++ b/sample/app/src/test/java/com/squareup/anvil/sample/UserComponentTest.kt
@@ -0,0 +1,15 @@
+package com.squareup.anvil.sample
+
+import org.junit.Test
+
+class UserComponentTest {
+
+  @Test fun `UserComponent is generated`() {
+    val parent = DaggerAppComponent.create() as UserComponent.Parent
+    val baseComponent = parent.user().create()
+    val userComponent = baseComponent as UserComponent
+
+    assert(baseComponent.description() == UserDescriptionModule.provideDescription())
+    assert(userComponent.username() == UserDescriptionModule.provideName())
+  }
+}
diff --git a/sample/library/src/main/java/com/squareup/anvil/sample/UserComponent.kt b/sample/library/src/main/java/com/squareup/anvil/sample/UserComponent.kt
new file mode 100644
index 000000000..cf58df92d
--- /dev/null
+++ b/sample/library/src/main/java/com/squareup/anvil/sample/UserComponent.kt
@@ -0,0 +1,47 @@
+package com.squareup.anvil.sample
+
+import com.squareup.anvil.annotations.ContributesSubcomponent
+import com.squareup.anvil.annotations.ContributesTo
+import com.squareup.scopes.AppScope
+import com.squareup.scopes.UserScope
+import dagger.Module
+import dagger.Provides
+import javax.inject.Named
+
+interface UserDescriptionProvider {
+  @Named("userDesc")
+  fun description(): String
+}
+
+@ContributesTo(UserScope::class)
+@Module
+object UserDescriptionModule {
+
+  @Named("userName")
+  @Provides
+  fun provideName(): String = "Anvil User"
+
+  @Named("userDesc")
+  @Provides
+  fun provideDescription(): String = "User description"
+}
+
+@ContributesSubcomponent(
+  scope = UserScope::class,
+  parentScope = AppScope::class,
+)
+interface UserComponent : UserDescriptionProvider {
+
+  @Named("userName")
+  fun username(): String
+
+  @ContributesSubcomponent.Factory
+  interface Factory {
+    fun create(): UserDescriptionProvider
+  }
+
+  @ContributesTo(AppScope::class)
+  interface Parent {
+    fun user(): Factory
+  }
+}
diff --git a/sample/scopes/src/main/java/com/squareup/scopes/AppScope.kt b/sample/scopes/src/main/java/com/squareup/scopes/AppScope.kt
index 85adffeef..b3c1eaa29 100644
--- a/sample/scopes/src/main/java/com/squareup/scopes/AppScope.kt
+++ b/sample/scopes/src/main/java/com/squareup/scopes/AppScope.kt
@@ -1,3 +1,5 @@
 package com.squareup.scopes
 
 abstract class AppScope private constructor()
+
+abstract class UserScope private constructor()