diff --git a/e2e/cases/bin-to-bin-deps/BUILD.bazel b/e2e/cases/bin-to-bin-deps/BUILD.bazel
new file mode 100644
index 00000000..c4e12216
--- /dev/null
+++ b/e2e/cases/bin-to-bin-deps/BUILD.bazel
@@ -0,0 +1,32 @@
+load("@aspect_rules_py//py:defs.bzl", "py_binary", "py_test", "py_library")
+
+py_library(
+    name = "lib",
+    imports = ["."],
+    srcs = ["lib.py"]
+)
+
+py_binary(
+    name = "bin_a",
+    srcs = ["bin_a.py"],
+    deps = [
+        ":lib"
+    ]
+)
+
+py_binary(
+    name = "bin_b",
+    srcs = ["bin_b.py"],
+    deps = [
+        ":bin_a"
+    ]
+)
+
+py_test(
+    name = "test",
+    srcs = ["test.py"],
+    deps = [
+        ":bin_a",
+        ":bin_b",
+    ]
+)
\ No newline at end of file
diff --git a/e2e/cases/bin-to-bin-deps/bin_a.py b/e2e/cases/bin-to-bin-deps/bin_a.py
new file mode 100644
index 00000000..8b367f3b
--- /dev/null
+++ b/e2e/cases/bin-to-bin-deps/bin_a.py
@@ -0,0 +1 @@
+print("bin_a: Hello!")
\ No newline at end of file
diff --git a/e2e/cases/bin-to-bin-deps/bin_b.py b/e2e/cases/bin-to-bin-deps/bin_b.py
new file mode 100644
index 00000000..1e3d3f8e
--- /dev/null
+++ b/e2e/cases/bin-to-bin-deps/bin_b.py
@@ -0,0 +1,5 @@
+from lib import get_msg
+
+print("bin_b: Hello!")
+
+print(get_msg())
\ No newline at end of file
diff --git a/e2e/cases/bin-to-bin-deps/lib.py b/e2e/cases/bin-to-bin-deps/lib.py
new file mode 100644
index 00000000..2917ee32
--- /dev/null
+++ b/e2e/cases/bin-to-bin-deps/lib.py
@@ -0,0 +1,3 @@
+
+def get_msg():
+    return "Hello from lib!"
\ No newline at end of file
diff --git a/e2e/cases/bin-to-bin-deps/test.py b/e2e/cases/bin-to-bin-deps/test.py
new file mode 100644
index 00000000..e5c17241
--- /dev/null
+++ b/e2e/cases/bin-to-bin-deps/test.py
@@ -0,0 +1,4 @@
+from lib import get_msg
+
+def test_lib():
+    assert "Hello from lib!" == get_msg()
\ No newline at end of file
diff --git a/py/private/BUILD.bazel b/py/private/BUILD.bazel
index eb36e61b..79da4178 100644
--- a/py/private/BUILD.bazel
+++ b/py/private/BUILD.bazel
@@ -1,7 +1,14 @@
 load("@bazel_lib//:bzl_library.bzl", "bzl_library")
+load("@bazel_skylib//rules:common_settings.bzl", "bool_flag")
 
 package(default_visibility = ["//py:__subpackages__"])
 
+bool_flag(
+    name = "bin_to_lib_flag",
+    build_setting_default = True,
+    visibility = ["//:__subpackages__"]
+)
+
 exports_files(
     [
         "run.tmpl.sh",
diff --git a/py/private/bin_to_lib.bzl b/py/private/bin_to_lib.bzl
new file mode 100644
index 00000000..81885b0c
--- /dev/null
+++ b/py/private/bin_to_lib.bzl
@@ -0,0 +1,75 @@
+"""
+
+Sometimes it is desirable for a python binary or venv to depend on another binary target or venv.
+Here we reify bin-dep-bin semantics by transitioning a binary into a library if it is
+ depended upon by another binary.
+
+This functionality has the following benefits: 
+1. py_venv_binary behaves more like the original py_binary rule.
+2. Easier composition of venvs
+3. Better merge semantics for existing binary rules.
+
+"""
+
+load("@bazel_skylib//rules:common_settings.bzl", "BuildSettingInfo")
+load("@rules_cc//cc/common:cc_info.bzl", "CcInfo")
+load("@rules_python//python:defs.bzl", "PyInfo")
+load("//py/private:providers.bzl", "PyVirtualInfo")
+load(":transitions.bzl", "bin_to_lib_transition")
+
+def _find_provider(providers, prov_type_name):
+    for provider in providers:
+        if type(provider) == prov_type_name:
+            return provider
+    return None
+
+def _resolve_providers(ctx, lib_providers, bin_providers):
+    new_providers = []
+    bin_default_info = _find_provider(bin_providers, "DefaultInfo")
+    for p in lib_providers:
+        if type(p) == "DefaultInfo":
+            new_providers.append(
+                DefaultInfo(
+                    files = p.files,
+                    data_runfiles = p.data_runfiles,
+                    default_runfiles = p.default_runfiles,
+                    executable = ctx.outputs.executable,
+                ),
+            )
+            continue
+        new_providers.append(p)
+    return new_providers
+
+def wrap_with_bin_to_lib(bin_rule, lib_rule):
+    def helper(ctx):
+        if not ctx.attr._binary_mode:
+            fail("Wrapped rule missing required attributes.")
+
+        bin_providers = bin_rule(ctx)
+        if ctx.attr._binary_mode[BuildSettingInfo].value:
+            return bin_providers
+
+        lib_providers = lib_rule(ctx)
+
+        # Looks like we need to extract and propagate some files from the original binary.
+        return _resolve_providers(
+            ctx,
+            lib_providers,
+            bin_providers,
+        )
+
+    return helper
+
+bin_to_lib = struct(
+    wrapper = wrap_with_bin_to_lib,
+    attribs = dict({
+        "_binary_mode": attr.label(
+            default = "//py/private:bin_to_lib_flag",
+        ),
+        "deps": attr.label_list(
+            doc = "Targets that produce Python code, commonly `py_library` rules.",
+            providers = [[PyInfo], [PyVirtualInfo], [CcInfo]],
+            cfg = bin_to_lib_transition,
+        ),
+    }),
+)
diff --git a/py/private/py_binary.bzl b/py/private/py_binary.bzl
index cfc0ea3f..668fba42 100644
--- a/py/private/py_binary.bzl
+++ b/py/private/py_binary.bzl
@@ -8,6 +8,8 @@ load("//py/private:py_semantics.bzl", _py_semantics = "semantics")
 load("//py/private/toolchain:types.bzl", "PY_TOOLCHAIN", "VENV_TOOLCHAIN")
 load(":transitions.bzl", "python_version_transition")
 
+load(":bin_to_lib.bzl", "bin_to_lib")
+
 def _dict_to_exports(env):
     return [
         "export %s=\"%s\"" % (k, v)
@@ -228,8 +230,11 @@ py_base = struct(
 
 py_binary = rule(
     doc = "Run a Python program under Bazel. Most users should use the [py_binary macro](#py_binary) instead of loading this directly.",
-    implementation = py_base.implementation,
-    attrs = py_base.attrs,
+    implementation = bin_to_lib.wrapper(
+        py_base.implementation,
+        _py_library.implementation
+    ),
+    attrs = py_base.attrs | bin_to_lib.attribs,
     toolchains = py_base.toolchains,
     executable = True,
     cfg = py_base.cfg,
diff --git a/py/private/py_venv/py_venv.bzl b/py/private/py_venv/py_venv.bzl
index 0f3788da..e56e77b7 100644
--- a/py/private/py_venv/py_venv.bzl
+++ b/py/private/py_venv/py_venv.bzl
@@ -2,6 +2,7 @@
 
 load("@aspect_bazel_lib//lib:expand_make_vars.bzl", "expand_locations", "expand_variables")
 load("@aspect_bazel_lib//lib:paths.bzl", "BASH_RLOCATION_FUNCTION", "to_rlocation_path")
+load("//py/private:bin_to_lib.bzl", "bin_to_lib")
 load("//py/private:py_library.bzl", _py_library = "py_library_utils")
 load("//py/private:py_semantics.bzl", _py_semantics = "semantics")
 load("//py/private:transitions.bzl", "python_version_transition")
@@ -392,8 +393,11 @@ py_venv_base = struct(
 
 _py_venv = rule(
     doc = """Build a Python virtual environment and execute its interpreter.""",
-    implementation = _py_venv_rule_impl,
-    attrs = py_venv_base.attrs,
+    implementation = bin_to_lib.wrapper(
+        _py_venv_rule_impl,
+        _py_library.implementation,
+    ),
+    attrs = py_venv_base.attrs | bin_to_lib.attribs,
     toolchains = py_venv_base.toolchains,
     executable = True,
     cfg = py_venv_base.cfg,
@@ -411,8 +415,12 @@ def _wrap_with_debug(rule):
 
 _py_venv_binary = rule(
     doc = """Run a Python program under Bazel using a virtualenv.""",
-    implementation = _py_venv_binary_impl,
-    attrs = py_venv_base.attrs | py_venv_base.binary_attrs,
+    implementation = bin_to_lib.wrapper(
+        _py_venv_binary_impl,
+        _py_library.implementation,
+    ),
+    #implementation = _py_venv_binary_impl,
+    attrs = py_venv_base.attrs | py_venv_base.binary_attrs | bin_to_lib.attribs,
     toolchains = py_venv_base.toolchains,
     executable = True,
     cfg = py_venv_base.cfg,
diff --git a/py/private/transitions.bzl b/py/private/transitions.bzl
index 13660e4e..5d91e370 100644
--- a/py/private/transitions.bzl
+++ b/py/private/transitions.bzl
@@ -30,5 +30,20 @@ python_transition = transition(
     ],
 )
 
+def _bin_to_lib_transition_impl(settings, attr):
+    return {
+        "//py/private:bin_to_lib_flag": False,
+    }
+
+bin_to_lib_transition = transition(
+    implementation = _bin_to_lib_transition_impl,
+    inputs = [
+        "//py/private:bin_to_lib_flag",
+    ],
+    outputs = [
+        "//py/private:bin_to_lib_flag",
+    ],
+)
+
 # The old name, FIXME: refactor this out
 python_version_transition = python_transition