diff --git a/cmd/crossplane/render/convert.go b/cmd/crossplane/render/convert.go
index f445cdd..4a43312 100644
--- a/cmd/crossplane/render/convert.go
+++ b/cmd/crossplane/render/convert.go
@@ -57,7 +57,7 @@ func BuildCompositeRequest(in CompositionInputs) (*renderv1alpha1.RenderRequest,
 		})
 	}
 
-	observedStructs, err := composedToStructs(in.ObservedResources)
+	observedStructs, err := composedToStructs(filterObservedXR(in.ObservedResources, in.CompositeResource))
 	if err != nil {
 		return nil, errors.Wrap(err, "cannot convert observed resources to protobuf")
 	}
@@ -278,6 +278,27 @@ func asStructFromTyped(o runtime.Object) (*structpb.Struct, error) {
 	return resource.AsStruct(u)
 }
 
+// filterObservedXR drops any observed resource that is really the composite
+// resource itself. A render run emits the XR as its first output document, so
+// an --observed-resources file produced by a previous run usually contains a
+// UID-less copy of the XR. Keyed by GVK+namespace+name, that copy would
+// overwrite the real XR in the engine's store and blank its UID, causing the
+// ownership check to drop every composed resource. The XR is already supplied
+// as the positional argument, so the copy is redundant. See issue #47.
+func filterObservedXR(observed []composed.Unstructured, xr *ucomposite.Unstructured) []composed.Unstructured {
+	out := make([]composed.Unstructured, 0, len(observed))
+	for i := range observed {
+		o := observed[i]
+		if o.GroupVersionKind() == xr.GroupVersionKind() &&
+			o.GetNamespace() == xr.GetNamespace() &&
+			o.GetName() == xr.GetName() {
+			continue
+		}
+		out = append(out, o)
+	}
+	return out
+}
+
 func composedToStructs(resources []composed.Unstructured) ([]*structpb.Struct, error) {
 	out := make([]*structpb.Struct, 0, len(resources))
 	for i := range resources {
diff --git a/cmd/crossplane/render/convert_test.go b/cmd/crossplane/render/convert_test.go
new file mode 100644
index 0000000..b5b1165
--- /dev/null
+++ b/cmd/crossplane/render/convert_test.go
@@ -0,0 +1,120 @@
+/*
+Copyright 2026 The Crossplane Authors.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package render
+
+import (
+	"fmt"
+	"testing"
+
+	"github.com/google/go-cmp/cmp"
+
+	"github.com/crossplane/crossplane-runtime/v2/pkg/resource/unstructured/composed"
+	ucomposite "github.com/crossplane/crossplane-runtime/v2/pkg/resource/unstructured/composite"
+)
+
+func TestFilterObservedXR(t *testing.T) {
+	// composite builds a composite resource (XR) with the given identity.
+	composite := func(apiVersion, kind, namespace, name string) *ucomposite.Unstructured {
+		xr := ucomposite.New()
+		xr.SetAPIVersion(apiVersion)
+		xr.SetKind(kind)
+		xr.SetNamespace(namespace)
+		xr.SetName(name)
+		return xr
+	}
+
+	// observed builds an observed composed resource with the given identity.
+	observed := func(apiVersion, kind, namespace, name string) composed.Unstructured {
+		o := composed.New()
+		o.SetAPIVersion(apiVersion)
+		o.SetKind(kind)
+		o.SetNamespace(namespace)
+		o.SetName(name)
+		return *o
+	}
+
+	// keys projects resources to comparable "apiVersion/kind/namespace/name"
+	// strings so we compare identity rather than the underlying maps.
+	keys := func(rs []composed.Unstructured) []string {
+		out := make([]string, len(rs))
+		for i := range rs {
+			out[i] = fmt.Sprintf("%s/%s/%s/%s", rs[i].GetAPIVersion(), rs[i].GetKind(), rs[i].GetNamespace(), rs[i].GetName())
+		}
+		return out
+	}
+
+	cases := map[string]struct {
+		xr       *ucomposite.Unstructured
+		observed []composed.Unstructured
+		want     []string
+	}{
+		"DropsObservedCopyOfXR": {
+			// The observed file contains a copy of the XR (as `crossplane
+			// render` emits it) alongside a real composed resource. Only the
+			// composed resource should survive.
+			xr: composite("example.org/v1", "XR", "default", "my-xr"),
+			observed: []composed.Unstructured{
+				observed("example.org/v1", "XR", "default", "my-xr"),
+				observed("example.org/v1", "Composed", "default", "cd-a"),
+			},
+			want: []string{"example.org/v1/Composed/default/cd-a"},
+		},
+		"KeepsAllWhenNoXRCopy": {
+			xr: composite("example.org/v1", "XR", "default", "my-xr"),
+			observed: []composed.Unstructured{
+				observed("example.org/v1", "Composed", "default", "cd-a"),
+				observed("example.org/v1", "Composed", "default", "cd-b"),
+			},
+			want: []string{
+				"example.org/v1/Composed/default/cd-a",
+				"example.org/v1/Composed/default/cd-b",
+			},
+		},
+		"DropsClusterScopedXRCopy": {
+			// Cluster-scoped XR: namespace is empty on both the XR and its copy.
+			xr: composite("example.org/v1", "XR", "", "my-xr"),
+			observed: []composed.Unstructured{
+				observed("example.org/v1", "XR", "", "my-xr"),
+				observed("example.org/v1", "Composed", "", "cd-a"),
+			},
+			want: []string{"example.org/v1/Composed//cd-a"},
+		},
+		"KeepsSameNameDifferentKind": {
+			// A resource sharing the XR's name and namespace but a different
+			// kind is not the XR and must be kept.
+			xr: composite("example.org/v1", "XR", "default", "my-xr"),
+			observed: []composed.Unstructured{
+				observed("example.org/v1", "Other", "default", "my-xr"),
+			},
+			want: []string{"example.org/v1/Other/default/my-xr"},
+		},
+		"EmptyObserved": {
+			xr:       composite("example.org/v1", "XR", "default", "my-xr"),
+			observed: nil,
+			want:     []string{},
+		},
+	}
+
+	for name, tc := range cases {
+		t.Run(name, func(t *testing.T) {
+			got := filterObservedXR(tc.observed, tc.xr)
+			if diff := cmp.Diff(tc.want, keys(got)); diff != "" {
+				t.Errorf("filterObservedXR(): -want +got:\n%s", diff)
+			}
+		})
+	}
+}