diff --git a/examples/application/build.gradle b/examples/application/build.gradle
new file mode 100644
index 00000000..f4b1bf13
--- /dev/null
+++ b/examples/application/build.gradle
@@ -0,0 +1,53 @@
+import proguard.gradle.ProGuardTask
+
+buildscript {
+    repositories {
+        mavenCentral()
+        google()
+    }
+    dependencies {
+        classpath 'com.guardsquare:proguard-gradle:7.2.1'
+    }
+}
+
+plugins {
+    id 'application'
+    id 'java'
+}
+
+group = 'com.example'
+version = '0.0.1'
+
+application {
+    mainClass.set('com.example.App')
+}
+
+repositories {
+    mavenCentral()
+}
+
+dependencies {
+    implementation 'com.google.guava:guava:30.1.1-jre'
+}
+
+ext.baseCoordinates = "${project.name}-${project.version}"
+
+tasks.register('proguard', ProGuardTask) {
+    configuration file('proguard.pro')
+
+    injars(tasks.named('jar', Jar).flatMap { it.archiveFile })
+
+    // Automatically handle the Java version of this build.
+    if (System.getProperty('java.version').startsWith('1.')) {
+        // Before Java 9, the runtime classes were packaged in a single jar file.
+        libraryjars "${System.getProperty('java.home')}/lib/rt.jar"
+    } else {
+        // As of Java 9, the runtime classes are packaged in modular jmod files.
+        libraryjars "${System.getProperty('java.home')}/jmods/java.base.jmod", jarfilter: '!**.jar', filter: '!module-info.class'
+        //libraryjars "${System.getProperty('java.home')}/jmods/....."
+    }
+
+    verbose
+
+    outjars(layout.buildDirectory.file("libs/${baseCoordinates}-minified.jar"))
+}
diff --git a/examples/application/gradle/wrapper/gradle-wrapper.jar b/examples/application/gradle/wrapper/gradle-wrapper.jar
new file mode 100644
index 00000000..e708b1c0
Binary files /dev/null and b/examples/application/gradle/wrapper/gradle-wrapper.jar differ
diff --git a/examples/application/gradle/wrapper/gradle-wrapper.properties b/examples/application/gradle/wrapper/gradle-wrapper.properties
new file mode 100644
index 00000000..2a563242
--- /dev/null
+++ b/examples/application/gradle/wrapper/gradle-wrapper.properties
@@ -0,0 +1,5 @@
+distributionBase=GRADLE_USER_HOME
+distributionPath=wrapper/dists
+distributionUrl=https\://services.gradle.org/distributions/gradle-6.8.2-bin.zip
+zipStoreBase=GRADLE_USER_HOME
+zipStorePath=wrapper/dists
diff --git a/examples/application/gradlew b/examples/application/gradlew
new file mode 100755
index 00000000..4f906e0c
--- /dev/null
+++ b/examples/application/gradlew
@@ -0,0 +1,185 @@
+#!/usr/bin/env sh
+
+#
+# Copyright 2015 the original author or 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
+#
+#      https://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.
+#
+
+##############################################################################
+##
+##  Gradle start up script for UN*X
+##
+##############################################################################
+
+# Attempt to set APP_HOME
+# Resolve links: $0 may be a link
+PRG="$0"
+# Need this for relative symlinks.
+while [ -h "$PRG" ] ; do
+    ls=`ls -ld "$PRG"`
+    link=`expr "$ls" : '.*-> \(.*\)$'`
+    if expr "$link" : '/.*' > /dev/null; then
+        PRG="$link"
+    else
+        PRG=`dirname "$PRG"`"/$link"
+    fi
+done
+SAVED="`pwd`"
+cd "`dirname \"$PRG\"`/" >/dev/null
+APP_HOME="`pwd -P`"
+cd "$SAVED" >/dev/null
+
+APP_NAME="Gradle"
+APP_BASE_NAME=`basename "$0"`
+
+# Add default JVM options here. You can also use JAVA_OPTS and GRADLE_OPTS to pass JVM options to this script.
+DEFAULT_JVM_OPTS='"-Xmx64m" "-Xms64m"'
+
+# Use the maximum available, or set MAX_FD != -1 to use that value.
+MAX_FD="maximum"
+
+warn () {
+    echo "$*"
+}
+
+die () {
+    echo
+    echo "$*"
+    echo
+    exit 1
+}
+
+# OS specific support (must be 'true' or 'false').
+cygwin=false
+msys=false
+darwin=false
+nonstop=false
+case "`uname`" in
+  CYGWIN* )
+    cygwin=true
+    ;;
+  Darwin* )
+    darwin=true
+    ;;
+  MINGW* )
+    msys=true
+    ;;
+  NONSTOP* )
+    nonstop=true
+    ;;
+esac
+
+CLASSPATH=$APP_HOME/gradle/wrapper/gradle-wrapper.jar
+
+
+# Determine the Java command to use to start the JVM.
+if [ -n "$JAVA_HOME" ] ; then
+    if [ -x "$JAVA_HOME/jre/sh/java" ] ; then
+        # IBM's JDK on AIX uses strange locations for the executables
+        JAVACMD="$JAVA_HOME/jre/sh/java"
+    else
+        JAVACMD="$JAVA_HOME/bin/java"
+    fi
+    if [ ! -x "$JAVACMD" ] ; then
+        die "ERROR: JAVA_HOME is set to an invalid directory: $JAVA_HOME
+
+Please set the JAVA_HOME variable in your environment to match the
+location of your Java installation."
+    fi
+else
+    JAVACMD="java"
+    which java >/dev/null 2>&1 || die "ERROR: JAVA_HOME is not set and no 'java' command could be found in your PATH.
+
+Please set the JAVA_HOME variable in your environment to match the
+location of your Java installation."
+fi
+
+# Increase the maximum file descriptors if we can.
+if [ "$cygwin" = "false" -a "$darwin" = "false" -a "$nonstop" = "false" ] ; then
+    MAX_FD_LIMIT=`ulimit -H -n`
+    if [ $? -eq 0 ] ; then
+        if [ "$MAX_FD" = "maximum" -o "$MAX_FD" = "max" ] ; then
+            MAX_FD="$MAX_FD_LIMIT"
+        fi
+        ulimit -n $MAX_FD
+        if [ $? -ne 0 ] ; then
+            warn "Could not set maximum file descriptor limit: $MAX_FD"
+        fi
+    else
+        warn "Could not query maximum file descriptor limit: $MAX_FD_LIMIT"
+    fi
+fi
+
+# For Darwin, add options to specify how the application appears in the dock
+if $darwin; then
+    GRADLE_OPTS="$GRADLE_OPTS \"-Xdock:name=$APP_NAME\" \"-Xdock:icon=$APP_HOME/media/gradle.icns\""
+fi
+
+# For Cygwin or MSYS, switch paths to Windows format before running java
+if [ "$cygwin" = "true" -o "$msys" = "true" ] ; then
+    APP_HOME=`cygpath --path --mixed "$APP_HOME"`
+    CLASSPATH=`cygpath --path --mixed "$CLASSPATH"`
+
+    JAVACMD=`cygpath --unix "$JAVACMD"`
+
+    # We build the pattern for arguments to be converted via cygpath
+    ROOTDIRSRAW=`find -L / -maxdepth 1 -mindepth 1 -type d 2>/dev/null`
+    SEP=""
+    for dir in $ROOTDIRSRAW ; do
+        ROOTDIRS="$ROOTDIRS$SEP$dir"
+        SEP="|"
+    done
+    OURCYGPATTERN="(^($ROOTDIRS))"
+    # Add a user-defined pattern to the cygpath arguments
+    if [ "$GRADLE_CYGPATTERN" != "" ] ; then
+        OURCYGPATTERN="$OURCYGPATTERN|($GRADLE_CYGPATTERN)"
+    fi
+    # Now convert the arguments - kludge to limit ourselves to /bin/sh
+    i=0
+    for arg in "$@" ; do
+        CHECK=`echo "$arg"|egrep -c "$OURCYGPATTERN" -`
+        CHECK2=`echo "$arg"|egrep -c "^-"`                                 ### Determine if an option
+
+        if [ $CHECK -ne 0 ] && [ $CHECK2 -eq 0 ] ; then                    ### Added a condition
+            eval `echo args$i`=`cygpath --path --ignore --mixed "$arg"`
+        else
+            eval `echo args$i`="\"$arg\""
+        fi
+        i=`expr $i + 1`
+    done
+    case $i in
+        0) set -- ;;
+        1) set -- "$args0" ;;
+        2) set -- "$args0" "$args1" ;;
+        3) set -- "$args0" "$args1" "$args2" ;;
+        4) set -- "$args0" "$args1" "$args2" "$args3" ;;
+        5) set -- "$args0" "$args1" "$args2" "$args3" "$args4" ;;
+        6) set -- "$args0" "$args1" "$args2" "$args3" "$args4" "$args5" ;;
+        7) set -- "$args0" "$args1" "$args2" "$args3" "$args4" "$args5" "$args6" ;;
+        8) set -- "$args0" "$args1" "$args2" "$args3" "$args4" "$args5" "$args6" "$args7" ;;
+        9) set -- "$args0" "$args1" "$args2" "$args3" "$args4" "$args5" "$args6" "$args7" "$args8" ;;
+    esac
+fi
+
+# Escape application args
+save () {
+    for i do printf %s\\n "$i" | sed "s/'/'\\\\''/g;1s/^/'/;\$s/\$/' \\\\/" ; done
+    echo " "
+}
+APP_ARGS=`save "$@"`
+
+# Collect all arguments for the java command, following the shell quoting and substitution rules
+eval set -- $DEFAULT_JVM_OPTS $JAVA_OPTS $GRADLE_OPTS "\"-Dorg.gradle.appname=$APP_BASE_NAME\"" -classpath "\"$CLASSPATH\"" org.gradle.wrapper.GradleWrapperMain "$APP_ARGS"
+
+exec "$JAVACMD" "$@"
diff --git a/examples/application/gradlew.bat b/examples/application/gradlew.bat
new file mode 100644
index 00000000..ac1b06f9
--- /dev/null
+++ b/examples/application/gradlew.bat
@@ -0,0 +1,89 @@
+@rem
+@rem Copyright 2015 the original author or authors.
+@rem
+@rem Licensed under the Apache License, Version 2.0 (the "License");
+@rem you may not use this file except in compliance with the License.
+@rem You may obtain a copy of the License at
+@rem
+@rem      https://www.apache.org/licenses/LICENSE-2.0
+@rem
+@rem Unless required by applicable law or agreed to in writing, software
+@rem distributed under the License is distributed on an "AS IS" BASIS,
+@rem WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+@rem See the License for the specific language governing permissions and
+@rem limitations under the License.
+@rem
+
+@if "%DEBUG%" == "" @echo off
+@rem ##########################################################################
+@rem
+@rem  Gradle startup script for Windows
+@rem
+@rem ##########################################################################
+
+@rem Set local scope for the variables with windows NT shell
+if "%OS%"=="Windows_NT" setlocal
+
+set DIRNAME=%~dp0
+if "%DIRNAME%" == "" set DIRNAME=.
+set APP_BASE_NAME=%~n0
+set APP_HOME=%DIRNAME%
+
+@rem Resolve any "." and ".." in APP_HOME to make it shorter.
+for %%i in ("%APP_HOME%") do set APP_HOME=%%~fi
+
+@rem Add default JVM options here. You can also use JAVA_OPTS and GRADLE_OPTS to pass JVM options to this script.
+set DEFAULT_JVM_OPTS="-Xmx64m" "-Xms64m"
+
+@rem Find java.exe
+if defined JAVA_HOME goto findJavaFromJavaHome
+
+set JAVA_EXE=java.exe
+%JAVA_EXE% -version >NUL 2>&1
+if "%ERRORLEVEL%" == "0" goto execute
+
+echo.
+echo ERROR: JAVA_HOME is not set and no 'java' command could be found in your PATH.
+echo.
+echo Please set the JAVA_HOME variable in your environment to match the
+echo location of your Java installation.
+
+goto fail
+
+:findJavaFromJavaHome
+set JAVA_HOME=%JAVA_HOME:"=%
+set JAVA_EXE=%JAVA_HOME%/bin/java.exe
+
+if exist "%JAVA_EXE%" goto execute
+
+echo.
+echo ERROR: JAVA_HOME is set to an invalid directory: %JAVA_HOME%
+echo.
+echo Please set the JAVA_HOME variable in your environment to match the
+echo location of your Java installation.
+
+goto fail
+
+:execute
+@rem Setup the command line
+
+set CLASSPATH=%APP_HOME%\gradle\wrapper\gradle-wrapper.jar
+
+
+@rem Execute Gradle
+"%JAVA_EXE%" %DEFAULT_JVM_OPTS% %JAVA_OPTS% %GRADLE_OPTS% "-Dorg.gradle.appname=%APP_BASE_NAME%" -classpath "%CLASSPATH%" org.gradle.wrapper.GradleWrapperMain %*
+
+:end
+@rem End local scope for the variables with windows NT shell
+if "%ERRORLEVEL%"=="0" goto mainEnd
+
+:fail
+rem Set variable GRADLE_EXIT_CONSOLE if you need the _script_ return code instead of
+rem the _cmd.exe /c_ return code!
+if  not "" == "%GRADLE_EXIT_CONSOLE%" exit 1
+exit /b 1
+
+:mainEnd
+if "%OS%"=="Windows_NT" endlocal
+
+:omega
diff --git a/examples/application/proguard.pro b/examples/application/proguard.pro
new file mode 100644
index 00000000..5524d9e3
--- /dev/null
+++ b/examples/application/proguard.pro
@@ -0,0 +1,6 @@
+# We only want minification, not obfuscation.
+-dontobfuscate
+-verbose
+
+# Entry point to the app.
+-keep class com.example.App { *; }
diff --git a/examples/application/settings.gradle b/examples/application/settings.gradle
new file mode 100644
index 00000000..0a383dd8
--- /dev/null
+++ b/examples/application/settings.gradle
@@ -0,0 +1 @@
+rootProject.name = 'demo'
diff --git a/examples/application/src/main/java/com/example/App.java b/examples/application/src/main/java/com/example/App.java
new file mode 100644
index 00000000..e584f569
--- /dev/null
+++ b/examples/application/src/main/java/com/example/App.java
@@ -0,0 +1,7 @@
+package com.example;
+
+public class App {
+    public static void main(String... args) {
+        System.out.println("Hello, world!");
+    }
+}
diff --git a/gradle-plugin/build.gradle b/gradle-plugin/build.gradle
index 347c533a..a5b3302d 100644
--- a/gradle-plugin/build.gradle
+++ b/gradle-plugin/build.gradle
@@ -92,14 +92,19 @@ sourceSets.test {
 }
 
 // Copies selected directories from examples into the test resources to compile during an integration test.
-tasks.register('copyExamples', Copy) {
+def copyExamples = tasks.register('copyExamples', Copy) {
     from("$rootProject.rootDir/examples") {
         include 'spring-boot/**'
         include 'gradle-kotlin-dsl/**'
+        include 'application/**'
     }
     into "$buildDir/fixtures"
 }
 
+tasks.named('processTestResources', ProcessResources) {
+    dependsOn copyExamples
+}
+
 tasks.withType(Test).configureEach {
     dependsOn copyExamples
 }
diff --git a/gradle-plugin/src/main/java/proguard/gradle/ProGuardTask.java b/gradle-plugin/src/main/java/proguard/gradle/ProGuardTask.java
index 1c190011..7078bd56 100644
--- a/gradle-plugin/src/main/java/proguard/gradle/ProGuardTask.java
+++ b/gradle-plugin/src/main/java/proguard/gradle/ProGuardTask.java
@@ -26,6 +26,7 @@ import org.gradle.api.file.*;
 import org.gradle.api.logging.*;
 import org.gradle.api.tasks.*;
 import org.gradle.api.tasks.Optional;
+import org.gradle.util.GradleVersion;
 import proguard.*;
 import proguard.classfile.*;
 import proguard.classfile.util.ClassUtil;
@@ -67,6 +68,13 @@ public abstract class ProGuardTask extends DefaultTask
     // INTERNAL USE ONLY - write extra data entries to this jar
     private File extraJar;
 
+    public ProGuardTask() {
+        if (GradleVersion.current().compareTo(GradleVersion.version("7.4")) >= 0) {
+            // This method was added in Gradle 7.4
+            notCompatibleWithConfigurationCache("https://github.com/Guardsquare/proguard/issues/254");
+        }
+    }
+
     // Gradle task inputs and outputs, because annotations on the List fields
     // (private or not) don't seem to work. Private methods don't work either,
     // but package visible or protected methods are ok.
diff --git a/gradle-plugin/src/test/kotlin/proguard/gradle/GradlePluginIntegrationTest.kt b/gradle-plugin/src/test/kotlin/proguard/gradle/GradlePluginIntegrationTest.kt
index 0b5b45c0..6fd4b572 100644
--- a/gradle-plugin/src/test/kotlin/proguard/gradle/GradlePluginIntegrationTest.kt
+++ b/gradle-plugin/src/test/kotlin/proguard/gradle/GradlePluginIntegrationTest.kt
@@ -27,6 +27,7 @@ import io.kotest.engine.spec.tempdir
 import io.kotest.matchers.shouldBe
 import io.kotest.matchers.string.shouldContain
 import java.io.File
+import java.lang.management.ManagementFactory
 import org.apache.commons.io.FileUtils
 import org.gradle.testkit.runner.BuildResult
 import org.gradle.testkit.runner.GradleRunner
@@ -40,14 +41,45 @@ class GradlePluginIntegrationTest : FreeSpec({
         FileUtils.copyDirectory(fixture, projectRoot)
         TestPluginClasspath.applyToRootGradle(projectRoot)
 
-        val result = GradleRunner.create()
-            .forwardOutput()
-            .withArguments("proguard")
-            .withPluginClasspath()
-            .withProjectDir(projectRoot)
-            .build()
+        "When the build is executed" - {
+            val result = GradleRunner.create()
+                .forwardOutput()
+                .withArguments("proguard")
+                .withPluginClasspath()
+                .withProjectDir(projectRoot)
+                .build()
 
-        result.output shouldContain "SUCCESSFUL"
+            "Then the build was successful" {
+                result.output shouldContain "SUCCESSFUL"
+            }
+        }
+    }
+
+    // ProguardTask is still incompatible, but will not fail the build. Once the issue is resolved, this test will fail
+    // and should be updated to demonstrate compatibility.
+    "ProguardTask will not fail when configuration cache is used" - {
+        val projectRoot = tempdir()
+        val fixture = File(GradlePluginIntegrationTest::class.java.classLoader.getResource("application").path)
+        FileUtils.copyDirectory(fixture, projectRoot)
+        TestPluginClasspath.applyToRootGradle(projectRoot)
+
+        "When the build is executed" - {
+            val result = GradleRunner.create()
+                .forwardOutput()
+                .withArguments("proguard", "--configuration-cache")
+                .withPluginClasspath()
+                .withGradleVersion("7.4")
+                .withProjectDir(projectRoot)
+                // Ensure this value is true when `--debug-jvm` is passed to Gradle, and false otherwise
+                .withDebug(ManagementFactory.getRuntimeMXBean().inputArguments.toString().indexOf("-agentlib:jdwp") > 0)
+                .build()
+
+            "Then the build was successful with configuration cache" {
+                result.output shouldContain "SUCCESSFUL"
+                // E.g., "Configuration cache entry discarded with 4 problems."
+                result.output shouldContain "Configuration cache entry discarded with"
+            }
+        }
     }
 
     "gradle plugin can be configured via #configOption" - {