diff --git a/api/resource/factory.go b/api/resource/factory.go
index fb01bc8ceec..c4d7b45d4df 100644
--- a/api/resource/factory.go
+++ b/api/resource/factory.go
@@ -143,7 +143,7 @@ func (rf *Factory) resourcesFromRNodes(
 	return
 }
 
-func (rf *Factory) RNodesFromBytes(b []byte) (result []*yaml.RNode, err error) {
+func (rf *Factory) RNodesFromBytes(b []byte) ([]*yaml.RNode, error) {
 	nodes, err := kio.FromBytes(b)
 	if err != nil {
 		return nil, err
@@ -152,9 +152,25 @@ func (rf *Factory) RNodesFromBytes(b []byte) (result []*yaml.RNode, err error) {
 	if err != nil {
 		return nil, err
 	}
+	// Replace YAML anchors before converting any FooList nodes into []Foo.
+	// Anchors work across elements of a FooList because it's still one node,
+	// but won't work across those elements after their expansion.
+	for _, n := range nodes {
+		if err = n.DeAnchor(); err != nil {
+			return nil, err
+		}
+	}
+	return rf.inlineAnyEmbeddedLists(nodes)
+}
+
+// inlineAnyEmbeddedLists scans the RNode slice for nodes named FooList.
+// Such nodes are expected to be lists of RNodes, each of type Foo.
+// These lists are replaced in the result by their inlined content.
+func (rf *Factory) inlineAnyEmbeddedLists(
+	nodes []*yaml.RNode) (result []*yaml.RNode, err error) {
+	var n0 *yaml.RNode
 	for len(nodes) > 0 {
-		n0 := nodes[0]
-		nodes = nodes[1:]
+		n0, nodes = nodes[0], nodes[1:]
 		kind := n0.GetKind()
 		if !strings.HasSuffix(kind, "List") {
 			result = append(result, n0)
@@ -164,7 +180,7 @@ func (rf *Factory) RNodesFromBytes(b []byte) (result []*yaml.RNode, err error) {
 		var m map[string]interface{}
 		m, err = n0.Map()
 		if err != nil {
-			return nil, err
+			return nil, fmt.Errorf("trouble expanding list of %s; %w", kind, err)
 		}
 		items, ok := m["items"]
 		if !ok {
diff --git a/api/resource/factory_test.go b/api/resource/factory_test.go
index 905b8620282..f03cba8f46f 100644
--- a/api/resource/factory_test.go
+++ b/api/resource/factory_test.go
@@ -639,17 +639,14 @@ data:
   feeling: *color-used
 `),
 			exp: expected{
-				// TODO(#3675) : the anchor should be replaced.
-				// Anchors are replaced in the List above due to a different code path
-				// (when the list is inlined).
 				out: []string{`
 apiVersion: v1
 kind: ConfigMap
 metadata:
   name: wildcard
 data:
-  color: &color-used blue
-  feeling: *color-used
+  color: blue
+  feeling: blue
 `},
 			},
 		},