diff --git a/src/app.rs b/src/app.rs
index 9f5a18b6..c92e6814 100644
--- a/src/app.rs
+++ b/src/app.rs
@@ -162,7 +162,7 @@ pub fn app() -> App<'static, 'static> {
         .arg(flag("no-ignore-parent"))
         .arg(flag("no-ignore-vcs"))
         .arg(flag("null").short("0"))
-        .arg(flag("only-matching").short("o").conflicts_with("replace"))
+        .arg(flag("only-matching").short("o"))
         .arg(flag("path-separator").value_name("SEPARATOR").takes_value(true))
         .arg(flag("pretty").short("p"))
         .arg(flag("replace").short("r")
diff --git a/src/printer.rs b/src/printer.rs
index 1a6f7dac..ebc5b2d4 100644
--- a/src/printer.rs
+++ b/src/printer.rs
@@ -316,7 +316,12 @@ impl<W: WriteColor> Printer<W> {
             let line = {
                 let replacer = CountingReplacer::new(
                     self.replace.as_ref().unwrap(), &mut count, &mut offsets);
-                re.replace_all(&buf[start..end], replacer)
+                if self.only_matching {
+                    re.replace_all(
+                        &buf[start + match_start..start + match_end], replacer)
+                } else {
+                    re.replace_all(&buf[start..end], replacer)
+                }
             };
             if self.max_columns.map_or(false, |m| line.len() > m) {
                 let msg = format!(
diff --git a/tests/tests.rs b/tests/tests.rs
index 4de13216..0c9446c1 100644
--- a/tests/tests.rs
+++ b/tests/tests.rs
@@ -266,6 +266,20 @@ but Watson, Doctor has to have it taken out for him and dusted,
     assert_eq!(lines, expected);
 });
 
+sherlock!(replace_with_only_matching, "of (\\w+)",
+|wd: WorkDir, mut cmd: Command| {
+    cmd.arg("-o").arg("-r").arg("$1");
+    let lines: String = wd.stdout(&mut cmd);
+    let expected = "\
+this
+detective
+luck
+straw
+cigar
+";
+    assert_eq!(lines, expected);
+});
+
 sherlock!(file_types, "Sherlock", ".", |wd: WorkDir, mut cmd: Command| {
     wd.create("file.py", "Sherlock");
     wd.create("file.rs", "Sherlock");