diff --git a/pysindy/differentiation/sindy_derivative.py b/pysindy/differentiation/sindy_derivative.py
index 7ae11133..17ace83e 100644
--- a/pysindy/differentiation/sindy_derivative.py
+++ b/pysindy/differentiation/sindy_derivative.py
@@ -52,7 +52,7 @@ def set_params(self, **params):
             # Simple optimization to gain speed (inspect is slow)
             return self
         else:
-            self.kwargs.update(params)
+            self.kwargs.update(params["kwargs"])
 
         return self
 
diff --git a/test/differentiation/test_differentiation_methods.py b/test/differentiation/test_differentiation_methods.py
index e24481aa..6bae3da4 100644
--- a/test/differentiation/test_differentiation_methods.py
+++ b/test/differentiation/test_differentiation_methods.py
@@ -262,6 +262,13 @@ def test_wrapper_equivalence_with_dxdt(data, derivative_kws):
         )
 
 
+def test_sindy_derivative_kwarg_update():
+    method = SINDyDerivative(kind="spectral", foo=2)
+    method.set_params(kwargs={"kind": "spline", "foo": 1})
+    assert method.kwargs["kind"] == "spline"
+    assert method.kwargs["foo"] == 1
+
+
 @pytest.mark.parametrize(
     "data, derivative_kws",
     [