diff --git a/.changes/unreleased/Fixes-20230605-124425.yaml b/.changes/unreleased/Fixes-20230605-124425.yaml
new file mode 100644
index 00000000000..09c23e3f296
--- /dev/null
+++ b/.changes/unreleased/Fixes-20230605-124425.yaml
@@ -0,0 +1,6 @@
+kind: Fixes
+body: fix RuntimeError when removing project dependency from dependencies.yml
+time: 2023-06-05T12:44:25.978022-04:00
+custom:
+  Author: michelleark
+  Issue: "7743"
diff --git a/core/dbt/parser/manifest.py b/core/dbt/parser/manifest.py
index ada54f575d8..b10cca55e45 100644
--- a/core/dbt/parser/manifest.py
+++ b/core/dbt/parser/manifest.py
@@ -785,14 +785,15 @@ def build_public_nodes(self) -> bool:
             for project in self.manifest.project_dependencies.projects:
                 project_dependency_names.append(project.name)
 
-        # clean up previous publications that are no longer specified
-        # and save previous publications, for later removal of references
-        saved_manifest_publications: MutableMapping[str, PublicationConfig] = {}
+        # Save previous publications, for later removal of references
+        saved_manifest_publications: MutableMapping[str, PublicationConfig] = deepcopy(
+            self.manifest.publications
+        )
         if self.manifest.publications:
             for project_name, publication in self.manifest.publications.items():
                 if project_name not in project_dependency_names:
                     remove_dependent_project_references(self.manifest, publication)
-                    self.manifest.publications.pop(project_name)
+                    saved_manifest_publications.pop(project_name)
                     fire_event(
                         PublicationArtifactChanged(
                             action="removed",
@@ -803,7 +804,8 @@ def build_public_nodes(self) -> bool:
                         )
                     )
                     public_nodes_changed = True
-            saved_manifest_publications = self.manifest.publications
+
+            # clean up previous publications that are no longer specified
             self.manifest.publications = {}
             # Empty public_nodes since we're re-generating them all
             self.manifest.public_nodes = {}
diff --git a/tests/functional/partial_parsing/fixtures.py b/tests/functional/partial_parsing/fixtures.py
index 74cef0bff00..fe68d55be36 100644
--- a/tests/functional/partial_parsing/fixtures.py
+++ b/tests/functional/partial_parsing/fixtures.py
@@ -1234,8 +1234,61 @@
 
 """
 
-public_models_schema_yml = """
+dependencies_yml = """
+projects:
+  - name: marketing
+"""
+
+empty_dependencies_yml = """
+projects: []
+"""
+
+marketing_pub_json = """
+{
+  "project_name": "marketing",
+  "metadata": {
+    "dbt_schema_version": "https://schemas.getdbt.com/dbt/publication/v1.json",
+    "dbt_version": "1.5.0",
+    "generated_at": "2023-04-13T17:17:58.128706Z",
+    "invocation_id": "56e3126f-78c7-470c-8eb0-c94af7c3eaac",
+    "env": {},
+    "adapter_type": "postgres",
+    "quoting": {
+      "database": true,
+      "schema": true,
+      "identifier": true
+    }
+  },
+  "public_models": {
+    "model.marketing.fct_one": {
+      "name": "fct_one",
+      "package_name": "marketing",
+      "unique_id": "model.marketing.fct_one",
+      "relation_name": "\\"dbt\\".\\"test_schema\\".\\"fct_one\\"",
+      "database": "dbt",
+      "schema": "test_schema",
+      "identifier": "fct_one",
+      "version": null,
+      "latest_version": null,
+      "public_node_dependencies": [],
+      "generated_at": "2023-04-13T17:17:58.128706Z"
+    },
+    "model.marketing.fct_two": {
+      "name": "fct_two",
+      "package_name": "marketing",
+      "unique_id": "model.marketing.fct_two",
+      "relation_name": "\\"dbt\\".\\"test_schema\\".\\"fct_two\\"",
+      "version": null,
+      "latest_version": null,
+      "public_node_dependencies": ["model.test.fct_one"],
+      "generated_at": "2023-04-13T17:17:58.128706Z"
+    }
+  },
+  "dependencies": []
+}
+"""
 
+public_models_schema_yml = """
 models:
   - name: orders
     access: public
diff --git a/tests/functional/partial_parsing/test_partial_parsing.py b/tests/functional/partial_parsing/test_partial_parsing.py
index 941d9ff1aa9..6d7532edee5 100644
--- a/tests/functional/partial_parsing/test_partial_parsing.py
+++ b/tests/functional/partial_parsing/test_partial_parsing.py
@@ -69,12 +69,18 @@
     groups_schema_yml_one_group_model_in_group2,
     groups_schema_yml_two_groups_private_orders_valid_access,
     groups_schema_yml_two_groups_private_orders_invalid_access,
+    dependencies_yml,
+    empty_dependencies_yml,
+    marketing_pub_json,
     public_models_schema_yml,
 )
 
 from dbt.exceptions import CompilationError, ParsingError, DuplicateVersionedUnversionedError
 from dbt.contracts.files import ParseFileType
 from dbt.contracts.results import TestStatus
+from dbt.contracts.publication import PublicationArtifact
+
+import json
 import re
 import os
 
@@ -807,6 +813,27 @@ def test_pp_groups(self, project):
             results = run_dbt(["--partial-parse", "run"])
 
 
+class TestDependencies:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {"orders.sql": orders_sql}
+
+    @pytest.fixture(scope="class")
+    def marketing_publication(self):
+        return PublicationArtifact.from_dict(json.loads(marketing_pub_json))
+
+    def test_dependencies(self, project, marketing_publication):
+        # initial run with dependencies
+        write_file(dependencies_yml, "dependencies.yml")
+        manifest = run_dbt(["parse"], publications=[marketing_publication])
+        assert len(manifest.project_dependencies.projects) == 1
+
+        # remove dependencies
+        write_file(empty_dependencies_yml, "dependencies.yml")
+        manifest = run_dbt(["parse"], publications=[marketing_publication])
+        assert len(manifest.project_dependencies.projects) == 0
+
+
 class TestPublicationArtifactAvailable:
     @pytest.fixture(scope="class")
     def models(self):