diff --git a/internal/reconcile/atomic_release.go b/internal/reconcile/atomic_release.go
index 4326a31ca..b57f31587 100644
--- a/internal/reconcile/atomic_release.go
+++ b/internal/reconcile/atomic_release.go
@@ -377,6 +377,14 @@ func (r *AtomicRelease) actionForState(ctx context.Context, req *Request, state
 			replaceCondition(req.Object, v2.RemediatedCondition, v2.ReleasedCondition, v2.UpgradeSucceededReason, msg, metav1.ConditionTrue)
 		}
 
+		// Since the release is in-sync, replace any Status=False released condition for any previous upgrade failure with Status=True
+		// This can happen when the desired configuration is changed back to match the current release following an upgrade failure
+		if conditions.IsFalse(req.Object, v2.ReleasedCondition) && conditions.GetReason(req.Object, v2.ReleasedCondition) == v2.UpgradeFailedReason {
+			cur := req.Object.Status.History.Latest()
+			msg := fmt.Sprintf(fmtUpgradeSuccess, cur.FullReleaseName(), cur.VersionedChartName())
+			conditions.MarkTrue(req.Object, v2.ReleasedCondition, v2.UpgradeSucceededReason, "%s", msg)
+		}
+
 		return nil, nil
 	case ReleaseStatusLocked:
 		log.Info(msgWithReason("release locked", state.Reason))
diff --git a/internal/reconcile/atomic_release_test.go b/internal/reconcile/atomic_release_test.go
index 75eaf2a8f..6da82cec3 100644
--- a/internal/reconcile/atomic_release_test.go
+++ b/internal/reconcile/atomic_release_test.go
@@ -1532,6 +1532,26 @@ func TestAtomicRelease_actionForState(t *testing.T) {
 				*conditions.TrueCondition(v2.ReleasedCondition, v2.UpgradeSucceededReason, "upgrade succeeded"),
 			},
 		},
+		{
+			name: "in-sync release with stale ready condition",
+			status: func(releases []*helmrelease.Release) v2.HelmReleaseStatus {
+				return v2.HelmReleaseStatus{
+					History: v2.Snapshots{
+						{Version: 1},
+					},
+					Conditions: []metav1.Condition{
+						*conditions.FalseCondition(v2.ReleasedCondition, v2.UpgradeFailedReason, "upgrade failed"),
+						*conditions.FalseCondition(meta.ReadyCondition, v2.UpgradeFailedReason, "upgrade failed"),
+					},
+				}
+			},
+			state: ReleaseState{Status: ReleaseStatusInSync},
+			want:  nil,
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(v2.ReleasedCondition, v2.UpgradeSucceededReason, "upgrade succeeded"),
+				*conditions.FalseCondition(meta.ReadyCondition, v2.UpgradeFailedReason, "upgrade failed"),
+			},
+		},
 		{
 			name:  "locked release triggers unlock action",
 			state: ReleaseState{Status: ReleaseStatusLocked},