diff --git a/internal/services/applications/application_resource.go b/internal/services/applications/application_resource.go
index c1cc4d8ae7..da8dbfab2e 100644
--- a/internal/services/applications/application_resource.go
+++ b/internal/services/applications/application_resource.go
@@ -1241,6 +1241,7 @@ func applicationResourceCreate(ctx context.Context, d *pluginsdk.ResourceData, m
 
 	// Attempt to patch the newly created application and set the display name, which will tell us whether it exists yet, then set it back to the desired value.
 	// The SDK handles retries for us here in the event of 404, 429 or 5xx, then returns after giving up.
+	// Due to an unusual implementation on this service, the retry function also retries on 409. See https://github.com/hashicorp/terraform-provider-azuread/issues/1764#issuecomment-3282278691 for more information.
 	uid, err := uuid.GenerateUUID()
 	if err != nil {
 		return tf.ErrorDiagF(err, "Failed to generate a UUID")
diff --git a/internal/services/applications/applications.go b/internal/services/applications/applications.go
index 3ca1b95116..d80696199f 100644
--- a/internal/services/applications/applications.go
+++ b/internal/services/applications/applications.go
@@ -27,7 +27,8 @@ import (
 
 func applicationUpdateRetryFunc() client.RequestRetryFunc {
 	return func(resp *http.Response, o *odata.OData) (bool, error) {
-		if response.WasNotFound(resp) {
+		// inconsistent state on this resource can result in a 409 Conflict being returned, in this exception case we retry as per the service design, see  https://github.com/hashicorp/terraform-provider-azuread/issues/1764#issuecomment-3282278691 for more information.
+		if response.WasNotFound(resp) || response.WasConflict(resp) {
 			return true, nil
 		} else if response.WasBadRequest(resp) && o != nil && o.Error != nil {
 			return o.Error.Match("Permission (scope or role) cannot be deleted or updated unless disabled first"), nil