diff --git a/.changelog/26424.txt b/.changelog/26424.txt
new file mode 100644
index 00000000000..702b2d114f0
--- /dev/null
+++ b/.changelog/26424.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+services: Fixed a bug where Nomad services were deleted if a node missed heartbeats and recovered before allocs were migrated
+```
diff --git a/nomad/node_endpoint_test.go b/nomad/node_endpoint_test.go
index 92ad8b6a623..51209395406 100644
--- a/nomad/node_endpoint_test.go
+++ b/nomad/node_endpoint_test.go
@@ -1524,62 +1524,6 @@ func TestClientEndpoint_UpdateStatus_HeartbeatOnly_Advertise(t *testing.T) {
 	require.Equal(resp.Servers[0].RPCAdvertiseAddr, advAddr)
 }
 
-func TestNode_UpdateStatus_ServiceRegistrations(t *testing.T) {
-	ci.Parallel(t)
-
-	testServer, serverCleanup := TestServer(t, nil)
-	defer serverCleanup()
-	testutil.WaitForLeader(t, testServer.RPC)
-	testutil.WaitForKeyring(t, testServer.RPC, testServer.config.Region)
-
-	// Create a node and upsert this into state.
-	node := mock.Node()
-	must.NoError(t, testServer.State().UpsertNode(structs.MsgTypeTestSetup, 10, node))
-
-	// Generate service registrations, ensuring the nodeID is set to the
-	// generated node from above.
-	services := mock.ServiceRegistrations()
-
-	for _, s := range services {
-		s.NodeID = node.ID
-	}
-
-	// Upsert the service registrations into state.
-	must.NoError(t, testServer.State().UpsertServiceRegistrations(structs.MsgTypeTestSetup, 20, services))
-
-	// Check the service registrations are in state as we expect, so we can
-	// have confidence in the rest of the test.
-	ws := memdb.NewWatchSet()
-	nodeRegs, err := testServer.State().GetServiceRegistrationsByNodeID(ws, node.ID)
-	must.NoError(t, err)
-	must.Len(t, 2, nodeRegs)
-	must.Eq(t, nodeRegs[0].NodeID, node.ID)
-	must.Eq(t, nodeRegs[1].NodeID, node.ID)
-
-	// Generate and trigger a node down status update. This mimics what happens
-	// when the node fails its heart-beating.
-	args := structs.NodeUpdateStatusRequest{
-		NodeID:       node.ID,
-		Status:       structs.NodeStatusDown,
-		WriteRequest: structs.WriteRequest{Region: "global", AuthToken: node.SecretID},
-	}
-
-	var reply structs.NodeUpdateResponse
-
-	nodeEndpoint := NewNodeEndpoint(testServer, nil)
-	must.NoError(t, nodeEndpoint.UpdateStatus(&args, &reply))
-
-	// Query our state, to ensure the node service registrations have been
-	// removed.
-	nodeRegs, err = testServer.State().GetServiceRegistrationsByNodeID(ws, node.ID)
-	must.NoError(t, err)
-	must.Len(t, 0, nodeRegs)
-
-	// Re-send the status update, to ensure we get no error if service
-	// registrations have already been removed
-	must.NoError(t, nodeEndpoint.UpdateStatus(&args, &reply))
-}
-
 func TestNode_UpdateStatus_Identity(t *testing.T) {
 	ci.Parallel(t)
 
diff --git a/nomad/state/state_store.go b/nomad/state/state_store.go
index e51d29a6871..1b3d158dd48 100644
--- a/nomad/state/state_store.go
+++ b/nomad/state/state_store.go
@@ -1163,11 +1163,6 @@ func (s *StateStore) updateNodeStatusTxn(txn *txn, req *structs.NodeUpdateStatus
 		return fmt.Errorf("index update failed: %v", err)
 	}
 
-	// Deregister any services on the node in the same transaction
-	if copyNode.Status == structs.NodeStatusDown {
-		s.deleteServiceRegistrationByNodeIDTxn(txn, txn.Index, copyNode.ID)
-	}
-
 	return nil
 }
 
@@ -4077,10 +4072,8 @@ func (s *StateStore) nestedUpdateAllocFromClient(txn *txn, index uint64, alloc *
 		return fmt.Errorf("setting job status failed: %v", err)
 	}
 
-	if copyAlloc.ClientTerminalStatus() {
-		if err := s.deleteServiceRegistrationByAllocIDTxn(txn, index, copyAlloc.ID); err != nil {
-			return err
-		}
+	if err := s.deregisterServicesForTerminalAllocs(txn, index, copyAlloc); err != nil {
+		return err
 	}
 
 	return nil
@@ -4296,6 +4289,10 @@ func (s *StateStore) upsertAllocsImpl(index uint64, allocs []*structs.Allocation
 			return err
 		}
 
+		if err := s.deregisterServicesForTerminalAllocs(txn, index, alloc); err != nil {
+			return err
+		}
+
 		if err := txn.Insert("allocs", alloc); err != nil {
 			return fmt.Errorf("alloc insert failed: %v", err)
 		}
diff --git a/nomad/state/state_store_service_registration.go b/nomad/state/state_store_service_registration.go
index 72390e42038..1b53eb84a6c 100644
--- a/nomad/state/state_store_service_registration.go
+++ b/nomad/state/state_store_service_registration.go
@@ -185,6 +185,20 @@ func (s *StateStore) deleteServiceRegistrationByAllocIDTxn(
 	return nil
 }
 
+// deregisterServicesForTerminalAllocs deletes service registration instances
+// for allocations that have been marked client-terminal. This allows us to
+// remove services for an alloc even if the client hooks fail or the node goes
+// down.
+func (s *StateStore) deregisterServicesForTerminalAllocs(
+	txn *txn, index uint64, alloc *structs.Allocation) error {
+
+	if !alloc.ClientTerminalStatus() {
+		return nil
+	}
+
+	return s.deleteServiceRegistrationByAllocIDTxn(txn, index, alloc.ID)
+}
+
 // GetServiceRegistrations returns an iterator that contains all service
 // registrations stored within state. This is primarily useful when performing
 // listings which use the namespace wildcard operator. The caller is
diff --git a/nomad/state/state_store_service_registration_test.go b/nomad/state/state_store_service_registration_test.go
index 36c3793435b..e495d660254 100644
--- a/nomad/state/state_store_service_registration_test.go
+++ b/nomad/state/state_store_service_registration_test.go
@@ -639,3 +639,69 @@ func TestStateStore_GetServiceRegistrationsByNodeID(t *testing.T) {
 	must.NoError(t, err)
 	must.Len(t, 1, serviceRegs)
 }
+
+func TestAlloc_ServiceRegistrationLifecycle(t *testing.T) {
+	ci.Parallel(t)
+	store := testStateStore(t)
+	index, _ := store.LatestIndex()
+
+	alloc0 := mock.Alloc()
+	alloc1 := mock.Alloc()
+
+	services := mock.ServiceRegistrations()
+	services[0].AllocID = alloc0.ID
+	services[1].AllocID = alloc1.ID
+
+	node := mock.Node()
+	node.ID = services[0].NodeID
+	alloc0.NodeID = node.ID
+
+	index++
+	must.NoError(t, store.UpsertNode(structs.MsgTypeTestSetup, index, node))
+
+	index++
+	must.NoError(t, store.UpsertAllocs(structs.MsgTypeTestSetup, index,
+		[]*structs.Allocation{alloc0, alloc1}))
+
+	index++
+	must.NoError(t, store.UpsertServiceRegistrations(
+		structs.MsgTypeTestSetup, index, services))
+
+	// node gets marked lost, but this doesn't delete services
+	node = node.Copy()
+	node.Status = structs.NodeStatusDown
+	services, err := store.GetServiceRegistrationsByNodeID(nil, node.ID)
+	must.NoError(t, err)
+	must.Len(t, 1, services)
+
+	// client marks alloc complete, so we clear the service
+	alloc0 = alloc0.Copy()
+	alloc0.ClientStatus = structs.AllocClientStatusComplete
+	index++
+	must.NoError(t, store.UpdateAllocsFromClient(structs.MsgTypeTestSetup, index,
+		[]*structs.Allocation{alloc0}))
+
+	iter, err := store.GetServiceRegistrationsByAllocID(nil, alloc0.ID)
+	must.NoError(t, err)
+	must.Nil(t, iter.Next())
+
+	// scheduler/plan marks alloc lost, so we clear the service
+	planAlloc := new(structs.Allocation)
+	*planAlloc = *alloc1
+	planAlloc.DesiredStatus = structs.AllocDesiredStatusStop
+	planAlloc.ClientStatus = structs.AllocClientStatusLost
+	diff := structs.AllocationDiff(*planAlloc)
+
+	index++
+	must.NoError(t, store.UpsertPlanResults(structs.MsgTypeTestSetup, index,
+		&structs.ApplyPlanResultsRequest{
+			AllocUpdateRequest: structs.AllocUpdateRequest{
+				AllocsStopped: []*structs.AllocationDiff{&diff},
+			},
+		}))
+
+	iter, err = store.GetServiceRegistrationsByAllocID(nil, alloc1.ID)
+	must.NoError(t, err)
+	must.Nil(t, iter.Next())
+
+}