diff --git a/app/src/components/AppUpdatePrompt.tsx b/app/src/components/AppUpdatePrompt.tsx
index 87a945d87..b3d3c808c 100644
--- a/app/src/components/AppUpdatePrompt.tsx
+++ b/app/src/components/AppUpdatePrompt.tsx
@@ -13,7 +13,7 @@
  * Visual conventions mirror `LocalAIDownloadSnackbar` — bottom-right portal,
  * stone-900 panel, primary gradient progress bar.
  */
-import { useCallback, useState } from 'react';
+import { useCallback, useRef, useState } from 'react';
 import { createPortal } from 'react-dom';
 
 import { useAppUpdate } from '../hooks/useAppUpdate';
@@ -48,12 +48,14 @@ const AppUpdatePrompt = (props: AppUpdatePromptProps) => {
 
   const [dismissed, setDismissed] = useState(false);
   const [prevPhase, setPrevPhase] = useState(phase);
-  // Re-show on every transition INTO a visible phase, even if the user had
-  // dismissed a previous error/prompt earlier in the session.
+  const dismissedErrorRef = useRef<string | null>(null);
+  const currentErrorKey = error ?? 'Update failed. See logs for details.';
+  // Re-show on every transition INTO a visible non-error phase, or when a new
+  // error differs from the one the user already dismissed this session.
   if (phase !== prevPhase) {
     setPrevPhase(phase);
     if (shouldShow(phase) && !shouldShow(prevPhase)) {
-      setDismissed(false);
+      setDismissed(phase === 'error' && dismissedErrorRef.current === currentErrorKey);
     }
   }
 
@@ -66,15 +68,17 @@ const AppUpdatePrompt = (props: AppUpdatePromptProps) => {
   }, []);
 
   const handleRetryDownload = useCallback(() => {
+    dismissedErrorRef.current = null;
     setDismissed(false);
     reset();
     void download();
   }, [reset, download]);
 
   const handleDismissError = useCallback(() => {
+    dismissedErrorRef.current = currentErrorKey;
     reset();
     setDismissed(true);
-  }, [reset]);
+  }, [currentErrorKey, reset]);
 
   if (!shouldShow(phase) || dismissed) return null;
 
diff --git a/app/src/components/__tests__/AppUpdatePrompt.test.tsx b/app/src/components/__tests__/AppUpdatePrompt.test.tsx
index 23327adc4..848901cd6 100644
--- a/app/src/components/__tests__/AppUpdatePrompt.test.tsx
+++ b/app/src/components/__tests__/AppUpdatePrompt.test.tsx
@@ -8,7 +8,7 @@
  *     (`ready_to_install`)
  *   - error surface with retry path
  */
-import { fireEvent, screen, waitFor } from '@testing-library/react';
+import { act, fireEvent, screen, waitFor } from '@testing-library/react';
 import { beforeEach, describe, expect, it, vi } from 'vitest';
 
 import { renderWithProviders } from '../../test/test-utils';
@@ -225,6 +225,27 @@ describe('AppUpdatePrompt', () => {
     });
   });
 
+  it('does not re-open the same dismissed update error on the next background cycle', async () => {
+    renderWithProviders(
+      <AppUpdatePrompt autoCheck={false} initialCheckDelayMs={0} recheckIntervalMs={0} />
+    );
+    await waitFor(() => expect(statusListeners.length).toBeGreaterThan(0));
+
+    emitStatus('error');
+    await waitFor(() => expect(screen.getByText('Update failed')).toBeInTheDocument());
+
+    fireEvent.click(screen.getByRole('button', { name: /^Dismiss$/i }));
+    await waitFor(() => {
+      expect(screen.queryByText('Update failed')).not.toBeInTheDocument();
+    });
+
+    await act(async () => {
+      emitStatus('checking');
+      emitStatus('error');
+    });
+    expect(screen.queryByText('Update failed')).not.toBeInTheDocument();
+  });
+
   it('renders nothing when not in Tauri', async () => {
     mockIsTauri.mockReturnValue(false);