diff --git a/.changelog/16498.txt b/.changelog/16498.txt
new file mode 100644
index 000000000000..cdb045d67c9a
--- /dev/null
+++ b/.changelog/16498.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+proxycfg: fix a bug where terminating gateways were not cleaning up deleted service resolvers for their referenced services
+```
diff --git a/agent/proxycfg/state_test.go b/agent/proxycfg/state_test.go
index 894f2bd4795a..bdb2e3c07bc7 100644
--- a/agent/proxycfg/state_test.go
+++ b/agent/proxycfg/state_test.go
@@ -2093,6 +2093,28 @@ func TestState_WatchesAndUpdates(t *testing.T) {
 						require.Equal(t, dbResolver.Entry, snap.TerminatingGateway.ServiceResolvers[db])
 					},
 				},
+				{
+					requiredWatches: map[string]verifyWatchRequest{
+						"service-resolver:" + db.String(): genVerifyResolverWatch("db", "dc1", structs.ServiceResolver),
+					},
+					events: []UpdateEvent{
+						{
+							CorrelationID: "service-resolver:" + db.String(),
+							Result: &structs.ConfigEntryResponse{
+								Entry: nil,
+							},
+							Err: nil,
+						},
+					},
+					verifySnapshot: func(t testing.TB, snap *ConfigSnapshot) {
+						require.True(t, snap.Valid(), "gateway with service list is valid")
+						// Finally ensure we cleaned up the resolver
+						require.Equal(t, []structs.ServiceName{db}, snap.TerminatingGateway.ValidServices())
+
+						require.False(t, snap.TerminatingGateway.ServiceResolversSet[db])
+						require.Nil(t, snap.TerminatingGateway.ServiceResolvers[db])
+					},
+				},
 				{
 					events: []UpdateEvent{
 						{
diff --git a/agent/proxycfg/terminating_gateway.go b/agent/proxycfg/terminating_gateway.go
index cb371ae2bf02..483c79f91ddc 100644
--- a/agent/proxycfg/terminating_gateway.go
+++ b/agent/proxycfg/terminating_gateway.go
@@ -354,8 +354,13 @@ func (s *handlerTerminatingGateway) handleUpdate(ctx context.Context, u UpdateEv
 		// There should only ever be one entry for a service resolver within a namespace
 		if resolver, ok := resp.Entry.(*structs.ServiceResolverConfigEntry); ok {
 			snap.TerminatingGateway.ServiceResolvers[sn] = resolver
+			snap.TerminatingGateway.ServiceResolversSet[sn] = true
+		} else {
+			// we likely have a deleted service resolver, and our cast is a nil
+			// cast, so clear this out
+			delete(snap.TerminatingGateway.ServiceResolvers, sn)
+			snap.TerminatingGateway.ServiceResolversSet[sn] = false
 		}
-		snap.TerminatingGateway.ServiceResolversSet[sn] = true
 
 	case strings.HasPrefix(u.CorrelationID, serviceIntentionsIDPrefix):
 		resp, ok := u.Result.(structs.Intentions)
diff --git a/test/integration/connect/envoy/helpers.bash b/test/integration/connect/envoy/helpers.bash
index 12cbad8cbde3..bce47aeb052f 100755
--- a/test/integration/connect/envoy/helpers.bash
+++ b/test/integration/connect/envoy/helpers.bash
@@ -359,15 +359,37 @@ function assert_upstream_has_endpoints_in_status_once {
 
   GOT_COUNT=$(get_upstream_endpoint_in_status_count $HOSTPORT $CLUSTER_NAME $HEALTH_STATUS)
 
+  echo "GOT: $GOT_COUNT"
   [ "$GOT_COUNT" -eq $EXPECT_COUNT ]
 }
 
+function assert_upstream_missing_once {
+  local HOSTPORT=$1
+  local CLUSTER_NAME=$2
+  
+  run get_upstream_endpoint $HOSTPORT $CLUSTER_NAME
+  [ "$status" -eq 0 ]
+  echo "$output"
+  [ "" == "$output" ]
+}
+
+function assert_upstream_missing {
+  local HOSTPORT=$1
+  local CLUSTER_NAME=$2
+  run retry_long assert_upstream_missing_once $HOSTPORT $CLUSTER_NAME
+  echo "OUTPUT: $output $status"
+
+  [ "$status" -eq 0 ]
+}
+
 function assert_upstream_has_endpoints_in_status {
   local HOSTPORT=$1
   local CLUSTER_NAME=$2
   local HEALTH_STATUS=$3
   local EXPECT_COUNT=$4
   run retry_long assert_upstream_has_endpoints_in_status_once $HOSTPORT $CLUSTER_NAME $HEALTH_STATUS $EXPECT_COUNT
+  echo "$output"
+
   [ "$status" -eq 0 ]
 }