diff --git a/lib/ash_state_machine.ex b/lib/ash_state_machine.ex
index 49472d4..264db8f 100644
--- a/lib/ash_state_machine.ex
+++ b/lib/ash_state_machine.ex
@@ -137,20 +137,27 @@ defmodule AshStateMachine do
     end
   end
 
+  def transition_state(%{action_type: :create, action: %{upsert?: true}} = changeset, target) do
+    attribute = AshStateMachine.Info.state_machine_state_attribute!(changeset.resource)
+    old_state = Map.get(changeset.data, attribute)
+
+    cond do
+      target not in AshStateMachine.Info.state_machine_initial_states!(changeset.resource) ->
+        invalid_initial_state(changeset, target)
+
+      target not in available_upsert_targets(changeset) -> no_matching_transition(changeset, target, old_state)
+
+      true -> Ash.Changeset.force_change_attribute(changeset, attribute, target)
+    end
+  end
+
   def transition_state(%{action_type: :create} = changeset, target) do
     attribute = AshStateMachine.Info.state_machine_state_attribute!(changeset.resource)
 
     if target in AshStateMachine.Info.state_machine_initial_states!(changeset.resource) do
       Ash.Changeset.force_change_attribute(changeset, attribute, target)
     else
-      changeset
-      |> Ash.Changeset.set_context(%{state_machine: %{attempted_change: target}})
-      |> Ash.Changeset.add_error(
-        AshStateMachine.Errors.InvalidInitialState.exception(
-          target: target,
-          action: changeset.action.name
-        )
-      )
+      invalid_initial_state(changeset, target)
     end
   end
 
@@ -166,15 +173,7 @@ defmodule AshStateMachine do
     end)
     |> case do
       nil ->
-        changeset
-        |> Ash.Changeset.set_context(%{state_machine: %{attempted_change: target}})
-        |> Ash.Changeset.add_error(
-          AshStateMachine.Errors.NoMatchingTransition.exception(
-            old_state: old_state,
-            target: target,
-            action: changeset.action.name
-          )
-        )
+         no_matching_transition(changeset, target, old_state)
 
       _transition ->
         Ash.Changeset.force_change_attribute(changeset, attribute, target)
@@ -197,6 +196,11 @@ defmodule AshStateMachine do
       To remediate this, add the `extra_states` option and include the state #{inspect(target)}
     """)
 
+     no_matching_transition(changeset, target, old_state)
+  end
+
+  @doc false
+  defp no_matching_transition(changeset, target, old_state) do
     changeset
     |> Ash.Changeset.set_context(%{state_machine: %{attempted_change: target}})
     |> Ash.Changeset.add_error(
@@ -208,6 +212,17 @@ defmodule AshStateMachine do
     )
   end
 
+  defp invalid_initial_state(changeset, target) do
+    changeset
+    |> Ash.Changeset.set_context(%{state_machine: %{attempted_change: target}})
+    |> Ash.Changeset.add_error(
+      AshStateMachine.Errors.InvalidInitialState.exception(
+        target: target,
+        action: changeset.action.name
+      )
+    )
+  end
+
   @doc """
   A reusable helper which returns all possible next states for a record
   (regardless of action).
@@ -243,4 +258,11 @@ defmodule AshStateMachine do
     |> Enum.reject(&(&1 == :*))
     |> Enum.uniq()
   end
+
+  defp available_upsert_targets(changeset) do
+    AshStateMachine.Info.state_machine_transitions(changeset.resource, changeset.action.name)
+    |> Enum.map(& &1.to)
+    |> List.flatten()
+    |> Enum.uniq()
+  end
 end
diff --git a/lib/verifiers/verify_transition_actions.ex b/lib/verifiers/verify_transition_actions.ex
index 55a02f7..c4c9eac 100644
--- a/lib/verifiers/verify_transition_actions.ex
+++ b/lib/verifiers/verify_transition_actions.ex
@@ -11,17 +11,48 @@ defmodule AshStateMachine.Verifiers.VerifyTransitionActions do
     end)
     |> Enum.each(fn transition ->
       action = Ash.Resource.Info.action(dsl_state, transition.action)
+      all_states = dsl_state |> AshStateMachine.Info.state_machine_all_states()
 
-      unless action && action.type == :update do
-        raise Spark.Error.DslError,
-          module: Spark.Dsl.Verifier.get_persisted(dsl_state, :module),
-          path: [:state_machine, :transitions, :transition, transition.action],
-          message: """
-          Transition configured with action `:#{transition.action}` but no such update action is defined.
-          """
+      case validate(action, transition, all_states) do
+        :ok ->
+          :ok
+
+        {:error, err} ->
+          raise Spark.Error.DslError,
+            module: Spark.Dsl.Verifier.get_persisted(dsl_state, :module),
+            path: [:state_machine, :transitions, :transition, transition.action],
+            message: """
+            #{error_message(err, transition.action)}
+            """
       end
     end)
 
     :ok
   end
+
+  defp validate(nil, _, _), do: {:error, :no_such_action}
+  defp validate(%{type: :update}, _, _), do: :ok
+  defp validate(%{type: :create, upsert?: false}, _, _), do: {:error, :create_must_upsert}
+
+  defp validate(%{type: :create}, %{from: from}, all_states) do
+    case Enum.sort(from) == Enum.sort(all_states) do
+      true -> :ok
+      false -> {:error, :create_must_allow_from_all}
+    end
+  end
+
+  defp validate(_, _, _), do: {:error, :no_such_action}
+
+  defp error_message(err, action) do
+    case err do
+      :no_such_action ->
+        "Transition configured with action `:#{action}` but no such create or update action is defined. Actions must be of type update or create with `upsert?: true`"
+
+      :create_must_upsert ->
+        "Transition configured with non-upsert create action `:#{action}`. Create actions must be configured with `upsert? true` to allow state transitions."
+
+      :create_must_allow_from_all ->
+        "Transition configured with create action `:#{action}` must allow transitions from all states."
+    end
+  end
 end
diff --git a/mix.exs b/mix.exs
index 90f2069..5c5bc16 100644
--- a/mix.exs
+++ b/mix.exs
@@ -21,7 +21,8 @@ defmodule AshStateMachine.MixProject do
       docs: docs(),
       description: @description,
       source_url: "https://github.com/ash-project/ash_state_machine",
-      homepage_url: "https://github.com/ash-project/ash_state_machine"
+      homepage_url: "https://github.com/ash-project/ash_state_machine",
+      consolidate_protocols: Mix.env() != :test
     ]
   end
 
diff --git a/test/ash_state_machine_test.exs b/test/ash_state_machine_test.exs
index 117235e..a5bb553 100644
--- a/test/ash_state_machine_test.exs
+++ b/test/ash_state_machine_test.exs
@@ -44,6 +44,90 @@ defmodule AshStateMachineTest do
         assert Exception.message(reason) =~ ~r/no matching transition/i
       end
     end
+
+    test "create actions are allowed with `upsert? true`" do
+      state_machine = Verification.create!() |> Verification.begin!()
+      assert Verification.reset!(%{id: state_machine.id}).state == :pending
+    end
+
+    test "create upsert? actions do not allow invalid states" do
+      state_machine = Verification.create!() |> Verification.begin!()
+      assert {:error, reason} = Verification.broken_upsert(%{id: state_machine.id})
+      assert Exception.message(reason) =~ ~r/no matching transition/i
+    end
+
+    test "create actions without `upsert? true` do not compile" do
+      assert_raise Spark.Error.DslError, ~r/non-upsert create action/, fn ->
+        defmodule CreateWithoutUpsert do
+          use Ash.Resource,
+            domain: nil,
+            extensions: [AshStateMachine]
+
+          state_machine do
+            initial_states [:pending]
+
+            transitions do
+              transition :reset, from: :*, to: :pending
+            end
+          end
+
+          actions do
+            create :reset do
+              change transition_state(:pending)
+            end
+          end
+        end
+      end
+    end
+
+    test "create action transitions without `from: :*` do not compile" do
+      assert_raise Spark.Error.DslError, ~r/must allow transitions from all states/, fn ->
+        defmodule CreateWithoutAllowingFromAll do
+          use Ash.Resource,
+            domain: nil,
+            extensions: [AshStateMachine]
+
+          state_machine do
+            initial_states [:pending, :howdy]
+
+            transitions do
+              transition :reset, from: :howdy, to: :pending
+            end
+          end
+
+          actions do
+            create :reset do
+              upsert? true
+              change transition_state(:pending)
+            end
+          end
+        end
+      end
+    end
+
+    test "any action other than update or create with upsert? true does not compile" do
+      assert_raise Spark.Error.DslError, ~r/no such create or update action/, fn ->
+        defmodule DeleteAction do
+          use Ash.Resource,
+            domain: nil,
+            extensions: [AshStateMachine]
+
+          state_machine do
+            initial_states [:pending]
+
+            transitions do
+              transition :delete, from: :*, to: :pending
+            end
+          end
+
+          actions do
+            destroy :delete do
+              change transition_state(:pending)
+            end
+          end
+        end
+      end
+    end
   end
 
   describe "charts" do
diff --git a/test/support/domain.ex b/test/support/domain.ex
index f55946e..eb3693a 100644
--- a/test/support/domain.ex
+++ b/test/support/domain.ex
@@ -6,5 +6,6 @@ defmodule Domain do
     resource ThreeStates
     resource Order
     resource NextStateMachine
+    resource Verification
   end
 end
diff --git a/test/support/verification.ex b/test/support/verification.ex
new file mode 100644
index 0000000..0e175b4
--- /dev/null
+++ b/test/support/verification.ex
@@ -0,0 +1,48 @@
+defmodule Verification do
+  @moduledoc false
+  use Ash.Resource,
+    domain: Domain,
+    data_layer: Ash.DataLayer.Ets,
+    extensions: [AshStateMachine]
+
+  state_machine do
+    initial_states [:pending]
+    default_initial_state :pending
+
+    transitions do
+      transition(:begin, from: :pending, to: :executing)
+      transition(:reset, from: :*, to: :pending)
+      transition(:broken_upsert, from: :*, to: [:foo, :bar])
+    end
+  end
+
+  actions do
+    default_accept :*
+    defaults [:read, :create]
+
+    update :begin do
+      change transition_state(:executing)
+    end
+
+    create :reset do
+      upsert? true
+      change transition_state(:pending)
+    end
+
+    create :broken_upsert do
+      upsert? true
+      change transition_state(:pending)
+    end
+  end
+
+  attributes do
+    uuid_primary_key :id, writable?: true
+  end
+
+  code_interface do
+    define :create
+    define :begin
+    define :reset
+    define :broken_upsert
+  end
+end